Real Estate Investment Guide: Costs for Selling Property in Japan
2022-02-11
Real Estate Investment in Japan
There are several costs involved when selling real estate property in Japan. If you are not aware of these costs, you may be surprised when your earnings from the sale are less than what you expected.
To help avoid such occurrences, here we give you a list of the costs associated with selling property in Japan.
① Brokerage fee
When selling property in Japan, a real estate agency will look for a buyer. If a buyer is found and a sales transaction is concluded, you will need to pay a brokerage fee (or agent’s commission) to the real estate agency.
However, if a real estate agency is buying the property from you directly, then you do not need to pay any brokerage fee.
The brokerage fee is calculated based on the following table. For example, if the sale price of the property is 20,000,000 yen, then the real estate agency can charge a maximum brokerage fee of 726,000 yen (including tax).
| Property Sale Price | Brokerage Fee Upper Limit |
| First 2,000,000 yen | 5% of sale price + 10% tax |
| Amount between 2,000,000-4,000,000 yen | 4% of sale price + 10% tax |
| Amount over 4,000,000 yen | 3% of sale price+ 10% tax |
② Stamp duty
Stamp duty is a tax imposed on legal documents, such as a sales contract between a property seller and buyer. When you sell a property, you need to attach revenue stamps to the contract with an amount based on the sale price, as shown below.
| Property Sale Price | Stamp Duty Amount |
| 100,000 yen to not more than 500,000 yen | 200 yen |
| Over 500,000 yen, not more than 1 million yen | 500 yen |
| Over 1 million yen, not more than 5 million yen | 1,000 yen |
| Over 5 million yen, not more than 10 million yen | 5,000 yen |
| Over 10 million yen, not more than 50 million yen | 10,000 yen |
| Over 50 million yen, not more than 100 million yen | 30,000 yen |
| Over 100 million yen, not more than 500 million yen | 60,000 yen |
| Over 500 million yen, not more than 1 billion yen | 160,000 yen |
| Over 1 billion yen, not more than 5 billion yen | 320,000 yen |
| Over 5 billion yen | 480,000 yen |
③ Mortgage settlement registration fees
When you pay off a mortgage (a housing loan from a bank etc.), a registration of mortgage settlement needs to be filed by a judicial scrivener. The fee for this registration varies depending on the judicial scrivener, and usually ranges from 5,000 to 20,000 yen.
Note that if the full price of the property is paid in one lump sum, then there is no need for a registration of mortgage settlement, hence no judicial scrivener fees.
④ Housing loan early repayment charge
If you took out a housing loan to buy your property, and you are making an early repayment to pay off the mortgage, you will have to pay an early repayment charge.
The amount of the early repayment charge varies depending on the bank and the application method. If applying through a branch office, it typically costs around 20,000 to 35,000 yen. If applying through Internet banking, it will cost around 5,500 to 20,000 yen.
⑤ Capital gains tax
When you sell a property in Japan, you will incur a capital gains tax. The rate of the tax depends on whether you have owned the property for 5 years or less, or for more than 5 years.
| Period of Ownership | Capital Gains Tax Rate |
| Short-term capital gains (5 years or less) | 30% income tax + 0.63% special reconstruction tax + 9% inhabitant tax = total 39.63% |
| Long-term capital gains (more than 5 years) | 15% income tax + 0.315% special reconstruction tax + 5% inhabitant tax = total 20.315% |
As you can see, the tax rate can be nearly twice as much if you sell within 5 years of owning the property.
Note that there are deductions and special exceptions for the capital gains tax. Please inquire with us for more details.
Summary
In this article give, we explained the costs associated with selling property in Japan.
Some of the costs can be quite complicated to calculate, but it is a good idea to understand them to give you an accurate estimate of the income you can make from selling your property.
wagaya Japan is a multilingual real estate information website for foreigners that lets you search for properties in Japan. By having your property listed in our website, you can reach potential buyers from all over the world who are looking to purchase property in Japan.
wagaya Japan also has multilingual staff from other countries, allowing us to fully support property owners in their effort to sell property.
So if you are looking to sell property in Tokyo and the whole of Japan, wagaya Japan is a partner you can trust.
