“Japanese Real Estate Looks Promising—but What Are the Real Costs?”

This is one of the most frequently asked questions among affluent Thai investors.

In this article, we provide a clear and comprehensive breakdown of all the financial considerations involved in purchasing property in Japan—from initial acquisition costs to annual ownership expenses—specifically tailored for Thai buyers.

◆ Upfront Costs: What You’ll Pay at the Time of Purchase

When purchasing real estate in Japan, there are several expenses beyond the property price itself:

1. Brokerage Fee

This is the standard commission paid to the real estate agency.

• Typical Rate: 3% of the purchase price + ¥60,000 (plus consumption tax)

• Example: For a property priced at ¥100 million, the brokerage fee would be approximately ¥3.96 million (tax included)

2. Registration-Related Fees (Including Judicial Scrivener Services)

This includes legal procedures such as the property title transfer registration.

• Estimated Cost: ¥200,000 to ¥300,000

3. Property Acquisition Tax

This is a one-time tax levied after the purchase of real estate in Japan.

• Estimated Rate: Approximately 3%–4% of the assessed property value

• Note: Tax relief may apply depending on property type and use

4. Stamp Duty

This is a government tax applied via revenue stamp affixed to the purchase agreement.

• Estimated Range: ¥10,000 to ¥60,000

• The amount varies based on the price of the property

5. Monthly Maintenance & Reserve Fund Fees (For Condominium Units)

These payments commence from the month following the date of property acquisition.

• Estimated Range: ¥10,000 to ¥50,000 per month

◆ Ongoing Ownership Costs: Annual Holding Expenses

1. Fixed Asset Tax + City Planning Tax

These are Japan’s two primary real estate taxes, levied annually on all property owners.

• Fixed Asset Tax: 1.4%

• City Planning Tax: up to 0.3%

• Combined Maximum: Approximately 1.7% of the government-assessed value

Note: Japan’s assessed value is generally lower than the market price, so the effective tax burden typically equates to just 0.6%–0.8% of the property’s fair market value.

2. Monthly Maintenance & Reserve Fund Contributions (For Condominium Units)

For condominium properties, these fees cover the upkeep of common areas and shared facilities.

• Typical Combined Range: ¥20,000 to ¥50,000 per month

3. Rental Income Tax (If Generating Income)

If the property is rented out, taxes apply only on net rental income—the amount remaining after allowable expenses are deducted from gross rental income.

• Progressive Tax Rate: 15% to a maximum of 45%

• Non-residents are subject to:
  ・20.42% withholding tax on gross rental income
  ・Annual tax filing required for reconciliation and reporting

◆ Capital Gains Tax Upon Sale of Japanese Real Estate

The sale of Japanese property is subject to capital gains taxation, applied if a profit is realized.

• Short-Term Holdings (owned 5 years or less): approximately 39%

• Long-Term Holdings (owned more than 5 years): approximately 20%

Note: The taxable gain is calculated after deducting expenses such as acquisition costs, depreciation, and brokerage fees.

◆ Compared to Thailand: Japan Offers Greater Predictability and Transparency

Japanese real estate transactions are defined by their legal clarity and procedural integrity:

✅ Taxes and transaction costs are clearly stipulated under national law
✅ Specialists handle brokerage, legal registration, and property management in a professional, segmented structure
✅ Comprehensive support is available for foreign buyers, including translation and step-by-step guidance

As a result, buyers benefit from the ability to accurately estimate total ownership costs upfront—providing a rare level of confidence and transparency in international property investment.

◆ Summary: Beyond Price: Why Total Cost of Ownership Is the True Benchmark in Real Estate Investment　

When building wealth through real estate, the focus should go beyond just the purchase price. What truly matters is the total cost of ownership, including:

• Acquisition expenses

• Ongoing maintenance and taxes

• Taxation policies

• Exit strategy costs

Japan stands out for its transparent, well-regulated cost structure—a major advantage in a global context.

For Thai high-net-worth individuals, this makes Japan an exceptionally attractive choice: a property market where long-term ownership can be approached with clarity, confidence, and peace of mind.