In the last two blogs, I wrote about real property-related taxes when purchasing and earning rent in Japan. This time, I will explain taxes when selling real estate in Japan.

1. Income Taxes

– For Company

Not only selling profit or loss but also total based profit, including rent revenue and costs, all company’s profit is taxed by around 30%. It includes local tax and business tax. Selling profit or loss is calculated by deducting the purchasing amount after depreciation from the sale amount and related costs. The duration of depreciation is mainly 15 years to 35 years.

– For Individual Business

In this case, the tax of the gain from selling property is separated from other income like salary. Selling gain and loss is calculated simillar to companies. The tax rate is around 20% when holding duration is over five years, whild the case under five years is around 40%. It includes rocal tax.

2. Consumption Tax

Transaction of land is not taxed and building is basically taxed by 10%. However, if your buldings are used on only residential use, this rent is not taxed, so selling deal might be not taxed.