Japan is one of the few developed nations that allows 100% foreign freehold ownership. There are zero restrictions on the purchase itself. The market is also supported by a weak yen and robust inbound tourism. On top of that, annual property taxes stay low, at roughly 1.7% combined (Fixed Asset + City Planning Tax in urban areas).
From April 2026, FEFTA reporting (Form 22) expands to all property acquisitions by non-residents, filed within 20 days. The prior residential-use exemption is removed. Separately, the FY2026 amendments make nationality disclosure mandatory on title registration applications for all buyers, both Japanese and foreign. This disclosed nationality is held internally by the government, not made public. As a result, foreign ownership rights remain unchanged.
Japan is one of the few developed nations that allows 100% foreign freehold ownership. There are zero restrictions on the purchase itself. Combine that with a weak yen, robust tourism, and limited new-build supply (the lowest level since 1973), and Japan offers a unique mix of stability and asymmetric upside.
Yes. Japan is, in fact, one of the most open property markets in the world. Foreigners can purchase any type of real estate: residential, commercial, or land. There is no residency requirement, no visa requirement, and no ownership restriction.
Because of this openness, the transaction can be completed entirely from overseas via a tax representative and judicial scrivener. From April 2026, FEFTA reporting (Form 22) within 20 days becomes mandatory. Even so, it does not affect the right to buy.
First, there is Registration & License Tax. This runs 1.5% on land (a reduced rate, extended via FY2026 tax reform; standard 2.0%), 0.4% on newly built buildings (ownership preservation), and 2.0% on resale buildings transferred by sale. The resale rate drops to 0.3% if qualifying as residential, through 31 Mar 2027.
In addition, Real Estate Acquisition Tax applies at 3% on residential land/buildings, a reduced rate through 31 Mar 2027 (standard rate is 4%). On top of that, Stamp Duty is tiered by contract value. For example, it runs ¥10,000 for ¥10M–¥50M contracts under reduced rates valid through 31 Mar 2027. Judicial scrivener fees typically run ¥100,000–¥250,000. Consumption Tax (JCT) also adds 10% on the building portion of new builds, though land itself stays exempt.
Once you own the property, Fixed Asset Tax (Kotei Shisanzei) applies at 1.4% of assessed value. This is reassessed every 3 years, with the next reassessment due in 2027. On top of this, City Planning Tax adds up to 0.3% of assessed value in urban areas. Together, the combined effective rate is roughly 1.7% in the 23 wards or Osaka City. Importantly, assessed value is typically only 50–70% of market value, which lowers the effective tax burden.
For non-residents, per NTA rules, tenants (or property managers acting as withholding agent) must withhold 20.42% on gross rent at source. There is, however, an important exception. Withholding does not apply when the tenant is an individual renting for personal residence of themselves or relatives.
That said, non-residents can still file an annual return, between Feb 16 and Mar 15, to deduct expenses. These include management, repair, depreciation, and mortgage interest. This lets them reclaim any overwithheld tax. To do so, a Japan-based tax representative (nōzei kanrinin) is required. For residents, by contrast, rental income is simply added to total taxable income. It is then taxed at progressive rates of 5–45% on net rental income after deductions.
Capital gains tax depends primarily on holding period. This is counted from January 1 of the year of sale, not the actual purchase date. For a short-term hold (≤5 years), the total rate is 39.63%: 30.63% national income tax incl. reconstruction surtax, plus 9% local inhabitant tax. For a long-term hold (>5 years), however, the rate drops to 20.315% total (15.315% national + 5% inhabitant). In other words, crossing the 5-year line roughly halves the tax rate.
At closing, the buyer withholds 10.21% of the sale price, not the gain itself, as a credit against final tax liability. Afterward, the seller files a tax return to compute the actual tax owed and claim any refund. For an owner-occupied primary residence, meanwhile, the first ¥30 million of capital gain may be exempt. Additionally, for homes held 10+ years, gains above ¥30M up to ¥60M may qualify for a reduced 14.21% rate. This stacks with the ¥30M deduction. Given these thresholds, it pays to plan exit timing carefully.
Yes, particularly in Tokyo, Osaka, and tourist-heavy cities such as Kyoto and Niseko. Indeed, Tokyo 23-ward asking rents grew 7.82% YoY in Q3 2025 (At Home / SMTRI apartment rent index). That marks the strongest pace in over three decades.
According to Savills Q3 2025 data, average 23W rents reached roughly JPY 4,547/m². The C5W (central five wards) commands a 21–22% premium on top of that. As a result, gross yields typically range 3.4–5% in Tokyo central wards and 4–6% in regional cities. Note, however, that short-term rental (Minpaku) requires local registration. It is also subject to a 180-night/year national operating cap, plus stricter ward-level limits in Tokyo and Kyoto.
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