Purchase tax will be charged in real estate purchasing in Japan
When you purchase a real estate in Japan, you have to pay a “purchase tax = acquisition tax = 不動産取得税”.
In order to calculate amount of this tax, I have to get “certificate of valuation of fixed asset issued from Japanese government.
Now, I will hold up an apartment in Tokyo as example.
This apartment is built in 2000, room area is 70.2 square meters, RC.
Let’s assume, tax value of certain room is $ 53,329.
This assessed value differs depending on rooms.
Especially when room area becomes wider, the assessed value will be higher.
And when the room is older, the assessed value( = tax value ) is cheaper.
After completion of building, the tax value decrease gradually.
This apartment has registered right of site.
When you purchase this apartment, you can obtain property right on site.
Though, it is share to lot.
Let’s assume assessed value of lot will be around 219,330,140 yen ≒ $ 2,193,301
This lot is owned by all owners of this building.
So, when I calculate the tax amount for one owner, calculation formula is as below.
$ 2,193,301 × percentage of seller’s ownership on a lot.
And I calculate this numbers, assessed value of this owner will be $ 138,500 .
Tax rate of purchase tax is 3% in the case of residential property.
If the building is a commercial property, tax rate is 4%.
And there is a Tax reduction measures ( 減税措置 )
As for the land, half of assessed value is taxable value.
The calculation formula for purchase tax is as below.
House : $ 53,329 × 3% = $ 1599.87
Lot : $ 138,500 × 0.5 × 3% = $ 2077.5
Thus, $ 1599.87 + $ 2077.5 = $ 3677.37
Tax reduction in purchase tax
As for purchase tax, there is another Tax reduction measures.
First as for the house.
Amount of purchase tax = (assessed value – deductible amount ) × 3%
Deductible amount differs depending on the date of completion or built.
This is in the case of Tokyo prefecture.
Deductible amount differs on prefecture.
Date of built Deductible amount
after April 1st, 1997 $ 120,000
April 1st, 1989~March 31th,1997 $ 100,000
July 1st, 1985~March 31th,1989 $ 45,000
January 1st,1982 ~ June 30th,1985 $ 42,000
（in this page, 1 $ = 100 yen ）
This deduction is applicable for buyer’s residence.
So, when the apartment is an office, warehouse, this deduction is not applicable.
When someone buys the house to rent out, this deduction is not applicable.
The room area written on the certificate of assessed value should be within 50 ~ 240 square meters .
In the case of apartment made of concrete, it should be built within 25 years.
In the case of house made of wood, it should be built within 20 years.
So, in the case of this room, this deduction is applicable.
($ 53,329 – $ 120,000 ) × 3% is below zero
The buyer does not need to pay purchase tax as for the house.
Purchase tax for land
Next, I will explain about the purchase tax on a Lot.
When you buy this apartment, you can obtain property right (所有権) on the lot.
Buyer can obtain share (持分) of property right on a lot.
Amount of purchase tax on lot = (assessed value × 0.5 × 3%) – deductible amount (whichever is higher in あ and い))
あ = $ 450
い = ( assessed value per 1 ㎡ × 0.5 ) × (room area written on certificate of assessed value ( maximum figure is 200 ㎡) × 2 ) ×3%
So, in the case of this property,
USD2,193,301 ( Assessed value ) / 1003.72 ㎡ ) × 0.5 × ( 70.2 square meters × 2 ) × 3%
= $ 4,601
So, い is higher and 4,601 $ is applicable.
$ 2077.5 – $ 4,601 is below zero
So, buyer does not need to pay purchase tax as for a lot.
appraised valued of real estate in Japan