Ongoing Costs and Taxes
Owning a property in Japan doesn’t stop at the purchase price. Once the keys are in hand, you’ll face recurring expenses — from local taxes and insurance to building fees and maintenance. This guide breaks down the main costs so you can budget realistically.
💡 Note: For one-time costs like registration fees and the Real Estate Acquisition Tax (不動産取得税), see our post on upfront purchase expenses.
At a Glance: Typical Annual & Monthly Costs
| Cost Category | Typical Amount | Notes |
|---|---|---|
| Fixed Asset Tax (固定資産税) | 0.3% – 0.4% of assessed value | Annual, billed in 4 installments |
| City Planning Tax (都市計画税) | 0.3% (urban only) | Charged together with Fixed Asset Tax |
| Insurance (Fire + Earthquake) | ¥15,000 – ¥50,000/year | Required by lenders |
| Maintenance & Repairs | ~1% property value/year | More for akiya/kominka |
| Condo/Mansion Fees | ¥10,000 – ¥30,000/month | Management + reserve fund |
| Utilities | ¥10,000 – ¥30,000/month | Even if little/no usage |
| Rental Income Tax (investors) | Varies | Annual filing required |
Property Taxes
Fixed Asset Tax (固定資産税)
- Annual tax, billed April/May.
- Based on assessed value (not purchase price).
- Land usually taxed lightly; buildings depreciate over time.
Case in Point: A Nagano buyer paid almost nothing on land, but still owed a hefty amount on an old house because the local office hadn’t fully depreciated it — their agent helped appeal and reduce it.
City Planning Tax (都市計画税)
- Applies only in designated urban zones.
- 0.3% of assessed value, billed with Fixed Asset Tax.
Building Costs (for Condos/Mansions)
- Management Fee (管理費 kanri-hi): Cleaning, electricity, admin.
- Long-term repair fund (修繕積立金 shuzen tsumitatekin): Long-term repair fund.
Combined: ¥10,000–¥30,000/month.
Case in Point: One Tokyo condo doubled its fees in 2023 after years of underfunding the reserve.
Insurance
- Fire insurance (required with mortgage).
- Earthquake insurance (optional but recommended).
- ¥15,000–¥50,000/year.
Utilities
- Electricity, gas, water: monthly charges.
- Even vacant homes often face standing fees.
- Condo utilities may be billed per-unit or shared — check before buying.
Maintenance and Upkeep
- For homes: gutters, roof, septic tanks, exterior repairs.
- Budget 1% of property value/year.
- Older homes: 2–3% in early years.
For Investors: Rental and Withholding Taxes
- Rental income is taxable, even for non-residents.
- Deductible expenses: interest, depreciation, repairs.
- Non-resident sellers: buyers may need to withhold 10.21% of sale price and pay it to tax office.
Tip: Always confirm seller residency status before closing.
Quick Q&A: Taxes and Ongoing Costs
Do I have to pay property taxes even if I’m not living in the house?
Yes. Fixed Asset Tax and City Planning Tax apply to ownership itself, not occupancy. Even a vacant akiya will generate annual tax bills.
When do property tax bills arrive?
Typically in April or May, based on the prior year’s assessed value. Most municipalities allow payment in four quarterly installments.
I bought a house for ¥5 million. Will my tax bill be small?
Not necessarily. Taxes are based on the government’s assessed value, which may differ from the market price. A cheap old house can still carry relatively high taxes if the building hasn’t fully depreciated.
Why are my condo/mansion fees so high compared to a house?
Monthly fees cover shared services (cleaning, lighting, admin) and a repair reserve fund. In underfunded buildings, fees often rise sharply to cover future renovations.
What happens if I don’t pay condo fees?
They are legally tied to ownership. Failure to pay can result in penalties, lawsuits, and even foreclosure in extreme cases.
Do I need earthquake insurance?
It’s optional but strongly recommended, especially in areas with a history of seismic activity. Some lenders may pressure you to take it out.
How much should I budget for upkeep on a freestanding home?
A good rule is 1% of the property’s value per year. For older homes (kominka, akiya), plan for 2–3% in the first few years as deferred maintenance gets caught up.
If I’m not using electricity, gas, or water, can I avoid charges?
Usually you’ll still pay a basic monthly fee unless you cancel the contract. Reconnection can require paperwork, technician visits, or fees.
Do rural homes have extra costs?
Yes. Private wells and septic tanks require inspections and maintenance by law. In snowy regions, owners often share the cost of snow removal with neighbors.
Do I need to file a Japanese tax return every year?
Not always. You must file if:
- You earn rental income
- You’re claiming a housing loan deduction
- You sell a property and make a gain
Foreign owners renting out property must appoint a local tax agent (税金管理人).
What about taxes on rental income?
Rental income is taxable, even for non-residents. Deductible expenses include mortgage interest, depreciation, and repairs. Tax rates vary with income.
What is withholding tax when buying from a non-resident seller?
If the seller is a non-resident, the buyer must withhold 10.21% of the sale price and pay it to the tax office. If you don’t, you could be held liable for the unpaid tax later.
Can property taxes ever be reduced?
Sometimes. Common ways include:
- Acquisition Tax reductions for first-time buyers or certain property types
- Mortgage Loan Tax Credit (住宅ローン控除)
- Capital gains exemptions if you’ve lived in the home for a certain period
