What tax issues arise when a non-resident sells real estate in Japan?
Last verified: August 31, 2026
Answer
When a non-resident or foreign corporation sells Japanese land or a building, the buyer generally has to withhold 10.21% of the purchase price when paying the seller. An exception applies when the buyer is an individual purchasing the property for the residence of the buyer or a relative and the price is JPY 100 million or less.
Important distinction
The withholding is collected by the buyer from the payment. It is not necessarily the seller’s final tax liability. The seller may still need a Japanese tax filing depending on the circumstances.
Who is a non-resident?
For Japanese income-tax purposes, non-resident status is determined under tax-law residence rules, not simply by nationality.
What should be checked before closing?
- Seller tax-residence status
- Whether the statutory withholding exception applies
- Who will remit withholding tax and by what deadline
- Seller filing and tax-representative requirements
General information only. Confirm the facts of the individual transaction with a qualified tax professional.