Buying in Japan9 min read

Japan Property Tax in 2026: Fixed-Asset & City-Planning Tax Explained

In Tokyo's 23 wards for fiscal 2026, fixed-asset tax uses a 1.4% rate and city-planning tax a 0.3% rate, but both depend on statutory taxable values; the person registered on January 1 remains the year's legal taxpayer even if the property is sold later.

By Engawa Editorial TeamPublished August 21, 2026Last reviewed August 21, 2026

Japanese property tax notice showing fixed-asset and city-planning tax calculations for a home and residential land — Annual property tax depends on assessed values, land classification and the January 1 ownership record. Illustration from the Engawa Journal.

If you own Japanese real estate, fixed-asset tax (固定資産税) is the recurring annual property tax, and many urban properties also owe city-planning tax (都市計画税). In Tokyo's 23 wards for fiscal 2026, the headline rates are 1.4% for fixed-asset tax and 0.3% for city-planning tax, but those rates apply to statutory taxable values rather than your purchase price, and residential-land relief can reduce the land tax base sharply.

The most important buyer detail is timing: the person registered as owner on January 1 is the statutory taxpayer for that fiscal year. A purchase completed later in the year does not make the buyer the legal taxpayer for that year's bill, although Japanese sale contracts commonly prorate the economic burden between buyer and seller at closing.

The two annual taxes are not the same thing

Fixed-asset tax applies to land, buildings and certain depreciable business assets. Municipalities impose it each year based on the property tax register; in Tokyo's 23 wards, the Tokyo Metropolitan Government administers it directly.

City-planning tax is an additional local tax on land and buildings located in designated urban-planning areas, principally urbanization promotion areas. It is usually billed together with fixed-asset tax.

Tokyo's 2026 guidance uses:

fixed-asset tax: taxable standard × 1.4%;
city-planning tax in the 23 wards: taxable standard × 0.3%.

Those percentages are useful budgeting anchors, but they are not a rule to multiply against the listing price.

Why the purchase price is the wrong tax base

Japan's annual property tax is calculated from values recorded for local tax purposes. The taxable standard can differ materially from the contract price, especially for residential land where statutory relief applies.

For small-scale residential land — generally the first 200 m² per dwelling unit — Tokyo's current rules set the standard residential-land base at:

1/6 of the assessed price for fixed-asset tax;
1/3 of the assessed price for city-planning tax.

For the portion of qualifying residential land beyond that small-scale allowance, the standard fractions are generally 1/3 for fixed-asset tax and 2/3 for city-planning tax.

There are also burden-adjustment rules, municipality-specific reductions and building-specific relief. So the clean buyer rule is: ask for the current tax notice and assessment details rather than estimating annual tax from the sale price.

A simple 2026 example

Assume a Tokyo property has:

land assessed price: ¥18,000,000;
building taxable value: ¥4,000,000;
all 150 m² of land qualifies as small-scale residential land;
no other special reductions are applied in this simplified example.

A rough fixed-asset-tax starting point would be:

land taxable standard: ¥18,000,000 × 1/6 = ¥3,000,000;
land fixed-asset tax: ¥3,000,000 × 1.4% = ¥42,000;
building fixed-asset tax: ¥4,000,000 × 1.4% = ¥56,000.

A rough city-planning-tax starting point would be:

land taxable standard: ¥18,000,000 × 1/3 = ¥6,000,000;
land city-planning tax: ¥6,000,000 × 0.3% = ¥18,000;
building city-planning tax: ¥4,000,000 × 0.3% = ¥12,000.

Before any Tokyo-specific or building-specific reductions, the simplified total is ¥128,000.

This is deliberately a budgeting example, not a tax calculation for a real property. Tokyo applies burden-adjustment rules to land, and the city-planning-tax treatment of small residential land can include additional metropolitan reductions.

Who pays when you buy during the year?

The statutory rule is easy to miss.

Tokyo's current guidance says the taxpayer for land and buildings is the person recorded as owner on January 1. Its example shows a property sold in February 2026: even after the ownership-transfer registration, the seller remains the statutory taxpayer for fiscal 2026 because the seller was the registered owner on January 1.

In practice, Japanese real-estate contracts often include a settlement where the buyer reimburses the seller for an agreed portion of that year's fixed-asset and city-planning taxes. That proration is a contractual/commercial settlement, not a transfer of the local government's statutory tax liability.

This distinction matters for overseas buyers because a line labelled "property tax adjustment" on the closing statement is not necessarily a separate government tax being imposed on the buyer.

If you are estimating total acquisition costs, keep this annual-tax settlement separate from real-estate acquisition tax, which is a different one-time prefectural tax triggered by the acquisition itself.

Tokyo's 2026 payment schedule

For property in Tokyo's 23 wards, the fiscal 2026 fixed-asset and city-planning tax installments are due on:

June 30, 2026;
September 30, 2026;
December 28, 2026;
March 1, 2027.

Tokyo says the 2026 tax notices were sent on June 1, 2026.

That makes the tax notice one of the most useful due-diligence documents for a purchase happening now: it shows what is actually being billed for the current fiscal year and gives the parties a concrete basis for any closing proration.

Why a new home's annual tax can jump later

New-build relief can temporarily reduce the building portion of fixed-asset tax. When that relief period ends, the annual bill can rise even if the assessed building value has not changed.

Tokyo gives a 2026 example of a two-story wooden home built in May 2022. Its building fixed-asset tax was reduced by half for fiscal 2025, then returned to the full amount in fiscal 2026 after the three-year new-home reduction expired. In Tokyo's example, total building fixed-asset plus city-planning tax rises from ¥70,000 to ¥119,000.

For a buyer of a relatively new home, ask whether the current bill still benefits from a temporary new-construction reduction. A low seller tax bill can otherwise create an artificially optimistic ownership-cost estimate.

Akiya buyers need to check the land classification

Cheap vacant houses can create another trap: buyers often assume the land automatically keeps residential-land treatment forever.

Residential-land relief depends on the land's qualifying use and the January 1 status. Tokyo explicitly notes that land without a qualifying residence on January 1 generally does not receive the residential-land treatment merely because a home is planned or under construction, subject to limited rebuilding exceptions.

So if you are buying an akiya for demolition, major reconstruction or land reuse, ask what happens to the tax classification after the building is removed. The annual carrying cost can change even if the land's underlying assessed price does not.

For renovation planning, also review Engawa's 2025 building-confirmation guide for akiya renovation before assuming a demolition-and-rebuild path is administratively simple.

Buyer due-diligence checklist

Before you commit to a property, collect these six items:

Latest fixed-asset/city-planning tax notice. Use the billed amount as the starting point, not a portal estimate.
Current assessed values and taxable standards. Separate land and building.
January 1 ownership position. Confirm who is the statutory taxpayer for the current fiscal year.
Closing-proration clause. Check the contract's reference date and calculation method; it is a commercial allocation, not the tax authority's rule.
Residential-land classification. Confirm whether the first 200 m² per dwelling receives small-scale residential treatment.
Temporary building reductions. For newer homes, identify when any fixed-asset-tax reduction expires.

If you are budgeting a purchase rather than an existing ownership position, use Engawa's Japan closing-cost calculator for transaction costs, then add the annual property-tax amount from the actual notice as a separate ongoing ownership expense.

FAQ

What is the annual property tax rate in Japan in 2026?

Fixed-asset tax commonly uses a 1.4% standard rate, while city-planning tax can be charged separately in applicable urban-planning areas. In Tokyo's 23 wards for fiscal 2026, the rates are 1.4% for fixed-asset tax and 0.3% for city-planning tax. The rates apply to statutory taxable standards, not simply the purchase price.

Is Japan property tax based on the purchase price?

No. Fixed-asset and city-planning taxes use local tax assessment values and taxable standards. Residential-land relief can reduce the land taxable standard substantially; for qualifying small-scale residential land in Tokyo, the standard fractions are 1/6 for fixed-asset tax and 1/3 for city-planning tax before other adjustments.

Who pays fixed-asset tax if a Japanese property is sold during the year?

The statutory taxpayer is the owner recorded on January 1 for that fiscal year. A buyer who acquires the property later in the year does not replace that person as the statutory taxpayer for the year's bill, although the sale contract often prorates the economic burden between buyer and seller.

When are Tokyo property taxes due in 2026?

For Tokyo's 23 wards, the fiscal 2026 installment deadlines are June 30, September 30 and December 28, 2026, and March 1, 2027. Other municipalities set their own payment schedules, so check the local tax notice for property outside the 23 wards.

Can fixed-asset tax rise after I buy a newer Japanese house?

Yes. A new-home reduction may be temporary. When the applicable reduction period expires, the building's fixed-asset tax can return to the unreduced amount even if the assessed value itself has not increased.

Sources

Sources checked 21 August 2026. This article explains general local-tax mechanics and is not tax advice. Tax rates, relief and payment schedules can differ by municipality and property facts; verify the current tax notice and confirm material decisions with the competent local tax office or a qualified Japanese tax professional.

Frequently asked questions

What is the annual property tax rate in Japan in 2026?

Is Japan property tax based on the purchase price?

Who pays fixed-asset tax if a Japanese property is sold during the year?

When are Tokyo property taxes due in 2026?

Can fixed-asset tax rise after I buy a newer Japanese house?

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