Letting Cost
You have to pay Income Tax on rental income generated by letting Japanese properties. Operating costs, loan interest and building depreciation can be deducted in calculating net taxable income. Rental income is subject to a Withholding Tax of 20.4% before it can be sent out of Japan to your home country unless you are leasing your property to a family member. Management Fees are typically around 5% of a property’s rental price. Letting Fees are equivalent to the price of one or two months’ rent. For a fee, some letting and management agents offer guaranteed rental schemes, which guarantee a rental income for five years.
Taxable Income |
Income Tax Rate |
Deductibles |
¥1,000 - ¥1,950,000 |
5.1% |
N.A. |
¥1,951,000 - ¥3,300,000 |
10.2% |
¥97,500 |
¥3,301,000 - ¥6,950,000 |
20.4% |
¥427,500 |
¥6,951,000 - ¥9,000,000 |
23.5% |
¥636,000 |
¥9,001,000 - ¥18,000,000 |
33.7% |
¥1,536,000 |
¥18,001,000 - ¥40,000,000 |
40.8% |
¥2,796,000 |
More than ¥40,001,000 |
45.9% |
¥4,796,000 |