How is capital gains tax calculated when selling Japanese real estate?
Last verified: August 31, 2026
Answer
For land and buildings, Japan separates long-term and short-term capital gains according to the ownership period as of January 1 of the year of sale. For a sale during 2026, property acquired on or before December 31, 2020 is generally long-term; property acquired on or after January 1, 2021 is generally short-term.
Standard rates
- Long-term: income tax 15% plus resident tax 5%.
- Short-term: income tax 30% plus resident tax 9%.
Special Reconstruction Income Tax is also imposed on the relevant income-tax amount. Special rules and deductions can change the result, including rules for a principal residence.
Taxable gain
The calculation generally starts from sale proceeds minus acquisition cost and transfer expenses, then applicable special deductions. Building acquisition cost is adjusted for depreciation.
General information only. Confirm the current rules and individual facts with a qualified tax professional before a transaction.