Leaving Japan with a Rental Condo: What Changes for Tax

Published October 28, 2026

Written by: Licensed real estate broker in Japan, 10 years at a listed real estate company, now a salaried landlord

Run your own numbers

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Short answer

You can keep a Japanese rental condo after you move abroad. The rent stays taxable in Japan, but the tax refund from a rental loss stops.

Before you leave, appoint a tax agent, settle your resident tax, and tell your lender and management company.

What stops and what continues

Before and after you leave
	Living in Japan	After moving abroad
Rental loss	Offsets your salary, tax comes back	Cannot offset income abroad
Resident tax 10%	Yes	No (no address on January 1)
Deductions	Spouse, dependants, insurance, basic	Basic deduction only
Rent withholding	No	20.42% if a company pays the rent
Tax return	You file	Your tax agent files

Japan taxes non-residents only on Japanese-source income. The rent is Japanese-source, your new salary abroad is not, so the two can no longer be combined. Someone transferred abroad for a year or more is generally treated as a non-resident from the day after leaving.

Example: leaving after the first year

The condo from our other articles: ¥22,000,000, bought with a ¥21 million loan at 1.9% over 35 years, owner's salary ¥8 million. The first three years show a paper loss because the equipment is depreciated over three years.

Year 2: the same ¥1,207,803 loss

Still in Japan

¥258,216

cash flow after a ¥310,200 tax saving

Moved abroad

−¥51,984

cash flow, no tax saving

In year 1 the owner, still in Japan, saved ¥497,300 in income and resident tax. After moving, the year-2 and year-3 losses (¥1,207,803 and ¥1,196,800) save nothing. A resident would have saved ¥310,200 and ¥308,600. See tax refunds from a rental condo for how the saving is calculated.

From year 4, living abroad can cost less

Year 4: real estate income ¥121,183

Still in Japan

−¥99,265

cash flow after ¥36,800 of extra tax

Moved abroad

−¥62,465

cash flow, no Japanese tax

Once the equipment is fully depreciated the condo shows a small profit. A resident pays tax on it at the marginal rate on top of the salary. A non-resident has only this income in Japan, ¥121,183, which is below the ¥620,000 basic deduction, so no Japanese tax is due. If a company pays the rent and withholds 20.42%, that money comes back when your agent files the return.

Checklist before you leave

Appoint a tax agent (納税管理人) for national tax and submit the notification to the tax office. Without one you must file a return before you depart.
Settle resident tax. You owe the tax for last year's income if you had an address in Japan on January 1. Pay the rest before leaving or name an agent with the city.
Tell your lender. Some loan contracts require notice of a move abroad. A home loan generally does not allow renting the home out without the bank's consent.
Arrange management. Choose between a master lease and collection-only, and check whether rent will be withheld.
Set a contact for property tax bills from the city, and update your address with the building's owners' association.

Check your numbers

The condo simulator shows real estate income and cash flow by year. For the years after you leave, use the cash flow before tax and check whether the real estate income exceeds the basic deduction.

Details: the year you leave, your home, and other taxes

The year of departure

In the year you leave, income from the months before and after departure is reported on one return. With a tax agent appointed before leaving, the return is filed by March 15 of the following year. Without one, you file before you leave and again later through an agent for the rest of the year. The calculation is complex, so this is a good year to use a tax accountant.

If the condo was your own home

The home-loan tax credit requires you to live in the home. It stops for the years it is rented out.
Once rented, the home becomes a rental: rent, expenses and depreciation are reported as real estate income.
If you sell it within the allowed period after moving out, the home-sale deduction may still apply. After that, it is taxed as an investment property.

Exit tax

Japan's exit tax applies to financial assets such as shares worth ¥100 million or more. Real estate is not included.

Coming back

When you return and become a resident again, notify the tax office that the tax agent is dismissed. From then on the rent is combined with your salary again.

Frequently asked questions

Q. Should I sell before leaving?

A. Not necessarily. Selling within five years (counted on January 1) is taxed at the short-term rate, and as a non-resident the buyer will usually withhold 10.21% of the price. Compare both.

Q. Can a friend be my tax agent?

A. Yes. A tax agent can be any individual or company in Japan, such as a relative, a friend, your management company or a tax accountant.

Q. Does my new country tax the rent?

A. It may. Most treaties let Japan tax rent from Japanese property, and your country of residence usually gives a credit for the Japanese tax.

Q. Are past refunds taken back?

A. No. Refunds for the years you lived in Japan stay valid. The change only affects future years.

Sources