Selling Japanese Property as a Non-Resident: 10.21% Withholding

Published October 28, 2026

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

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Short answer

When a non-resident sells Japanese property, the buyer usually withholds 10.21% of the price, not of the gain.

The actual tax on the gain is lower (15.315% or 30.63%, with no resident tax), and the difference comes back when you file a return.

Two different taxes at closing

Sale price ¥19,800,000
buyer is an investor or company
Buyer withholds 10.21%
¥2,021,580
Tax on the gain
calculated on your return
Difference refunded
after filing

The withholding is a prepayment, set as a share of the whole price so the tax office collects something before the seller leaves the picture. Your real tax is on the gain: sale price minus cost basis and selling costs. You settle the two on a tax return by March 15 of the following year.

Does the buyer withhold 10.21%?
Buyer	Withholding
Company, including buyback companies	Yes
Individual investor	Yes
Individual buying a home to live in, price ¥100 million or less	No

Most buyers of one-room investment condos are investors or companies, so expect the withholding.

Rates for non-residents

Short term, resident

39.63%

Short term, non-resident

30.63%

Long term, resident

20.315%

Long term, non-resident

15.315%

Income tax 15% or 30% plus the 2.1% reconstruction surtax. Residents also pay resident tax of 5% or 9%.

Long term means more than five years of ownership as of January 1 of the year of sale. The gain is taxed separately from other income at a flat rate. Resident tax applies only if you have an address in Japan on January 1 of the year after the sale, so a non-resident pays income tax only.

Example: the ¥22 million condo, sold after 10 years

The condo from our other articles, bought for ¥22,000,000 with a ¥21 million loan while living in Japan, is sold in year 10 for ¥19,800,000 after the owner has moved abroad.

Sale in year 10 (long term)
Item	Amount
Taxable gain (after depreciation and brokerage)	¥3,720,199
Tax at 15.315% (non-resident)	¥569,748
Withheld by the buyer (10.21% of price)	¥2,021,580
Refund after filing	¥1,451,832
Cash at closing after loan repayment and withholding	¥712,479

As a resident the same sale would cost ¥755,758 at 20.315%. As a non-resident the tax is ¥569,748, but ¥2,021,580 is held back at closing, so most of the money arrives only after the tax return is processed. Why there is a gain at all when the price fell is explained in capital gains tax on Japanese property.

Selling early with a loan can leave you short

Same unit, sold in year 5 (short term)

Cash at closing

−¥1,724,602

loan payoff + brokerage + withholding

Refund after filing

¥1,292,464

tax ¥729,116 on a ¥2,380,399 gain

In year 5 the loan balance is still high. After repaying the loan and the brokerage fee only ¥296,978 would remain, and the buyer withholds ¥2,021,580. You would need about ¥1.7 million of your own money to close, and wait months for the refund. Check the loan balance before agreeing a price.

Plan the exit

In the condo simulator, add an "Assumed sale (exit)" event on the 35-year tab to see the gain and the cash left after the loan. Then apply the non-resident rate and the 10.21% withholding.

Details: tax agent, documents, and timing

Filing the return

The sale is reported on a final return for the year of sale, filed by March 15 of the following year through your tax agent (納税管理人). The 10.21% withheld is credited and the excess refunded. Without a return, the withholding is not refunded.

Documents you need

The purchase contract and invoices for purchase costs (to prove the cost basis).
Your depreciation records from past returns.
The sale contract, brokerage invoice and stamp duty.
Proof of the amount the buyer withheld (ask the buyer or the broker for a copy of the payment).

Without the purchase contract, the cost basis may be set at 5% of the sale price, which makes the gain much larger.

Other points

The buyer pays the withholding to the tax office by the 10th of the following month.
Your country of residence may also tax the gain and give a credit for the Japanese tax.
If you move back to Japan before January 1 of the following year, resident tax applies to the gain.

Frequently asked questions

Q. Can I avoid the withholding?

A. Only if the buyer is an individual buying a home to live in, for ¥100 million or less. Otherwise the buyer is legally required to withhold.

Q. What if I sell at a loss?

A. There is no tax on the sale, and the full 10.21% withheld is refunded when you file.

Q. Does the 5-year rule change for non-residents?

A. No. Short or long term is judged on January 1 of the year of sale, the same as for residents.

Q. Is the ¥30 million home-sale deduction available?

A. It applies only to the sale of your own home, within certain periods after moving out. A rental condo does not qualify.

Sources