What Taxes Do You Pay When Selling a House in Japan? Transfer Taxes and the ¥30 Million Deduction
A detailed guide to real estate transfer taxes in Japan, including the difference between short-term and long-term ownership, the ¥30 million deduction, and the latest home-selling brokerage fees.
Aug 7, 2026·✍️ olablog·⏱ 13 min read
A detailed guide to real estate transfer taxes in Japan, including the difference between short-term and long-term ownership, the ¥30 million deduction, and the latest home-selling brokerage fees.
Selling a house or condominium in Japan is a major financial decision for many Vietnamese families living and working in Japan or considering returning to Vietnam. However, many people are caught off guard when the amount they actually receive after the transaction is less than expected because they have not accounted for all the applicable taxes and incidental costs. If you make a profit on the sale, how much tax will you have to pay? How can you avoid being charged the wrong income tax? This article from the OlaChill team answers all your questions in the most specific, practical, and easy-to-understand way possible, with information accurately updated according to legal regulations as of 8/2026.
What Is Japan’s Real Estate Transfer Income Tax?
When you sell a house or land in Japan, if the transaction generates a profit, you must pay transfer income tax — called 譲渡所得税 (joto shotokuzei) in Japanese. This is not a fixed tax on the total sale price of the property. It applies only to the net profit (譲渡所得 - joto shotoku).
The formula for calculating taxable profit, as prescribed by Japan’s National Tax Agency (国税庁 - Kokuzeicho), is as follows:
$$\text{Taxable profit} = \text{Sale price} - (\text{Acquisition costs} + \text{Selling costs}) - \text{Special deduction}$$
Where:
- Sale price (譲渡収入金額 - joto shunyu kingaku): The total amount received from selling the property, including any adjustment for fixed asset tax.
- Acquisition costs (取得費 - shutokuhi): The original purchase price of the house plus related purchase costs (registration and license tax, title-transfer fees), minus depreciation expenses (減価償却費 - genka shokyakuhi) for the building portion over its useful life.
- Selling costs (譲渡費用 - joto hiyou): Brokerage fees, land-surveying fees, fees for canceling an existing contract, and demolition costs for an old house, if applicable.
- Special deduction (特別控除 - tokubetsu kojo): Deductions and exemptions provided under government policy, such as the ¥30 million deduction for a primary residence.
If the result is 0 or negative after applying the formula—that is, if you sell at a loss—you will not have to pay transfer income tax.
Short-Term vs. Long-Term Tax: The Important 5-Year Threshold
The key point that anyone selling a house in Japan must understand is the length of time the property has been owned. Japan divides profits from property sales into two categories, with tax rates that differ by nearly double:
- Short-term ownership (短期譲渡所得 - tanki joto shotoku): Ownership for 5 years or less.
- Long-term ownership (長期譲渡所得 - choki joto shotoku): Ownership for more than 5 years.
Comparison of Transfer Tax Rates (As of 8/2026)
| Ownership type | National income tax (所得税) | Local inhabitant tax (住民税) | Special reconstruction income tax (復興特別所得税) | Total applicable tax rate |
|---|---|---|---|---|
| Short-term (≤ 5 years) | 30.0% | 9.0% | 0.63% (2.1% of income tax) | 39.63% |
| Long-term (> 5 years) | 15.0% | 5.0% | 0.315% (2.1% of income tax) | 20.315% |
(Note: The special reconstruction income tax 復興特別所得税 - fukko tokubetsu shotokuzei continues to apply under current regulations.)
The 5-Year Calculation Is Extremely Easy to Misunderstand!
Many Vietnamese people mistakenly assume that buying a house on 1/4/2021 and selling it on 2/4/2026—exactly 5 years and 1 day later—qualifies for the long-term tax rate. In reality, that is not how it works!
Japanese tax law determines the 5-year threshold based on the ownership period as of January 1 of the year in which the house is sold.
- Example: You buy a house on 15/5/2021 and sell it on 10/10/2026.
- As of 1/1/2026, your ownership period runs only from 15/5/2021 to 1/1/2026, which is less than 5 years.
- Therefore, the transaction is still classified as short-term ownership and is subject to the 39.63% tax rate.
- To qualify for the long-term rate of 20.315%, you must wait until 1/1/2027 or later to sell the house.
¥30 Million Special Deduction (3000万円特別控除) for an Owner-Occupied Home
This is the largest and most practical tax benefit offered by the Japanese government to people selling their primary residence (マイホーム - mai homu). The official name of this policy is the Special Deduction for Residential Property (居住用財産の3000万円特別控除 - kyujuyo zaisan no sansei manen tokubetsu kojo).
Benefit Details
Whether you have owned the home for less than 5 years or more than 5 years, you may deduct up to 30,000,000 JPY (~5.1 billion VND) from your taxable profit.
- If your profit from selling the house is 10,000,000 JPY (~1.7 billion VND): After deducting ¥30 million, your taxable profit is 0 JPY $\rightarrow$ You will not have to pay a single yen in transfer tax.
- If your profit is 35,000,000 JPY (
5.9 billion VND): You only need to pay tax on the remaining 5,000,000 JPY (850 million VND).
Conditions for the ¥30 Million Deduction (Updated 2026)
To claim this benefit, you must meet all of the following conditions set by the Tax Office:
- The house must be your actual residence: You or your family must have lived there. If you have already moved elsewhere, the sale contract must be signed by December 31 of the 3rd year after the year in which you moved out.
- You must not sell to a specially related person: The buyer must not be your spouse, parent, child, or a company that you own or control.
- You must not have used the benefit within the past 3 years: In the year of the sale and the 2 preceding years, you must not have claimed this ¥30 million deduction or other housing exchange benefits.
- You must file a tax return (確定申告 - kakutei shinkoku): Even if the tax payable is 0 JPY after deducting ¥30 million, you are still required to submit a tax return and supporting documents in order for the tax exemption to be approved!
Important Warning Regarding the Home Loan Deduction (住宅ローン控除 - jutaku ron kojo): If you sell an old house using the ¥30 million deduction and immediately purchase a new home with a bank loan, you will NOT be able to use the home loan tax deduction (住宅ローン控除) for the new home for 3 years (the year of sale, the 2 preceding years, and the 2 following years). Carefully consider which option will provide the greater financial benefit before making your decision!
Brokerage Fees and Other Transaction Costs
In addition to taxes, you need to budget for transaction-related expenses. The largest cost is usually the commission paid to the real estate company.
1. Real Estate Brokerage Fee (仲介手数料 - chukai tesuryo)
Under Japan’s Real Estate Transaction Business Act (宅地建物取引業法), the maximum brokerage fee is calculated using the standard progressive formula:
- For the portion above 4,000,000 JPY: (Sale price × 3% + 60,000 JPY) + 10% consumption tax (消費税 - shohizei).
Updated regulation: For low-value properties priced at 8,000,000 JPY or less—especially older homes and properties in suburban areas—a brokerage company may negotiate a flat fee of up to 330,000 JPY (including 10% tax) with the seller to cover surveying and other related costs.
2. Mortgage Registration Cancellation Costs (抵当権抹消登記 - teitoken massho toki)
If the house still has an outstanding bank loan, you must release the mortgage and cancel its registration when selling.
- Registration and license tax (登録免許税 - toroku menkyozei): 1,000 JPY / 1 property (land and building are counted separately, for a total of 2,000 JPY).
- Judicial scrivener’s fee (司法書士報酬 - shihoshoshi hoshu): Approximately 15,000 JPY – 30,000 JPY (~2.5 – 5 million VND) for a judicial scrivener to handle the procedure.
Estimated Costs When Selling a 30,000,000 JPY Condominium (~5.1 billion VND)
| Cost item | Japanese (Romaji) | Estimated fee (JPY) | Approximate equivalent (~VND) |
|---|---|---|---|
| Maximum brokerage fee | 仲介手数料 (chukai tesuryo) | 1,056,000 JPY | ~179,000,000 VND |
| Mortgage registration cancellation | 抵当権抹消登記 (teitoken massho toki) | 20,000 JPY | ~3,400,000 VND |
| Document copies and certificates | 登記事項証明書 (toki jiko shomeisho) | 3,000 JPY | ~500,000 VND |
| Stamp duty | 印紙税 (inshizei) | 10,000 JPY | ~1,700,000 VND |
| Estimated total costs | — | ~1,089,000 JPY | ~184,600,000 VND |
Important Notes for Non-Residents (非居住者) Selling Property
Many Vietnamese people have completed their work contracts and returned to Vietnam but continue to own property in Japan, selling it later. In this situation, you are considered a non-resident (非居住者 - hikyujusha) for tax purposes.
1. 10.21% Withholding at Source (源泉徴収 - gensen choshu)
When a non-resident sells a house in Japan, the buyer—or the purchasing company—is legally required to withhold 10.21% (consisting of 10% income tax + 0.21% reconstruction tax) from the total sale price and pay it directly to Japan’s tax authorities before transferring the remaining amount (89.79%) to you.
- Exception: EXEMPTION from the 10.21% withholding: The buyer is an individual purchasing the house for residential use (for themselves or a family member), and the transaction value does not exceed 100,000,000 JPY (~17 billion VND).
2. You Must Appoint a Tax Agent (納税管理人 - nozei kanri nin)
Because you no longer live in Japan, you must register an individual or tax consulting firm residing in Japan as your tax agent (納税管理人 - nozei kanri nin). This person will receive tax correspondence on your behalf and file 確定申告 (kakutei shinkoku) in February - March of the following year to request a refund of any excess 10.21% tax withheld (if your actual profit is lower or you qualify for an exemption or deduction).
Tax Filing Process and Required Documents for Vietnamese Sellers
If you sell a house at a profit—or sell your primary residence and wish to claim the ¥30 million deduction—you must file a tax return during the 確定申告 (kakutei shinkoku) period, which runs from 16/2 to 15/3 of the following year.
Required documents include:
- Income tax return (確定申告書 - kakutei shinkokusho): The form for property transfers.
- Detailed statement of transfer income (譲渡所得の内訳書 - joto shotoku no uchiwake sho): Details of the sale price, original purchase price, and brokerage fees.
- Purchase and sale contracts (売買契約書 - baibai keiyakusho): Copies of the contract from when you originally purchased the house and the current sale contract.
- Certificate of registered property information (登記事項証明書 - toki jiko shomeisho): Obtained from the Legal Affairs Bureau (法務局 - Homukyoku).
- Certificate of residence (住民票 - juminhyo): Proof that you previously lived at the address if claiming the ¥30 million deduction.
Frequently Asked Questions
Q. Do I have to pay tax if I sell my house at a loss (the sale price is lower than the total purchase costs + selling costs)? No. If you sell at a loss, your transfer profit is 0, so you do not have to pay 譲渡所得税 (joto shotokuzei). In addition, if it is your primary residence, you may be able to use the loss-offset mechanism (損益通算 - soneki tsusan) to request a refund of part of the income tax you paid on your salary that year.
Q. I am a Vietnamese trainee/engineer. If I return to Vietnam after owning a house for 2 years and sell it, can I claim the ¥30 million deduction? Yes. Whether you are a foreign national or have owned the house for only a short period (2 years), as long as the house is registered in your name and you actually registered your residence there with a 住民票 (juminhyo), you are fully eligible to claim the ¥30 million deduction (3000万円特別控除) when selling.
Q. Is there any difference in taxation between selling a condominium (Mansion) and selling a detached house (Ikkodate)? In principle, the tax rates and ¥30 million deduction are exactly the same. The only difference is in calculating the original acquisition cost (取得費 - shutokuhi): for a condominium, the allocation of value between the Land (which is not depreciated) and the Building (which is depreciated over time) differs from that of a detached house.
Q. When do I have to pay this transfer tax? National income tax (所得税) is paid during the tax-filing period (16/2 - 15/3 of the following year). Local inhabitant tax (住民税) will be sent to your home by the local government in the form of a tax payment notice (納付書 - nofucho) around June of the following year.
Summary and Further Reading
Selling a house in Japan is not overly complicated if you understand the tax rules: distinguish the 5-year ownership threshold to avoid the high 39.63% tax rate, make full use of the ¥30 million deduction for owner-occupied homes, and prepare all the necessary documents for your 確定申告 tax filing. Calculating brokerage fees and taxes in advance will help you retain as much of your savings as possible.
For more useful information about life, finances, and administrative procedures in Japan, you can explore these related articles:
- Learn more about managing expenses and handling administrative procedures at Blog OlaChill.
- Find general information about the lives of Vietnamese people in Japan on the OlaChill homepage.
- If you would like to treat your family to a relaxing trip after completing your property sale or purchase, explore these attractive itineraries at Day Tours from Tokyo.
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