What Taxes are Payable when I Buy a Property from Hokkaido Real Estate?

Date Added: 30/01/2013

What Taxes are Payable when I Buy a Property from Hokkaido Real Estate?

There are a number of taxes that are levied when a real estate transaction takes place in Japan and of course, Niseko is no different. There are four separate taxes which are involved: Fixed Asset Tax, Stamp duty, Contract Stamp Duty, and Acquisition Tax. Apart from Contract Stamp Duty, which is based on the contracted price, the taxes are based on the local council evaluation of the property which is generally a lower figure than the market price. If you have bought near to the Niseko resort it will either be Kutchan Town or Niseko Town that levies the tax. The various taxes are assessed in the following ways:

Name of Tax

What is it? When is it levied?

Amounts

Fixed Asset Tax

This is a straight tax on the property that is owned whether it is just land or it has a property built on it. It is levied annually retrospectively and is sent to whoever the registered owner is on 1st January of the year. Depending on when the settlement takes place, the fixed asset tax is shared on a pro-rata basis between buyer and seller.

1.4% of local council evaluation

Stamp Duty

A tax which applies to real estate transactions. It is a one-off charge and the rates are slightly different for land and built property.

2% of built property

1.5% of land

Both are applied to the local council valuation.

Contract Stamp Duty

A tax which is shown by placing actual revenue stamps on the contract documents. It is based on the contract price. The most common amounts are shown here.

Over ¥10,000,000

¥15,000

Over ¥50,000,000

¥45,000

Over ¥100,000,000

¥80,000

Acquisition Tax

This tax is not levied at the time of settlement. A bill will come from the tax department, usually around 3 months after the sale of the property has been completed.

3.5% of total local council valuation

Note: The above is intended as a guide. We are a real estate company and have no formal expertise in tax affairs. We always refer our clients to qualified tax agents if so required.



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