Property owners in Osaka must pay real estate-related taxes when they buy real estate in Osaka. As part of our series about taxes in Japan, we will explain the taxes involved with buying, owning, and selling real estate in Osaka, with special focus on Osaka property taxes.
Real Estate Taxes in Osaka
The taxes you pay for real estate in Osaka include:
- Stamp Taxes (paid at closing)
- Real Estate Registration Tax (paid at closing)
- Consumption Tax for Real Estate (paid at closing)
- Real Estate Acquisition Tax (paid a few months after the purchase)
- Property Taxes: Fixed Asset Tax + City Planning Tax (paid every year)
- Income Tax for Property in Osaka (if any, paid annually)
- Sales Tax on Real Estate (when the property is sold)
While this article is primarily focused on the annual, recurring property taxes in Osaka, we’ll review the taxes related to buying and selling for your reference.
Taxes When You Buy Real Estate in Osaka
The taxes paid at the time you buy Osaka property include the stamp taxes, the property registration tax, and other taxes based on either the “assessed value” or the “selling value” of the property.
The two largest taxes when you buy property in Osaka are the consumption tax (which is paid to the Japanese national government) and the real estate acquisition tax (which is paid, locally to the Osaka government).
The consumption tax is basically a sales tax, and is 10% of the sales price of the property. The real estate acquisition tax comes later (a few months after the sale), and is ~4% of the assessed value of the property, or less, depending on the type of real estate.
Property Taxes in Osaka
What are commonly called “property taxes” in other locations are called fixed asset taxes in Japan.
Each year the city will issue the property owner in Osaka a property tax bill; the amount you pay each year depends on the assessed worth of the land and/or the building. In addition to fixed asset taxes, a “city planning tax” is also included in the annual tax bill. The city planning tax for property in Osaka is generally a much lower amount, and is included with the fixed asset tax; both taxes are paid together. The city planning tax is a city tax, and is also based on the assessed value of property.
For more detail, see our guide to property taxes in Japan.
How Much Are the Property Taxes in Osaka?
The fixed asset tax in Osaka city is 1.4% of the assessed property price. Osaka city’s city planning tax is 0.3% of the assessed property price.
The “assessed price” is not the same (and is usually much lower) than the purchase price. Property value assessments are calculated by the local government, and take place every three years.
How to Pay Property Taxes in Osaka
Osaka property taxes are billed once a year, in the beginning of April. The tax notice for property in Osaka is mailed by the city of Osaka to whatever addresses was recorded by the judicial scrivener during the sales process. This could be the address of the property itself, or a separate address that you or your agent provided to the judicial scrivener when you bought the property.
For foreign owners of property in Osaka, receiving the property tax statement itself can make
paying property taxes in Japan a challenge. If you do not live in Japan, and the bill is sent to the address of your Osaka property, you may not be aware the taxes are due. In many cases, the local government in Osaka will not send these tax notices to addresses that are not in Japan.
As you buy property in Osaka, we advise our clients to pay close attention to where the bill will be sent, what the property tax status is for the current tax year, and when the next Osaka property tax bill is due. You can ask your agent (during closing) for these details. Having a local Osaka tax representative can help make this process easier for foreign owners.
Once this payment form for fixed asset taxes in Osaka arrives, you have two options for how to pay those fees: pay it all at once before the first deadline, or pay it in separate installments (approximately once per quarter) throughout the year. If you choose to pay it in four installments, the deadlines for property taxes in Osaka are the ends of April, July, December, and February. There is no penalty for pre-paying (such as paying the whole year before the first deadline). However, if you miss a payment, the fine becomes larger when the payment is received beyond a certain date. The fine is a certain percentage of the due amount, and the fine due increases by day. The percentage also increases 30 days after the due date, so, without saying, paying property taxes in time will save you from unnecessary losses.
Instructions on how to pay Osaka property tax bills are included in the payment form received by the city. All property tax documents from Osaka are written in Japanese only.
Once you have the property tax statement, you can go to a local bank, a local tax office, the town hall, or a convenience store to pay those taxes. The bill must be paid in cash. Credit card and other forms of electronic payment are not accepted. It is also true that property taxes in Osaka cannot be paid by international wire transfer.
Primarily for owners living in Japan, there are other ways to pay; such as registering a local Japanese bank account for automatic withdrawals, or through an official government app or site that allows you to pay online with credit card.
Property Managers Can Pay Your Property Taxes in Osaka
One of the biggest challenges foreigners face when they own property in Osaka is receiving and paying the property tax each year. While some cities in Japan may issue property tax bills to addresses outside of Japan, Japanese tax statements are not commonly mailed to outside of the country. And since Osaka property tax bills must be paid locally, foreign owners have to be in Japan before the property tax deadline(s), and pay those tax bills on time, or pay late fee penalties.
To simplify the property tax process in Osaka, many foreigners will hire a local Osaka property management company to take care of their property. Osaka property managers provide many services, and often pay local Osaka bills for their clients.
Property managers in Osaka can pay your property taxes, as well as other ongoing bills like electricity, internet service, and more. If you work with an Osaka property manager (and you complete the required notification), you can have the property tax bill for your property sent to the company in Osaka that provides property management services, and that company can manage local bills related to the property on your behalf.
For introductions to property management companies in Osaka, contact us. We are happy to help.
Tax Administrators and Property Tax in Osaka
For property owners in Osaka that don’t need full property management services, another way to pay local property taxes in Osaka is to appoint a tax administrator. Tax administrators are also sometimes called tax representatives or tax agents in Osaka.
While a tax representative may be a finance professional (like a local Osaka tax accountant), tax agents in Osaka are not required to hold any special license. Any adult citizen that you trust (with an address in Japan) can theoretically receive the local bills and then serve as your tax administrator in Japan. The Japanese government requires you to complete the “Notification Form of Appointment of Tax Agent.” When that is done, the appointed tax representative can pay all your local taxes, as well as other bills related to owning property.
If you have income from renting your property in Osaka, your tax administrator may also be able to receive that income, coordinate with local Japanese tax accountants, and send income back to you in your home country.
For an introduction to tax administrators in Osaka, contact us. We are happy to help.
Income Tax for Real Estate in Osaka
Many foreign real estate investors in Osaka own real estate for the purpose of generating income from Osaka rental properties.
If you own real estate in Osaka, and that property generates a profit, you will be required to file annual tax returns in Japan, and potentially pay income tax for local Osaka rental units. For foreigners that buy property for personal use, if no income is generated, there is no income tax requirement.
For questions about income tax for property in Osaka, contact us and we can introduce you to a Osaka tax specialists with experience with real estate.
Tax on the Sale of Real Estate in Osaka
There can also be tax when a property in Osaka is sold.
If the price for the sale of a property in Osaka is higher than the price that was paid for the property, the property owner may owe sales tax for that property. If the property is sold for less than the owner paid for the property, there is no profit, and no Osaka capital gains tax to be paid.
If the ownership period of the sold real estate exceeds five years, it is classified as long-term capital gains, and if it is five years or less, as short-term capital gains. The ownership period is determined as of January 1st of the year of the sale.
— From the book Real Estate Transactions in Japan
Capital gains tax for real estate in Osaka is paid after the annual tax returns are completed (commonly the year after the property is sold).
Many foreigners will work with a licensed Osaka tax accountant to complete annual taxes and to pay capital gains on the sale of Osaka property. For introductions to local tax specialists in Osaka, contact us.
Real Estate Professionals in Osaka
For personal introductions to local real estate agents in Osaka, property managers, Osaka tax accountants, tax agents in Osaka, and other real estate professionals, please contact us. We are happy to help.
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For related articles on real estate in Osaka, see:
— List of English-speaking accountants in Osaka
— List of coliving communities in Osaka
— Population of Osaka City
— Statistics on the number of foreigners living in Osaka City by country
For information about Sapporo or property and housing in the Hokkaido region, see:
— Details on paying property taxes in Japan
— More information about Tax Administrators in Japan
— Buying real estate in Hokkaido
— Special property tax rates in Hokkaido
— Real estate listing websites in Japan
— Our list of Japanese Real Estate Books in English