Fixed asset tax and city planning tax in Tokyo: rates, a worked example and how to pay (also from overseas)

Both taxes are charged for the whole fiscal year to the person registered as owner in the fixed asset tax register on 1 January. They apply to land and buildings, and in the 23 wards the Tokyo tax offices collect them.

No tax is charged when the taxable base is under ¥300,000 for land or ¥200,000 for a building.

In the 23 wards the fixed asset tax rate is 1.4% and the city planning tax rate 0.3%. They apply to a taxable base derived from the official assessed value, not to the sale price. The assessed value is usually lower than the price; the figures for a specific property are on its tax notice or assessment certificate.

Land under a home is taxed on a reduced base. A condominium’s land is split among its units, so most units count as small residential land.

Real bills can differ because of transitional adjustments. Use this as a rough guide.

New homes that meet floor-area conditions pay half the building’s fixed asset tax (on up to 120㎡) for a set period: three fiscal years, or five for fire-resistant buildings of three or more storeys. The relief has a deadline and other conditions, so check the current rules when buying new. It usually does not apply to resale purchases.

In the 23 wards the tax is paid in four instalments: June, September, December and February. In the year of a sale the seller, as owner on 1 January, receives the whole year’s bill, so buyer and seller usually split it by days from the handover date. The contract sets whether the year counts from 1 January or 1 April.

Owners without an address in Tokyo must appoint a tax agent to handle their tax matters and report the appointment to the tax office for the property’s area. Tax notices then go to the agent. Owners usually ask family, a friend, the property manager or a tax accountant.