Japan – Selling Property

What steps are involved in selling property yourself in Japan?

Whether you engage an agent or manage the process independently, selling real estate in Japan follows a defined sequence of administrative and legal stages. While the law does not prohibit private sales, several steps — particularly the mandatory disclosure requirements — apply regardless of how the transaction is arranged.

1. Obtain a property valuation. Before placing your property on the market, you will need a realistic assessment of its value. Japanese property valuations follow broadly standardised methodologies, though the valuation figure does not guarantee you will achieve that amount at sale. Online comparison platforms allow you to request assessments from multiple agencies simultaneously, which can help you calibrate your asking price.
2. Gather required documents. Having your paperwork in order before you begin marketing will help avoid delays later. The key documents include the Property Registration Certificate (登記事項証明書), which confirms ownership and records details of the land, building, and any registered encumbrances such as mortgages — obtained from the Legal Affairs Bureau (法務局 – Hōmukyoku) — and the Fixed Asset Tax Notice (固定資産税納税通知書), which sets out tax assessments and payment history.
3. List the property. You can advertise through Japanese real estate portals such as SUUMO, Homes.co.jp, and AtHome, or target potential foreign buyers through social media channels and expatriate communities. An agent will typically list on multiple platforms simultaneously, including the industry database REINS.
4. Prepare the Explanation of Important Matters (重要事項説明書). This is a comprehensive legal disclosure document — commonly running from 20 to 100 pages — that gives buyers a detailed account of the property, covering its condition, legal status, applicable public law obligations, and any known issues. Japanese law requires this document to be delivered to the buyer and explained verbally before the buyer enters into a purchase agreement. This obligation exists regardless of whether an agent is involved.
5. Negotiate and accept an offer. As offers arrive, assess them not only on price but on the buyer’s financial position — whether they are purchasing with cash or subject to mortgage approval — and on any conditions they attach, such as completion timelines or requests for renovation work.
6. Sign the Sales Agreement (売買契約書). This legally binding contract sets out all the agreed terms and conditions of the sale. At the point of signing, the buyer typically pays an earnest money deposit (手付金), formalising both parties’ commitment to completing the transaction.
7. Register the ownership transfer. The legal transfer of title must be recorded at the Legal Affairs Bureau (法務局). This involves submitting the Certificate of Ownership and the sale contract, a process ordinarily handled by a judicial scrivener. Registration provides the buyer with formal legal protection and can take several weeks to complete.
8. Complete settlement. At the final settlement stage, you will receive the outstanding balance of the purchase price, sign off on the property transfer, hand over the keys, and ensure any mortgage secured against the property is discharged. All remaining documentation should be confirmed before this meeting takes place.

If you are a non-resident without access to a Japanese residence record or seal registration, a sworn address affidavit notarised by your home country’s authorities or embassy can substitute for a residence certificate, and a signature certificate from your country’s embassy replaces the seal registration certificate.

All contracts and transaction documents in Japan are prepared in Japanese. Foreign sellers who are not proficient in the language should engage a bilingual agent or professional translator to ensure they fully understand what they are signing.

Do most sellers in Japan use an estate agent, or is private selling common?

Using a licensed real estate agent is not a legal requirement when selling property in Japan, but the overwhelming majority of sellers — Japanese and foreign alike — do engage one. Fully private sales are considerably rarer in Japan than in markets such as France or Australia, where owner-listed sales have established infrastructure and broader cultural acceptance.

When representing a seller, a real estate company will list the property on its own website and various property portals, produce marketing materials such as leaflets and video tours, and carry out promotional activities to attract prospective buyers. Beyond marketing, the agent manages property viewings, researches the property’s background, and coordinates the negotiation of contract terms — tasks that collectively require substantial local knowledge and language proficiency.

Sellers choosing to work with an agent have three types of agency agreement available: a general agency agreement, an exclusive agency agreement, or a restricted exclusive agency agreement. Under an exclusive agreement, the agent is legally obliged to register the property on REINS (Real Estate Information Network System), Japan’s industry-wide listing database, ensuring the property receives national exposure to other registered agents and their clients.

A licensed agent will manage the full process — marketing, negotiations, and paperwork — and typically charges a commission of around 3% of the sale price plus ¥60,000. This is the preferred route for sellers who want a more hands-off experience or who are not based in Japan. Selling privately removes the commission cost, but requires you to handle all documentation, negotiations, and the legally required Explanation of Important Matters yourself.

For those selling independently, some specialist and mainstream platforms are available: Old Houses Japan caters to akiya (vacant or traditional properties), while SUUMO, Homes.co.jp, and AtHome serve the broader market. Expat community forums and social media can also help reach international buyers. That said, the complexity of Japanese property law and the language demands of the paperwork mean most foreign sellers find professional assistance well worth the cost.

How does capital gains tax work when selling property in Japan?

Any profit realised from selling real estate in Japan — the capital gain — is subject to both national income tax and local inhabitant tax. The applicable rates are determined by how long you owned the property and how it was used. Crucially, Japan taxes property gains entirely separately from ordinary income at fixed rates, rather than simply adding the gain to your regular taxable income as some other countries do.

Property held for more than five years as of 1 January of the year in which the sale is made qualifies as a long-term capital gain and is taxed at a flat combined rate of 20.315% (comprising 15.315% national tax and 5% local inhabitant tax). Property held for five years or less generates a short-term capital gain taxed at a combined flat rate of 39.63% (30.63% national tax and 9% local inhabitant tax). These rates are current as of 2025 — always verify the latest figures with the National Tax Agency of Japan (NTA).

The five-year threshold is measured as of 1 January of the year of sale. This creates a potentially dramatic difference in tax exposure depending on the precise timing of your transaction: selling on 31 December versus waiting until 1 January of the next year could mean the difference between short-term and long-term rates — a planning consideration worth taking seriously if you are approaching that threshold.

The taxable gain is calculated by deducting both the original acquisition costs and the costs of the sale from the sale price. Acquisition costs include the purchase price paid plus brokerage fees, registration expenses, revenue stamp fees, and real estate acquisition tax paid at the time of purchase.

A special deduction of up to ¥30 million is available against capital gains arising from the sale of your primary residence, regardless of whether the gain is short-term or long-term in character. If the gain does not exceed ¥30 million, no capital gains tax will be owed. To qualify, you must have lived in the property as your main home for a qualifying period, the sale must take place within three years of vacating the property, the sale must not be to a relative or close associate, and you must not have used this exemption within the preceding two years. It cannot be applied to secondary homes or investment properties.

For primary residences held for more than ten years, a further reduced rate may apply to any remaining taxable gain after the ¥30 million deduction has been used. In such cases, up to ¥60 million of gain may be taxed at just 14.21%, with any amount above that threshold taxed at the standard long-term rate of 20.315%.

For non-resident sellers, the structure differs in one significant respect. Non-residents pay 30.63% on short-term gains and 15.315% on long-term gains — lower than the resident rates because local inhabitant tax (9% for short-term, 5% for long-term) is not levied on non-residents. However, the buyer is legally required to withhold 10.21% of the total sale price and remit it to the tax office on the seller’s behalf. This withholding is not the final tax settlement — it is a provisional payment. If your actual capital gain is smaller than the withheld amount implies, you can file a tax return to reclaim the excess.

Capital gains on property sales are reported as part of the annual tax return, which is filed between 16 February and 15 March of the year following the sale. Before proceeding, confirm all current rates and exemption conditions with the NTA or a qualified tax accountant.

What other taxes and costs should sellers expect in Japan?

Total transaction costs for selling real estate in Japan typically fall in the range of 3% to 7% of the sale price, depending on agent fees, tax exposure, and other variable items. The table below sets out the main costs a seller should plan for.

The legally prescribed ceiling on agent commissions for properties sold above ¥4 million is 3% of the sale price plus ¥60,000 plus 10% consumption tax. For properties priced between ¥2 million and ¥4 million, the ceiling is 4% of the sale price plus ¥20,000 plus consumption tax. For properties below ¥2 million, it is 5% of the sale price plus consumption tax. In practice, commission is usually paid in two instalments: half when the contract is signed and the remainder at the point of settlement and key handover.

Stamp duty is levied on legally binding documents such as the sales contract. The amount ranges from ¥200 to ¥600,000, scaled according to the contract value. Current stamp duty thresholds can be verified with the NTA.

Judicial scrivener fees are not regulated and vary from practitioner to practitioner. Since scriveners are required to handle the ownership transfer registration with the Legal Affairs Bureau, their involvement is effectively unavoidable. Always request a written fee estimate before engaging a scrivener.

If the property was purchased with a housing loan that has not yet been fully repaid, you will need to discharge the mortgage on or before completion. If you repay early through a branch, the associated charge is typically between ¥20,000 and ¥35,000; repayment through internet banking generally costs ¥5,500 to ¥20,000.

When calculating your capital gain, you are entitled to deduct legitimate selling costs — including agent commission, stamp duty, and other transaction expenses — from the sale proceeds. Renovation or maintenance work carried out specifically to facilitate the sale may also qualify as a deductible cost. Keeping comprehensive records of all acquisition and sale-related expenditure is therefore financially worthwhile.

What legal obligations must sellers fulfil in Japan?

Selling property in Japan carries a set of legal obligations that every seller must understand and comply with. The starting point is that you must hold clear legal title to the property and be entitled to sell it, with ownership records that are current and free of unresolved disputes. A Certificate of Registration (登記簿謄本) — confirming your ownership and setting out any encumbrances such as mortgages or liens — must be provided as part of the transaction.

The most distinctive legal obligation in Japan is the preparation of the Explanation of Important Matters. This is the central disclosure document in any Japanese property sale: a legally required, comprehensive account of everything a prospective buyer would need to know to make an informed decision, including the property’s condition, history, legal restrictions, known defects, past renovations, and risks such as susceptibility to earthquake damage. Its mandatory nature — and the requirement that it be explained verbally to the buyer before contract signing — places a significantly greater pre-sale disclosure burden on sellers than is common in many other markets.

A building inspection report, which confirms the structural soundness and overall condition of the property, is not a legal requirement but is widely regarded as helpful for attracting buyers and moving the sale forward more quickly. It is carried out by a licensed home inspector. In contrast to countries such as France or Belgium, where energy performance certificates must be obtained before a property can be marketed, Japan does not currently impose a mandatory energy certificate requirement as a condition of sale, though industry practice in this area is gradually changing.

All outstanding property taxes must be settled before the sale can be completed. Evidence that taxes are up to date — typically obtained from the local tax authority or municipal office — will be required as part of the transaction.

For foreign nationals selling in Japan: while the process broadly mirrors that for Japanese sellers, there are additional practical requirements. If you are unable to attend the closing in person, you will need to execute a power of attorney authorising a representative — typically a judicial scrivener or bilingual solicitor — to act on your behalf. If the power of attorney is executed outside Japan, it must be notarised and accompanied by a certified translation. Non-resident sellers are also required to appoint a domestic tax agent (納税管理人) to manage their Japanese tax filing obligations in their absence.

How does the exchange and completion process work in Japan?

Japan’s property transaction process follows a two-stage structure broadly comparable to the exchange-and-completion model used in many other countries, but with some important distinctions in the professionals involved and the mechanics of fund transfer.

The Sales Agreement (売買契約書) is the binding contract between buyer and seller that formalises the agreed terms and conditions of the sale. It marks the point of legal commitment for both parties. At the time of signing, the buyer pays an earnest money deposit — typically around 10% of the agreed purchase price — locking in the transaction. This is functionally similar to the exchange deposit used in markets such as the United Kingdom or Australia, though the specific percentage may vary depending on the circumstances.

The final settlement is conducted at a bank or legal office, where the buyer pays the remaining balance and the transfer of ownership is formalised. A judicial scrivener typically manages the registration of the title transfer with the Legal Affairs Bureau. This professional role has no direct equivalent in countries such as France or Spain, where notaries hold central responsibility for authenticating and finalising property sales. In Japan, the shiho shoshi (judicial scrivener) focuses on registration rather than notarial authentication; separate legal advice on the contract itself may be obtained from a lawyer if desired.

The registration of the title transfer at the Legal Affairs Bureau (法務局) — requiring submission of the Certificate of Ownership and the sale contract — is the step that gives the buyer formal legal protection over the property. Because this process can take several weeks, it is important to factor this into your planning timeline.

From initial listing through to completion, sellers should expect the full process to take between three and six months. Japan’s property market has seasonal patterns, with activity typically peaking in spring and autumn. Listing your property in February through April, ahead of the Japanese school year and financial year start, often results in a higher volume of interested buyers and can shorten the time to sale.

Is property exchange or part-exchange possible in Japan?

Direct property exchange — swapping one property for another rather than selling for cash — is legally recognised in Japan but remains a distinctly uncommon route compared with conventional open-market sales.

In certain qualifying circumstances, such as a recognised reinvestment or direct property swap, the capital gains tax that would normally fall due on the transfer may be deferred rather than payable immediately. This rollover relief mechanism means that a direct exchange can, in principle, defer capital gains liability rather than crystallising it — a feature that may appeal to property investors managing a portfolio across multiple assets.

Japan’s Real Estate Transactions Law includes specific reporting requirements for brokers operating under exclusive or restricted exclusive representation agreements with parties seeking to exchange a property, reflecting the fact that exchanges are recognised as a distinct transaction type. These obligations apply specifically where the broker’s mandate covers a potential exchange rather than an outright sale.

In practice, residential property exchanges are rare in Japan. Most sellers who wish to move to another property will complete an ordinary sale first and then purchase their next home through a separate transaction. Part-exchange arrangements offered by property developers — where a builder accepts an existing home as partial consideration for a new-build purchase — do exist but are not standardised across the industry and vary considerably by developer. Foreign sellers considering either type of exchange transaction should take specialist legal and tax advice, as the conditions for rollover relief are detailed and the market for willing exchange counterparties is limited.

What do foreign sellers need to know about transferring sale proceeds out of Japan?

Japan does not operate blanket currency controls that prevent foreign sellers from transferring property sale proceeds overseas, but there are reporting obligations, tax requirements, and practical considerations to work through before initiating an international transfer.

Where the seller is a non-resident, Japanese law requires the buyer to withhold 10.21% of the total sale price and pay this directly to the tax office on the seller’s behalf. This is a provisional withholding, not the seller’s final tax liability. The seller is required to file a final tax return — typically between 16 February and 15 March of the following year — at which point the withheld amount is applied against the actual capital gains tax due. If the withholding exceeds the final liability, the excess is refunded; if it falls short, the difference must be paid. This mechanism ensures that tax obligations are secured even where the seller departs Japan before filing their return.

Japan has concluded double taxation agreements (DTAs) with a significant number of countries, and these treaties may reduce or eliminate the risk of the same gain being taxed twice — once in Japan and again in your country of tax residence. Whether a particular DTA applies and to what extent depends on your individual residency status and the specific terms of the treaty in force. The current list of Japan’s tax treaties is published on the NTA website; consulting a cross-border tax specialist before completing your sale is strongly advisable.

For the physical transfer of funds, Japan’s Foreign Exchange and Foreign Trade Act (外為法) requires that large international transactions be reported to the Bank of Japan. Where payment to a non-resident is denominated in foreign currency, the withholding tax calculation is performed using a Japanese yen conversion. Once your tax obligations have been settled or adequately secured, the proceeds can be transferred abroad through a Japanese bank or a licensed currency transfer service. Given that exchange rate movements can have a material effect on the value of the proceeds when converted into another currency, it is worth consulting a specialist currency provider about rate-fixing options — particularly for larger sums.

Throughout this process, your most important professional contacts are a qualified tax accountant (税理士) with cross-border experience and a licensed judicial scrivener (shiho shoshi). For official guidance, refer to the National Tax Agency of Japan and the Ministry of Justice.

Frequently asked questions about selling property in Japan

How long does it typically take to sell a property in Japan from listing to completion?

The full process from listing to completion generally takes between three and six months. The actual duration will depend on the property’s location, asking price, condition, and the time of year. Japan’s property market tends to be most active in spring and autumn, and properties in central Tokyo typically sell more quickly than rural or akiya properties.

Can I sell my property in Japan without physically being in the country?

Yes — non-resident owners can sell Japanese property without travelling to Japan, but the process involves additional complexity and documentation. If you are unable to attend the closing in person, you must execute a notarised power of attorney — with a certified translation if issued outside Japan — authorising an agent, judicial scrivener, or lawyer to represent you throughout the transaction.

What happens if the buyer pulls out of the sale after signing the contract?

Once the Sales Agreement is signed and the deposit paid, a buyer who withdraws will ordinarily forfeit their deposit to the seller. If it is the seller who pulls out after contract exchange, they are typically required to repay double the deposit amount to the buyer. These penalty deposit provisions are standard practice in Japanese real estate transactions and act as a strong financial disincentive for either party to back out.

Do I need to pay Japanese capital gains tax if I no longer live in Japan?

Yes. Non-residents are subject to the same capital gains tax regime, but tax is collected via the buyer’s withholding obligation rather than by direct payment from the seller. You will need to file a final tax return with the NTA to settle the actual liability, which may result in a refund if the withholding exceeded your true tax exposure. You should also check whether a double taxation agreement between Japan and your country of residence reduces the combined tax burden.

Is there a Japanese equivalent of the UK’s EPC or France’s mandatory pre-sale surveys?

Japan does not currently require an energy performance certificate as a legal precondition of sale, unlike France or Germany. A building inspection report is encouraged — it can facilitate the sale and reassure buyers — but is not legally mandated. The Explanation of Important Matters document, however, must legally disclose all known defects and material risks, giving buyers a comparable level of pre-purchase information through a disclosure-based rather than certificate-based mechanism.

Can I sell a property I inherited in Japan as a foreign national?

Yes. Foreign nationals can both inherit and subsequently sell property in Japan. Before the sale can proceed, you will need to register the inherited title at the Legal Affairs Bureau. Both the inheritance and the eventual sale carry their own tax implications: you may be liable for Japanese inheritance tax if the estate meets the applicable threshold, and capital gains tax will apply to the sale. For CGT purposes, the acquisition cost is generally taken as the property’s value at the time of inheritance. A tax accountant experienced in cross-border estate matters is essential in this situation.

Are there any restrictions on which properties foreign nationals can sell?

There are no general restrictions preventing foreign nationals from selling property they legally own in Japan. The process is substantially the same as for Japanese sellers, with the additional documentation, language, and tax requirements that apply to non-residents as outlined above. Note that properties located near military facilities or nationally sensitive infrastructure may be subject to recent legislative changes concerning foreign ownership — if your property falls into this category, check the current position with a licensed agent or lawyer.

What official sources should I consult when selling property in Japan?

The primary official sources are: the National Tax Agency of Japan (NTA) for capital gains tax, withholding obligations, and filing requirements; the Ministry of Justice for property registration and Legal Affairs Bureau matters; and the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) for real estate transaction rules and licensed agent verification. For cross-border tax considerations, also consult your home country’s tax authority regarding your obligations there.