OWNERSHIP COSTS
| Brokerage Fee | Brokerage fees include 3% of purchase price + ¥60,000 + consumption tax. | |||
| Acquisition Tax |
A one-time payment 2 to 3 months after title registration. It is taxed against the government’s assessment of the land and the building value. |
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| Registration & License Tax | Registration licenses are necessary in order for the purchaser to claim legal ownership of a property. Rates for registration license tax vary from 0.4% to 2% of assessment value of land and building, depending on how the transfer occurred. | |||
| Stamp Duty |
Stamp duty is levied on documents of contracts and agreements, payable at title registration.
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| Judicial Scrivener Fee | The role of Judicial Scriveners is to assist clients in property registration procedures. Fees for engaging Judicial Scriveners vary depending on property type, assessed value, and if registration of a mortgage is required. |
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Fixed Asset/ City Planning Tax |
Fixed asset tax and city planning tax are annual property taxes. The taxes are based on the government assessed value of the land and building. |
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Maintenance Fee/ Repair Cost/ Insurance |
These costs cover repairs and regular redecoration of the building that is payable to the building management. Fire, and earthquake insurance are optional. |
| Income Tax | Rental income is classified as real estate income. The tax rate is 5% to 10% of the taxable income ranging between ¥1,000 to ¥3,300,000. A 20% withholding tax is levied on rental income which can be credited against the final tax liability amount. |
| Property Management Fee | Services for tenant management include sourcing for tenants, rental collection, tenant liaison, and providing assistance for regular maintenance. |
| Brokerage Fee | Brokerage fees include 3% of purchase price + ¥60,000 + consumption tax. | |||
| Capital Gain Tax | For individuals, capital gains from the transfer of land and buildings are subjected to capital gain tax. For properties held for less than 5 years, capital gains tax is levied at 30%. Properties held for 5 years or more is levied at 15%. | |||
| Stamp Duty |
Stamp duty is levied on documents of contracts and agreements, payable at title registration.
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| Approximate buying and holding costs for a residential apartment unit in Tokyo | ||||||||||||||||||||
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| 1 This example assumes that the property is purchased in the beginning of the fiscal year. Certain fees are pro-rated to reflect the costs incurred by the buyer or seller on an annual basis. | ||||||||||||||||||||
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| 2 Acquisition costs for residential properties in Japan typically amount up to 4% to 6% of the purchase price of the property. | ||||||||||||||||||||
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| 3 Overall holding costs are around 10% to 20% of gross monthly rental. | ||||||||||||||||||||
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