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Akiya Property Taxes for Foreign Owners: Understanding Taxes and Penalties

Published On: July 30, 2026

Buying an akiya in Japan? Learn how Fixed Asset Tax, City Planning Tax, and vacant house penalties work for foreign owners, including how to reduce your annual tax burden.

1

Property Taxes for Foreigners
2

Vacant Penalties
3

Tax Exemptions
4

Final Thoughts

Supervised By: Hiroki Kazato

Real Estate Expert

Buying an akiya in Japan can have a surprisingly low price tag, but it also means you’ll need to keep up with annual property taxes. Whether you’re a local or a foreigner, the taxes are pretty similar. Your nationality isn’t what determines how much tax you owe; it’s really all about the assessed value, location, and condition of your property.

Most first-time owners tend not to be aware of these additional expenses. While in many cases the taxes tend to be lower than in western counties, they can still add up significantly.

Below you can find some information relevant to any foreign owner:

Do Foreigners Pay Different Property Taxes?

No.

Foreign buyers do not face any additional charges or higher rates. If you own any asset in Japan, land, house or even company equipment, you will be obligated to pay taxes yearly. Whether you are a tax resident in Japan, own a second home, or simply have invested in an abandoned house, you will be held responsible for property taxes.

Fixed Asset Tax

Fixed Asset Tax (Kotei Shisan Zei) is the most common form of property taxation in Japan. This type of levy is imposed on:

Land
Residential buildings
Commercial buildings
Business equipment

The taxes are calculated based on the assessed value of your asset, determined by the local government. Not the value at which you have purchased the property, nor its estimated current value. The assessed value can differ significantly from what you have paid or what the property is worth.

Standard Tax Rate

The standard rate, across most areas, for Fixed Asset Tax is 1.4%. Let’s see an example:

Assessed Value: 6,000,000 JPY
1.4% = 84,000 JPY Tax per year

The assessed value is updated every few years and can greatly vary from the price you have paid for the property.

City Planning Tax

If you own a property in a developed region, you might also be liable to pay the City Planning Tax (Toshi Keikaku Zei). This additional charge is applied to fund public works, such as roadworks, construction of parks, sewage systems and general development of the area. Not all properties are subject to this tax, for example, if you have bought an abandoned house in the countryside, it is unlikely that you will be required to pay this levy.

Typical Tax Rate

The standard maximum rate is 0.3%. Most areas, however, only charge around this amount.

Why Your Purchase Price Does Not Determine Your Taxes

One of the common misconceptions amongst foreign property owners is that they will be taxed based on the value at which they have bought the property.

Unfortunately for them, the assessed value is calculated following a strict set of criteria established by the national government. It is possible that the price you paid for the house is significantly higher or lower than the assessed value, based on:

Size of the land
Age and material of the building
Surrounding area
Replacement value
Valuation rules

This is especially important to keep in mind when buying an abandoned house, since the purchase price is most likely not going to reflect the assessed value.

Residential Land Tax Reductions

There is a special consideration for residential land, that can significantly reduce your tax obligations. For most small plots (up to 200 square meters per dwelling) the value for both the Fixed Asset Tax and City Planning Tax is only 1/6th and 1/3rd of the assessed value respectively. Larger plots of land can also see a partial reduction in tax.

Because of these reductions, many owners pay only a fraction of the property taxes every year, for the land their house sits on.

The Vacant House Penalty

The new legislation regarding abandoned properties and their owners has made the additional taxes on vacant houses much steeper. If your property is significantly run down and poses a threat to the community, it may be added to the registry of problematic houses. This is done following a special procedure carried out by local authorities.

One of the consequences of having your house listed as vacant, is that you are no longer entitled to the residential land tax reductions.

Without these benefits, the value of your land may see a significant increase, and therefore so will your property taxes. In some cases, owners report that their land tax has increased several-fold after neglecting their property. It is also important to note that not only are the taxes growing, but you still have to pay for the damage caused to the property, if any.

Does Living Abroad Make You Exempt From Taxes?

No.

Even if you reside abroad, you are still required to pay property taxes and report your payments to the tax authorities. If you are a foreign owner, it is advisable to appoint a tax agent in Japan, who will be able to contact you, report any tax liabilities and collect the necessary payments. Many people who do not reside in Japan also ask the agent to forward any tax-related documents, such as notices of tax arrears.

Final Thoughts

Since these taxes are dependent on the value and location of the asset, there is no hard and fast figure. As a rough estimation:

Small abandoned house in the countryside: 10,000 – 40,000 JPY
Renovated house in the countryside: 40,000 – 100,000 JPY
Large house with good characteristics and valuable land: 100,000+ JPY

The exact amount will differ, depending on the area you are in, whether you qualify for any reductions, the assessed value of your property and if you will be subject to additional City Planning Tax. The annual taxes for most small houses tend to be much lower than expenses on renovation and upkeep.

Tips For Buying An Akiya In Japan

Before finalizing any purchase of an uninhabited house, it is advisable to request the latest property assessment from the seller. Determine if your property will be subject to any additional fees, such as the City Planning Tax. See if you are entitled to any reductions in tax. Make sure the condition of the property will not trigger any additional levies. Calculate the expected tax payments and include them on your budget for renovations.

Following these steps should give you a fairly accurate impression of the additional costs involved with the purchase of the house.

A Final Word On Property Taxes In Japan

While these additional expenses are unavoidable, they are fairly predictable. Understanding what you will be required to pay in taxes can allow you to better estimate your yearly expenditures for the upkeep and ownership of your new property. The main thing to keep in mind, for most foreign owners, is that a well-maintained house is unlikely to incur any additional charges or penalties and will be eligible for reductions in tax.

A well-kept property will provide good opportunities for tax reductions, retain its value and keep you under budget for many years.