The two taxes: kotei shisan-zei (1.4%) and toshi keikaku-zei (0.3%)
The annual "property tax" bill you receive actually bundles two separate local taxes, collected together by the municipality:
- kotei shisan-zei (kotei shisan zei, fixed-asset tax): standard rate 1.4% of the assessed value;
- toshi keikaku-zei (toshi keikaku zei, city-planning tax): 0.3% maximum, only in designated urban zones shigaika kuiki. Some municipalities apply a lower rate, or none outside the urban zone.
Both are calculated on the same base, the assessed value kotei shisan-zei hyōka-gaku (see below). They are municipal taxes: the exact rate and whether toshi keikaku-zei applies depend on the city hall. Before buying, always ask for the property's current tax figure — it appears on the seller's tax notice and in the sale file we walk you through in our buying guide.
The tax base: the assessed value kotei shisan-zei hyōka-gaku
The tax is never based on the purchase price, but on the assessed value kotei shisan-zei hyōka-gaku (kotei shisan zei hyōkagaku), set by the municipality and revised every three years (last revision in 2024).
Useful benchmarks:
- for land, the assessed value is roughly 70% of market value;
- for a building, it equals the reconstruction cost less depreciation and falls with age — an old wooden house may be assessed at only a few hundred thousand yen.
As a result, on a property bought for ¥30,000,000 (≈ €200,000), the total assessed value may be only ¥12–18M. It is this figure, not the price paid, that forms the base. You can check it at the city hall through the tax register kotei shisan kazei daichō or the assessment certificate hyōka shōmeisho.
Residential-land relief: the base divided by six (shōkibo jūtaku yōchi)
This is the single most important relief to understand. As soon as land carries a habitable dwelling, it qualifies for the residential-land special measure jūtaku yōchi no tokurei:
| Land area | kotei shisan-zei base | toshi keikaku-zei base |
|---|---|---|
| Up to 200 m² (shōkibo jūtaku yōchi) | ÷ 6 (16.7%) | ÷ 3 (33.3%) |
| Above 200 m² (ippanjūtaku yōchi) | ÷ 3 (33.3%) | ÷ 1.5 (66.7%) |
In other words, on the first 200 square metres the fixed-asset tax base is just a sixth of the assessment. That is why the annual property tax on a small house is often modest — around ¥80,000–150,000 (€530–1,000) per year in many provincial cities.
⚠ Common mistake: demolishing without thinking
This relief vanishes if the land becomes vacant (house demolished). See the akiya section below: tearing down a derelict house can multiply the land's property tax by three to six times.
The nōzei tsūchisho notice and payment in four instalments
Each year, between April and June, the municipality sends the owner-of-record on 1 January the tax notice nōzei tsūchisho (nōzei tsūchisho), together with the payment slips nōfusho.
Payment is made in four instalments (April, July, December, February depending on the city), or in a single lump sum. Methods: bank, convenience store, direct debit kōza furikae, and increasingly payment apps (PayPay, etc.).
Useful reminder at purchase: the year's tax is owed by the seller (owner on 1 January), but by custom the buyer reimburses the pro-rated share up to 31 December — the kotei shisan-zei seisan-kin detailed in our article on property purchase costs in Japan.
Akiya, vacant land and non-residents: the special cases
Akiya and vacant land: beware the jump
Two situations push the property tax up:
- Vacant land (no dwelling): no jūtaku yōchi relief, the base stays at full value. Demolishing a house to sell the land can therefore triple, even sextuple, the tax.
- Problem akiya: under the Vacant Houses Act akiya-tō taisaku tokubetsu sochi-hō, an abandoned house may be classified tokutei akiya (or kanri fuzen akiya). The municipality can then strip the jūtaku yōchi relief, sharply raising the tax. That said, the real issue with an akiya is still location (station ≤ 20-30 min, shops), not just tax.
Non-resident: appoint a nōzei kanrinin
An owner who does not live in Japan must appoint a tax agent nōzei kanrinin (nōzei kanrinin) with the city hall: this person (management agency, relative, accountant) receives the nōzei tsūchisho and pays the tax on your behalf. Without one, the notice reaches no one and late penalties pile up. Our buying support helps you set up this relay, and our yield simulator folds the property tax into net return.
In short: a moderate annual charge, but plan for it
Japan's property tax stays reasonable for a residential buyer: the kotei shisan-zei 1.4% + toshi keikaku-zei 0.3% combination, applied to a low assessed value and divided by six on residential land, often lands below ¥150,000 (€1,000) per year for a small provincial house.
Three reflexes before buying: 1) ask the seller for the actual tax figure; 2) never demolish a house without measuring the loss of the jūtaku yōchi relief; 3) if you are non-resident, arrange a nōzei kanrinin from settlement day. To go further, see capital-gains tax on resale and rental-income tax for non-residents. The properties in our listings state the ballpark tax figure.
Frequently asked questions
What is the property tax rate in Japan?
The standard fixed-asset tax kotei shisan-zei rate is 1.4% of the assessed value, plus a city-planning tax toshi keikaku-zei capped at 0.3% in urban zones. These rates are set by the municipality and applied to the assessed value kotei shisan-zei hyōka-gaku, which is usually well below the purchase price.
How is the property tax base calculated?
The base is the assessed value kotei shisan-zei hyōka-gaku set by the city hall and revised every three years — about 70% of market value for land, and reconstruction cost minus depreciation for a building. It is therefore never the price you actually paid that forms the base.
Why does the tax rise if I demolish the house?
Land carrying a dwelling enjoys the jūtaku yōchi relief: the base is divided by six on the first 200 m². If you demolish the house, the land becomes vacant, this relief disappears, and the land's property tax can be multiplied by three to six. Think carefully before any demolition.
How do you pay property tax if you live abroad?
A non-resident owner must appoint a tax agent nōzei kanrinin with the municipality. This person (management agency, relative or accountant) receives the tax notice nōzei tsūchisho and pays the tax on your behalf, in four instalments or one lump sum. Without an agent, the notice never reaches you and late penalties accrue.
When is the property tax notice sent in Japan?
The tax notice nōzei tsūchisho is sent between April and June to whoever is the registered owner on 1 January. It comes with payment slips nōfusho allowing settlement in four instalments (bank, convenience store, direct debit kōza furikae or payment app).
Official sources
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