Many inherited houses in Japan are eventually sold. A little preparation makes the sale smoother and can make a real difference to the tax.

First: register the inheritance

You can't sell a house that's still in the deceased's name. Registration is now mandatory anyway — see the inheritance registration deadline.

How the gain is taxed

The gain is the sale price minus the acquisition cost and selling expenses. For inherited property, the deceased's acquisition date and cost carry over to you — which often makes the gain "long-term". If the cost can't be proven, a deemed cost of 5% of the sale price may be used, which can make the taxable gain large.

  • Long-term (owned more than five years as of 1 January of the year of sale): generally about 20.315% including local tax for residents of Japan.
  • Short-term: generally about 39.63%.

Non-residents usually aren't charged the local inhabitant's portion, but are subject to Japanese income tax on the gain.

Withholding when the seller lives abroad

When a non-resident sells Japanese real estate, the buyer generally must withhold 10.21% of the sale price and pay it to the tax office. The main exception is an individual buying for their own home at ¥100 million or less. You then file a Japanese tax return (through your tax representative) to settle the actual tax and recover any excess.

The ¥30 million deduction for inherited vacant homes

A special deduction of up to ¥30 million from the gain can apply when selling an inherited house that the deceased lived in alone — broadly, houses built before 31 May 1981, sold within a set period and under ¥100 million, after earthquake-strengthening or demolition. The conditions are strict, the relief is time-limited and has been adjusted over the years (including a lower amount when there are three or more heirs), so check eligibility with a tax accountant before you sell.

Preparing the house

  • Clear the contents and deal with oversized-rubbish rules.
  • Fix what puts buyers off: leaks, broken glass, overgrown gardens.
  • Gather documents: inspection reports, repair records, hazard-map position and a floor plan. A 3D scan and floorplan helps remote buyers.

Homes we've looked after come with years of photo reports — useful evidence of how the house has been kept.

This guide is general information, not legal or tax advice. Rules change and every case is different — for decisions about your own property, speak to a licensed judicial scrivener (司法書士), tax accountant (税理士) or lawyer. We work with them every week and are happy to introduce you.