JAPAN INVESTMENT PROPERTY GUIDE

Provident Investment has prepared a guide to provide investors with some useful information when considering to purchase property in Japan

JAPAN INCOME TAX RATE

When purchasing investment property in any country, understanding the tax implications is very important.
​If your net income is positive and you own a property in your personal name, submitting a tax return is necessary, the personal income is taxed based on the following tax rates:

Taxable Income (from)	Taxable Income (to)	Tax Rate
-	1,950,000	5%
1,950,000	3,300,000	10%
3,300,000	6,950,000	20%
6,950,000	9,000,000	23%
9,000,000	18,000,000	33%
18,000,000	40,000,000	40%
40,000,000	+	45%

The tax is calculated based on a sliding scale by calculating the income based on its corresponding tax rate.

​​For example, if your net income is 6,500,000, then the income tax is calculated as follows:

1,950,000 @ 5% tax rate = 97,500 (1,950,000 calculated as: 1,950,000 - 0)
1,350,000 @ 10% tax rate = 135,000 (1,350,000 calculated as: 3,300,000 - 1,950,000)
3,200,000 @ 20% tax rate = 640,000 (3,200,000 calculated as follows: 6,500,000 - 3,200,000)
Total tax due: 872,500 (calculated as follows: 97,500 + 135,000 + 640,000)

All above figures are expressed in Japanese Yen.
​
References: ​​https://www.nta.go.jp/taxes/shiraberu/taxanswer/shotoku/2260.htm
https://www.nta.go.jp/publication/pamph/koho/kurashi/html/01_1.htm​