Is there a special tax exemption for foreigners buying real estate or land in Japan that Japanese citizens do not receive? No, that's not true: There is a real estate transfer tax, a tax on fixed assets, and a town planning tax. These taxes are levied on all real estate buyers in Japan, regardless of whether they are Japanese or foreigners.
The claim appeared in a TikTok video (archived here) published on December 26, 2023. Translated from Japanese into English by Lead Stories staff, the video states:
Did you know that foreigners do not have to pay taxes when buying land in Japan? In places like Ginza, most foreigners own land. Apparently, there is no tax. That's sneaky. Why do only Japanese people pay taxes? ... Recently, Chinese people have been buying a lot of land in Niseko, but they don't have to pay taxes on it.
This is what the post looked like on TikTok at the time of writing:
(Source: TikTok screenshot taken on Mon Jan 15 12:28:20 2024 UTC)
The National Tax Agency (archived here) states on its web pages that foreigners and those living outside of Japan are responsible for paying real estate taxes. Translated from Japanese into English by Lead Stories staff, it explains in detail:
Transfer of real estate (archived here):
If a non-resident transfers real estate in Japan, the tax treaty states that the income derived from the transfer will be taxed in Japan, so the tax will be levied according to the provisions of domestic law.
Real estate rental fee (archived here):
If you pay rent for a property in Japan to a non-resident, etc., the tax treaty states that the rent received from the non-resident, etc., may be taxed in Japan, so the national laws apply. Taxes must be paid in accordance with the regulations.
Also, the International Response Manual for Real Estate Business Operators (archived here), published in 2017 by the Ministry of Land, Infrastructure, Transport and Tourism, explains the following, on page 15, about the town planning tax and the tax on fixed assets, as translated by Lead Stories staff:
Regarding fixed asset tax (including town planning tax if it is levied; the same shall apply hereinafter) ... Fixed asset tax is levied regardless of the residence status of the owner. Foreigners residing overseas must also pay the tax.
