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You may be asking yourself “Do I need to file a tax return for the real estate income from the home I rented out during my overseas assignment?”Do you ever wonder about this?

As mentioned above, there must be many people who have questions about tax treatment during overseas assignments. In conclusion, even if you live abroad, you are still obligated to pay taxes on real estate in Japan.

In today's article, we will provide an easy-to-understand explanation of the tax treatment of persons posted overseas and the proxy system (tax agent).

1. property tax on owner-occupied houses even if you move abroad

As mentioned at the beginning of this article, even if you move abroad and are treated as a non-resident, you must continue to pay property tax.

If you move abroad without following the necessary procedures, you may have a big problem later on.


Therefore, it is important to first understand what property tax is and what penalties will be incurred if you fail to follow the necessary procedures.


What is property tax?

Property tax is a tax on fixed assets owned as of January 1 of each year. Fixed assets specifically include the following

Land: residential land, fields, forests, etc.

Houses: residences, stores, warehouses, etc.

Depreciable assets: Business machinery and equipment, etc.

If any of the above assets apply to you, the relevant municipality will automatically calculate the amount according to the following calculation method (for land and houses).

Assessed value of fixed assets (tax base) x 1.4% (standard tax rate)

Property tax is an important source of funds for the construction and maintenance of infrastructure such as roads and public facilities we use, as well as for public services such as education and welfare.

Payment notices are sent out around May, and the tax for the year is paid in a lump sum or in four installments.

Delayed payment may result in late fees and, above all, may hinder the smooth operation of the public administration. Please make sure to pay your taxes as timely as possible.

Property Taxes Even if You Become a Nonresident in Japan

Even if you become a non-resident of Japan due to an overseas assignment or other reason, your obligation to pay property tax on your real estate remains the same.

If you are posted overseas without completing the necessary procedures, there is a very high possibility that you will be penalized by the local government.

The details of the penalty vary from municipality to municipality, but the following penalties are possible.

Lump-sum tax payment after returning home

Accrual of arrearage charges

Seizure of property

Depending on the length of your stay abroad, in addition to lump-sum payment upon your return to your home country, you may also be subject to a late payment penalty.

Although the rate of interest varies from municipality to municipality, at least 7-9% of the amount will be in arrears until the payment is made in full.

In the worst case scenario, if you do not pay for an extended period of time, your wages and fixed assets will be seized.

To avoid such a situation, please follow the proper procedures before traveling to Japan. Specific procedures will be explained in detail in the following sections. 2.

Appoint a tax agent

In order to pay property taxes and file tax returns in Japan during your extended stay abroad, it is essential to have a proxy to do so.

This agent is called a “tax agent.

The tax agent's specific duties include the following five items

Preparation of tax-related documents

Submission of prepared documents

Payment of taxes

Receipt of tax notices

Receipt of tax refunds

Even if the tax department of the local government wants to contact the taxpayer, it is inevitably difficult to do so smoothly because the taxpayer is located overseas.

Therefore, a tax payment administrator is appointed in Japan to serve as a contact person for tax-related matters.

As long as the tax is properly paid through the agent, there will be no problems after you return to your home country. If you are going to be away from Japan for a long period of time, do not forget to notify your tax agent.

Anyone living in Japan can appoint a tax agent.

Basically, anyone who lives in Japan can appoint a tax agent. As long as you can communicate well with the department in charge, there is no problem at all if you ask a relative or friend to be your tax manager.

However, if you have income and need to file a tax return, you will be subject to penalties if an unqualified person files the tax return on your behalf.

If you have real estate income or expect to incur gift taxes, you should ask a tax specialist such as a licensed tax accountant to file your tax return on your behalf.

In addition, if you ask a friend or acquaintance to do this for you, the other party will have to go through the procedures in the course of his or her work. Since you will be placing a considerable burden on them, you should make sure to obtain their approval and make your request with sincerity.

When you request a tax accountant, there is naturally a fee.

The amount varies from firm to firm, but it is advisable to budget several thousand yen to 50,000 yen per month.

There is a lot of information to cover today, so we will stop here.

Next week I will continue today's discussion.


It's a difficult subject, but it's one that you can't avoid.

It should be good to know if it happens!

Stay tuned for next week!


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