What are closing costs in Japan?

Typically 4.6–6.8% of the price on a $300,000 purchase.

Buying property in Japan as an American

Q: How is rental income taxed in Japan?

Japanese income tax for non-residents: Non-residents file a return (16 Feb–15 Mar) through a tax agent. Rental profit is taxed at 5–45% (bands in USD) plus a 2.1% surtax. Non-residents get only the basic deduction (¥620,000 from 2026, ¥580,000 for 2025); the temporary top-ups are for residents only. There is no inhabitants tax on the rent. A 20.42% withholding applies when the tenant is a company, or an individual using the unit for business. It does not apply when an individual rents it as their own or a relative's home. The withholding is credited on the return. Building depreciation is deductible. US–Japan tax treaty in force; Japanese tax on Japanese rent is creditable against US tax.

Japan lets foreigners buy land and buildings with no restrictions, and the weak yen has made prices look cheap in dollars. Older buildings lose value quickly, short-term rentals are capped, and getting a mortgage as a non-resident is hard.

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Key numbers

Gross rental yield

4.0–7.0%

Closing costs

4.6–6.8%

On a $300,000 purchase

Tax on rent (net basis)

5%–45%

Japanese income tax for non-residents

Entry prices from

$60,000

4–8 weeks to close

Can Americans buy?

Allowed

Foreigners can own land and buildings outright; the transfer is registered by a judicial scrivener.

Owning property gives no right to live in Japan. Since 16 October 2025 the business-manager visa requires ¥30M of capital, one full-time employee, management experience or a degree, and Japanese ability. The digital nomad visa (US eligible) allows 6 months, cannot be renewed, and needs ¥10M of yearly income plus health insurance.

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Sources: National Tax Agency (Japan); US Department of State – country information

How rent is taxed

Non-residents file a return (16 Feb–15 Mar) through a tax agent. Rental profit is taxed at 5–45% (bands in USD) plus a 2.1% surtax. Non-residents get only the basic deduction (¥620,000 from 2026, ¥580,000 for 2025); the temporary top-ups are for residents only. There is no inhabitants tax on the rent. A 20.42% withholding applies when the tenant is a company, or an individual using the unit for business. It does not apply when an individual rents it as their own or a relative's home. The withholding is credited on the return. Building depreciation is deductible.

US–Japan tax treaty in force; Japanese tax on Japanese rent is creditable against US tax.

As a US taxpayer you also report the rent on Schedule E. Your free ranking estimates the combined effect for your state and income.

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Sources: National Tax Agency (Japan); PwC Worldwide Tax Summaries; IRS – United States income tax treaties

Main risk

Private short-term lets are capped at 180 nights a year, with tighter local rules.

Registered private lodging (minpaku) is capped at 180 nights a year. A 2026 government notice lets cities ban it in residential areas, and several Tokyo wards and Kyoto restrict it to weekends or certain seasons. Most condo bylaws ban it. Osaka stopped accepting new special-zone (365-day) applications on 29 May 2026. Inns need a full hotel-business licence.

Data last verified on October 19, 2026 · AbroadYield research desk – public sources cited in each section

Sources: US Department of State – country information; Global Property Guide (yields, transaction costs)

Cities we cover

Tokyo$11,394/m² · gross 2.7%
Osaka$4,748/m² · gross 4.1%
Kyoto$4,115/m² · gross 4.4%
Fukuoka$2,849/m² · gross 5.3%

Is Japan right for you?

Get your free ranking of all destinations in 3 minutes, with after-tax estimates for your US state and income.

Get my free ranking