Basic tax rules for purchasing real estate when the husband is not a Japanese citizen
Is it possible for a foreign national to purchase real estate in Japan?
In Japan, foreign nationals are not legally restricted from purchasing real estate. They can acquire ownership of real estate in the same manner as Japanese nationals.
What taxes will be incurred?
The main taxes that arise when a foreigner purchases real estate in Japan are as follows.
Taxes
- Stamp Duty
A tax is imposed on the sales contract and the amount of tax is based on the contract amount. - Real Estate Acquisition Tax
This is a one-time local tax that occurs when real estate is purchased. This is calculated based on the assessed value of the property tax and may be subject to reductions. - Registration Tax
The tax is imposed on the transfer of ownership and preservation registration and is determined according to the tax base. - Consumption Tax
The land is exempt from taxation, but consumption tax is charged on the building portion.
Gift tax risk when a foreigner purchases real estate in Japan
In Japan, the recipient pays gift tax.
In Japan, gift tax is paid by the donee (in this case, the wife). This may be relatively common in Japan. However, in some countries, the donor may pay. If you purchase real estate in Japan, the couple may be both residents of Japan due to the procedures.
In that case, you may be taxed on the gift to your wife.
In a calendar year, if the amount exceeds ¥1,100,000,000, a progressive tax will be imposed on that portion.
This is the general case, not for immediate family members. It is used for gifts between siblings, gifts between husband and wife, and gifts from parents to their children when the children are minors.
| taxable price | General tax rate | Simple Calculation Deduction |
|---|---|---|
| Less than 2 million yen | 10% | – |
| Less than 3 million yen | 15% | 100,000 yen |
| Less than 4 million yen | 20% | 250,000 yen |
| Less than 6 million yen | 30% | 650,000 yen |
| 10 million yen or less | 40% | 1,250,000 yen |
| Less than 15 million yen | 45% | 1.75 million yen |
| Less than 30 million yen | 50% | 2.5 million yen |
| Over 30 million yen | 55% | 4 million yen |
If you find out later, you must also pay late taxes.
Failure to file gift taxes properly may result in delinquent taxes. Therefore, it is recommended that the procedure be completed as soon as possible.
It is like a signal disregard that is recorded. Deficiencies in the handling of gifts often cause problems later on, and the tax office will have a record of them and point them out to you.
Summary
A foreign husband can purchase real estate in Japan. However, one should be aware of the risk of taxation, especially gift tax, during and after the purchase. We recommend you consult with a specialist to confirm the latest information.
