Japan rental income tax for foreign owners — a 2026 guide

If you own a property in Japan and rent it out, you owe Japanese tax on that rent — whether or not you live here. What changes with your residence status is how much of your worldwide income Japan taxes, which deductions you get, and whether your tenant has to withhold tax before paying you.

This guide covers both cases: foreign residents living in Japan, and non-residents owning from abroad. The rules diverge sharply, so each section says which one it applies to.

A note on sources. Everything here is sourced to Japanese-language primary material — 国税庁 (National Tax Agency) pages and the statute itself on e-Gov. We do that because the NTA's English pages are undated and can lag the Japanese ones. Where the official English version disagrees with current Japanese law, we say so and follow the Japanese source. There is one such conflict live right now, and it is in this guide.

Are you a resident or a non-resident?

Japanese tax law defines three categories (所得税法2条1項3号〜5号):

• Resident (居住者) — an individual who has a 住所 (domicile) in Japan, or who has had a 居所 (place of abode) here continuously for one year or more.
• Non-permanent resident (非永住者) — a resident without Japanese nationality whose total periods of domicile or abode in Japan over the past ten years come to five years or less.
• Non-resident (非居住者) — anyone who is not a resident.

The practical test the tax office actually applies is a presumption in the enforcement order (所得税法施行令14条1項1号・15条1項1号): you are presumed resident if you hold a job in Japan that normally requires living here a year or more, and presumed non-resident if you hold such a job abroad.

We cannot tell you which you are. 住所 means your 「生活の本拠」 — the base of your life — and the NTA states it is determined 「客観的事実によって判定する」, by objective facts. Those enforcement-order rules are presumptions, not tests. If you are near the line, this is a question for a 税理士 or your 税務署.

What Japan taxes, by status

• Resident (not 非永住者) — worldwide income (所得税法7条1項1号).
• 非永住者 — everything except foreign-source income, plus foreign-source income to the extent it is paid in Japan or remitted to Japan (7条1項2号). Your home-country rental may therefore be partly outside Japanese tax.
• Non-resident — Japanese-source income only (5条2項1号, 7条1項3号).

Rent from a property located in Japan is Japanese-source income (161条1項7号) and is taxed on an aggregate basis (総合課税) whether or not you have a permanent establishment here (164条1項). So it is in scope for every reader of this guide.

Does nationality change anything? No.

For a resident, Japanese rental income is taxed exactly as it is for a Japanese national. We checked this directly: across the whole Income Tax Act, the word 「国籍」 (nationality) appears five times, and none of them touches 不動産所得 (real-estate income). The only nationality-linked status is 非永住者 — and that status is favourable, narrowing what foreign-source income Japan taxes. A Japanese national can never be a 非永住者.

The 20.42% withholding — and the exemption most owners miss

Non-residents. When a non-resident is paid rent for Japanese property, the payer must generally withhold 20.42% (20% income tax plus 0.42% 復興特別所得税, which runs through 令和19年 / 2037) and remit it by the 10th of the following month (所得税法212条・213条).

The exemption. Under 所得税法施行令328条2号, no withholding is required where rent for land, a right over land, or a house or building is paid by an individual who rented it to live in themselves, or to house a relative. All three conditions must hold:

1. The property is land, a right over land, or a house/building.
2. The payer is an individual. A company paying the rent — including company-housing arrangements where the employer is the lessee — must withhold, whether or not the individual is in business.
3. That individual rented it as a residence for themselves or a relative. An individual renting it as a shop or office is not covered.

Read the consequence carefully. This removes your tenant's obligation to withhold. It does not exempt your income. You still have Japanese-source income, you still file, and you still owe tax — you simply have no withholding credit to offset it. Most owners in this position should expect to pay on filing, not receive a refund.

One case we cannot resolve for you: where a management company collects the rent and remits it to you, we found no authority on who counts as the payer for withholding purposes. Check that with a professional.

Withholding is not the end — you still file

For rental income the withholding is a prepayment, not a final tax. 所得税法166条 applies the residents' filing, payment and refund provisions to a non-resident's aggregate-taxation income, and the NTA states plainly that a non-resident may file to obtain a refund of the withheld tax. The filing window is the same as for residents: 16 February to 15 March of the following year. For 2026 income that is 16 February – 15 March 2027.

⭐ Which deductions you actually get — and where NTA's English page is wrong

Non-residents get exactly three deductions (所得税法165条1項, which excludes 73–77条 and 79–85条 from the list applied to non-residents): 雑損控除 (casualty loss), 寄附金控除 (donations), and 基礎控除 (basic exemption). The casualty deduction is limited to losses on assets located in Japan. Medical, social-insurance, life and earthquake insurance, spouse, dependant, disability, single-parent and working-student deductions are not available.

The amount, for 2026 income:

• Non-resident for the whole year: ¥620,000 where total income is ¥23.5m or less.
• Resident: ¥1,040,000 (total income ≤¥4.89m), ¥670,000 (≤¥6.55m), or ¥620,000 (≤¥23.5m).

The difference is that the top-up in 措置法41条の16の2 applies to residents only. One exception worth knowing: if you were resident for part of 2026 and left, you had a residence period that year, so the resident ladder applies to you.

There is a further wrinkle that catches out anyone checking the statute directly: the 2026 reform takes effect on 1 December 2026 while applying to the whole 2026 tax year. Until that date, e-Gov's current-in-force text of 所得税法86条 still shows the old figures. The article's numbers are right; the statute database simply has not caught up yet.

If you have a rental in your home country too

Residents. Since 令和3年 (2021), where a loss arises on an overseas used building whose useful life was set under the used-asset rules (the NTA refers to the 簡便法, a simplified method), the part of the loss equal to that building's depreciation is treated as not having arisen (措置法41条の4の3第1項). That blocks it both against Japanese rental income and against your other income.

It is not lost forever: the denied depreciation is added back to your acquisition cost when you eventually sell (第3項), reducing the capital gain then.

In practice this targets a foreign resident who is no longer a 非永住者 — a non-resident's overseas rental is outside Japanese tax entirely, and a 非永住者's is taxed only on a paid-in-Japan or remittance basis.

Reporting overseas assets

Residents excluding 非永住者 holding overseas assets totalling more than ¥50m on 31 December must file a Report of Foreign Assets (国外財産調書) by 30 June of the following year. Filing it — and listing the asset — cuts the under-declaration penalty by 5%; not filing adds 5%.

A separate Report of Assets and Liabilities (財産債務調書) can apply at higher thresholds. Note that unlike the foreign-assets report, one of its triggers can catch a filing non-resident — do not assume these reports are a residents-only concern.

Treaties

The NTA states that most of Japan's tax treaties allow the country where a property is located to tax rent from it. So a treaty will generally not remove Japan's right to tax your Japanese rental income. Anything beyond that — rates, credits, how your home country treats it — depends on the specific treaty and your own circumstances, and is outside what we can responsibly state here.

If you are a non-resident: the tax representative

Where an individual has neither a 住所 nor a 居所 in Japan (or is about to cease to have them) and has a tax matter to handle, they must appoint a 納税管理人 — a tax representative — and notify the tax office (国税通則法117条). The form is the 「所得税・消費税の納税管理人の選任・解任届出書」, filed with the tax office for your 納税地, by the date you leave. It can be filed online or on paper by post.

Note that the NTA uses several English names for this role across its own materials — "tax representative" and "tax agent" both appear. They mean the same thing.

Ignoring the requirement has teeth: the tax office may demand the notification in writing and, failing that, may designate a representative for you — for an individual, that can be an adult relative in your household or a party you have a close contractual relationship with (117条3項〜5項).

Filing in English — what actually exists

Honestly: not much. There is no English version of the NTA's online return-preparation tool (確定申告書等作成コーナー). An English input manual exists for the Japanese screens, but it states that it cannot be used by anyone with income beyond salary — which excludes every reader of this guide.

For e-Tax, the ID/password method still works for 2026 but is scheduled to end from 2027; new IDs stopped being issued on 1 October 2025. The remaining routes need a My Number Card or an in-person visit to a tax office.

We could not find any official statement on whether a non-resident can use e-Tax, so we are not going to guess. What is clear is that the tax-representative route works, and the appointment form can be filed on paper by post.

Sources for this article (primary material)

← Back to guides

This article is general information, not individual tax advice. Rules change and individual circumstances differ — confirm your own position with a licensed Japanese tax professional (税理士) or your local tax office (税務署). Sourced from Japanese-language 国税庁 and e-Gov materials current as shown in the “As of” column (令和8年分 / 2026 tax year).