The post Tax Considerations When Foreign Investors Purchase Japanese Real Estate Through a Japanese Company appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>Many foreign investors consider establishing a Japanese company—either a Kabushiki Kaisha (KK) or Godo Kaisha (GK)—to acquire and hold real estate in Japan.
While this structure can provide administrative and operational advantages, it does not eliminate Japanese taxation. Understanding the tax, compliance, and practical implications before purchasing is essential.
When a Japanese company owns real estate, the property is legally owned by a domestic Japanese entity rather than a non-resident individual.
This can simplify certain administrative matters, including:
However, the company itself becomes subject to Japanese tax and compliance obligations.
Key requirements typically include:
Although company formation can often be completed relatively quickly, practical matters may require additional time, including:
Importantly, establishing a Japanese company does not automatically provide a Japanese visa or residence status.
Rental income earned by a Japanese company is generally treated as corporate income and is subject to:
Taxable income is calculated after deducting allowable business expenses, including management fees, maintenance costs, depreciation, and other qualifying expenses.
If the company later sells the property, any gain is generally taxed as corporate income.
Unlike some jurisdictions that apply separate capital gains tax regimes, gains realized by a Japanese company are generally incorporated into the company’s taxable profits.
Proper planning before acquisition can significantly impact the overall tax outcome upon exit.
A Japanese company must maintain proper accounting and tax compliance throughout its operation.
Annual obligations generally include:
Even where profits are limited, certain minimum local taxes and maintenance costs may still apply.
Profits belong to the company until they are distributed or otherwise paid to the foreign investor.
Common methods include:
Each method carries different Japanese and overseas tax consequences.
Payments made from a Japanese company to foreign shareholders or directors may be subject to Japanese withholding tax.
The applicable treatment depends on:
Tax treaty benefits are often available but are generally not automatic. Appropriate filings may be required before payments are made.
Tax considerations are only one part of the analysis.
Investors should also review:
A structure that works well at acquisition may create complications later if these issues are not considered from the outset.
Every investor’s situation is different.
The optimal structure depends on factors such as:
A Japanese company can be an effective vehicle for acquiring and holding Japanese real estate, but it is not automatically the most tax-efficient solution in every case.
Careful planning before acquisition can help avoid unexpected tax costs and compliance issues later.
Our trusted professional network provides comprehensive support for foreign investors purchasing Japanese real estate through a Japanese company.
Services include:
For tailored advice regarding your investment structure, please contact:
taxconsultation@core8eight.com
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]]>The post Hidden VAT Pitfalls When Selling Rental Properties appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>Many property owners rarely think about Consumption Tax (VAT) when receiving rental income.
This is because:
However, the situation can change significantly when you sell a property.
Rental properties are considered business assets.
As a result:
You may recall seeing this when purchasing a property through a real estate company, where the contract specifies:
Some investors may be thinking:
“I’ve sold investment properties before and never paid Consumption Tax.”
In many cases, this is because you were classified as a VAT-exempt business operator at the time of the sale.
This is where careful planning becomes important.
If the taxable portion of a property sale exceeds a certain threshold, you may become a taxable business operator two years later.
Result:
Once you become a taxable business operator, future taxable sales may be subject to Consumption Tax.
For example, if in 2028 you sell:
Then:
Many property owners ask:
“I couldn’t claim Consumption Tax when I purchased the residential rental property, so why is Consumption Tax charged when I sell it?”
This is a reasonable question.
As a result, the current framework generally works as follows:
One of the most overlooked aspects of the Consumption Tax system is timing.
The tax consequence is often not triggered in the year of sale.
Instead:
This means that:
To manage this risk, consider:
For investors with multiple properties, the sequence and timing of sales can have a significant impact on future tax exposure.
Selling a rental property can create hidden Consumption Tax exposure.
If overlooked, it may result in:
Before proceeding with a sale:
For professional advice, please contact our tax specialists at:
taxconsultation@core8eight.com
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]]>The post Japan 2025 Individual Income Tax Filing Deadline appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>If you earned Japan-source real estate income or capital gains from the sale of Japanese real estate during the 2025 tax year, you may be required to file an individual income tax return in Japan.
You may have a filing obligation if you:
Non-residents are generally required to appoint a tax agent (納税管理人 / Nozei Kanrinin) to file tax returns and make tax payments on their behalf.
Japan’s individual income tax returns must be filed within a fixed filing period. Filing or paying after the deadline may result in penalties and interest.
Taxpayers with a filing obligation should ensure that all procedures are completed by this date.
Individual income tax returns in Japan can be submitted electronically via the National Tax Agency’s e-Tax system:
Starting January 2025, Japanese tax offices no longer provide official receipt stamps on copies of paper-filed tax returns.
As a result:
For these reasons, taxpayers are strongly encouraged to use e-Tax when filing individual income tax returns.
Even if you have missed previous filing deadlines, it is still possible to file tax returns for up to five prior years.
If a tax return remains unfiled and is submitted only after:
additional penalties may apply on top of the standard failure-to-file penalty.
To minimize penalties, taxpayers are strongly encouraged to file voluntarily before any contact from the tax authorities.
Failure-to-file penalties generally apply as follows:
| Timing of Late Filing | Failure-to-File Penalty Rate |
| Filed before receiving audit notification | 5% |
| Filed after audit notification but before it becomes foreseeable that corrections will be made | 10% (15%) |
| Filed after it becomes foreseeable that corrections or assessments will be made through audit | 15% (20%) |
| If failure-to-file penalty or heavy additional tax was imposed within the past 5 years | 25% (30%) |
To reduce penalties and avoid unnecessary tax risks, taxpayers with outstanding filing obligations should consider filing as early as possible and before any inquiry from the tax authorities.
If you need assistance with:
please contact our tax professionals at:📩 taxconsultation@core8eight.com
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]]>The post New JPY 30 Million Capital Requirement appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>Beginning October 2025, Japan will implement a major reform to its immigration framework: the minimum capital requirement for obtaining a Business Manager Visa will increase from JPY 5 million to JPY 30 million.
This change aims to ensure that foreign-owned businesses in Japan demonstrate greater financial stability. However, the impact goes beyond immigration—there are also important tax and compliance implications to consider.
At incorporation, companies must pay a registration tax of 0.7% of stated capital (minimum JPY 150,000).
📌 Result: Higher upfront incorporation costs.
Corporate inhabitant tax is imposed annually, with rates depending on capital size:
📌 Result: A move to a JPY 30 million capital structure increases the annual burden by about JPY 113,000.
A hidden impact lies in consumption tax (VAT) compliance:
📌 Result: Immediate tax compliance requirements and potential cash flow implications.
The October 2025 reform makes entering the Japanese market more capital-intensive. Foreign investors should prepare by:
| Item | Capital JPY 5 million | Capital JPY 30 million |
|---|---|---|
| Registration Tax at Incorporation | JPY 150,000 (minimum applied) | JPY 210,000 (0.7% of capital) |
| Local Corporate Inhabitant Tax | ~JPY 72,000 annually (Kobe, ≤50 employees) | ~JPY 185,000 annually |
| Consumption Tax Obligation | Generally exempt for first 2 years | Mandatory from year 1 |
The October 2025 Business Manager Visa reform is a turning point in Japan’s policy toward foreign entrepreneurs. While it enhances business credibility, it also significantly raises tax costs and compliance obligations.
Foreign investors are strongly encouraged to consult both immigration and tax professionals to build structures that balance visa eligibility with tax efficiency.
📩 For professional guidance:
taxconsultation@core8eight.com
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]]>The post Tax Considerations for Co-Owned Real Estate in Japan appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>In Japan, even between spouses or parents and children, co-ownership shares must be accurately recorded.
A misunderstanding of how taxation works for jointly owned properties can lead to unintended tax liabilities—such as unnecessary income tax or even gift tax. Understanding how Japanese tax laws apply to co-ownership is essential to avoid costly mistakes.
Japan does not allow joint income tax filing for spouses or co-owners. When a co-owned property is sold, each owner must calculate and file their capital gains separately, based on their ownership percentage.
Mr. A and Mrs. B, a married couple, jointly sold their primary residence. The sale details were:
¥210,000,000 × 2/3 – (¥120,000,000 + ¥9,000,000) × 2/3 – ¥30,000,000 = ¥24,000,000
This gain is taxed at a long-term capital gains rate of 15% (plus additional taxes such as the Reconstruction Special Income Tax and local inhabitant taxes, if applicable).
¥210,000,000 × 1/3 – (¥120,000,000 + ¥9,000,000) × 1/3 – ¥30,000,000 = ¥0
Her gain is fully offset by the special ¥30 million deduction, so no capital gains tax is due.
Each co-owner may individually apply the ¥30 million special income deduction for a primary residence sale—it is not shared among co-owners.
Eligibility for the deduction must be assessed separately for each individual owner.
(For more details, see our article on: Special ¥30 Million Deduction for the Sale of a Primary Residence)
When a jointly owned property is rented out, each co-owner must report their share of the income and expenses in proportion to their ownership.
Rental income is classified as real estate income (不動産所得). Taxable income is calculated by subtracting allowable expenses from gross rental income.
These expenses must also be divided according to each owner’s share.
Each co-owner may apply for the Blue Return Special Deduction, provided they meet the filing and bookkeeping requirements individually.
Even for family-owned properties, each person must file and report separately.
If one co-owner receives 100% of the rent, the excess portion may be treated as a gift, which could trigger gift tax liability.
Co-owned property taxation is significantly more complex than taxation for single-owner properties. Each owner’s:
To ensure compliance and avoid unnecessary taxes, we strongly recommend expert guidance from qualified tax professionals.
Contact our trusted team at:
taxconsultation@core8eight.com
The post Tax Considerations for Co-Owned Real Estate in Japan appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>The post Real Estate Capital Gains Tax and the ¥30 Million Special Income Deduction appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>When you sell your primary residence in Japan, you may be eligible for a special income deduction of up to ¥30 million from your capital gains—regardless of how long you owned the property. This is known as the:
Special ¥30 Million Deduction for the Sale of a Primary Residence
居住用財産の譲渡所得の特別控除(3000万円特別控除)
To qualify for this special deduction, the property sold must fall into one of the following categories:
Additionally, the deduction may be applied if the property was lost due to a natural disaster.
You may not claim this special deduction if:
The deduction does not apply to the following types of properties:
How to Apply
To claim this special income deduction, you must:
Whether this deduction can be applied is a matter of professional judgment. To avoid overpaying when filing your capital gains tax return, it is essential to have the calculation and filing handled by a qualified tax professional.
For expert support with real estate capital gains tax filings, we highly recommend consulting our dedicated team of tax professionals specializing in property investments.
Contact us at:
taxconsultation@core8eight.com
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]]>The post Kitano Interview Relay: 2nd interview with Ms. Aoi Hirayama appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>I am Naomi, an assistant staff (now learning to be an agent) at Core Eight since last summer and I will be the interviewer. Kitano, Kobe has always charmed me as it does attract many others, but it was only recently that I started to see Kitano as a living place rather than a tourist place. Walking in Kitano in the morning to go to Core Eight’s office in the heart of Kitano before all the tourist come was a wake-up call to make me realise the charms Kitano has as a residential area. I thought it was such a pity that most people do not know what Kitano has to offer. By interviewing those who know the actual residential life in Kitano, I wanted to learn about the hidden charms of Kitano and share them with you all.
Our second interview is with Aoi Hirayama, the president of mod Entertainment Inc.
She has the experience of participating in Paris Collection and now she has an organic cosmetic select shop “cosme closet” in Kitano, Kobe. Her shop is on the second floor of a building “RIRAN’s gate”, which Tadao Ando built in 1986. Core Eight office is also in Tadao Ando’s building but those two buildings look very different.
The building Core Eight is in is more “Kitano-like” as bricks being used and all but the building “cosme closet” is in is stylish and urban. Even before entering the shop, I could feel my excitement.
Q: Can you tell us about your shop “cosme closet” before we start asking questions about Kitano?
A: I met cosmetics that is safe enough to eat and vegan but those were pop and cute and good to the skin in LA
by coincidence. I thought I would love to open a shop if I were to sell the cosmetics that are “Colorful, Pop and
Catchy that are vegan yet girls feeling excited about them!”. After I learned that there are needs of those
cosmetics in Japan, I set pop-up shops at PARCO in Hiroshima and Lucua 1100 and so on. By setting the pop-up
shop, I came to realize that it was necessary to have a flagship shop to show the people the view we have.
That’s how “cosme closet”, where only what I like using are sold opened.
Q: What is the reason of having your shop in Kobe? And why in Kitano?
A: “Atually we were really really close to set up a shop in a big shopping center.
There was a request to open a proper shop and we were about to sign the contract.”
To open a shop in Kobe was decided as I have connection to this place and also Kobe has its history.
I started to look for a tenant in January, 2016 but I couldn’t find a property that was ideal.
What I was looking for a tenant were:
*Not a newly built building which is brand new
*Having something urban yet cultural that also has history and culture of Kobe
I almost gave this up to look for a building with those criteria after some months and decide to open
a shop at a big shopping center. That was when this place was let for rent and I decided immediately
to rent this place and open a flagship shop here at RIRAN’s Gate.
Another realistic reason of choosing this place over the shopping center is to be able to control the temperature.
At those shopping centers, it is difficult to keep the temperature for the cosmetics. Since they are all derived from
100% organic ingredients, having goods melted in the morning by the air conditioner sometimes happened
while having the pop-up shops. This place is idealistic for this temperature control reason too!
Q: What are the good points to have a shop in Kitano?
What is important when selling cosmetics is word-of-mouth.
化粧品は絶対口コミ。アメリカはまさにそう。だからこそお客様第一主義で
”北野の会”があったり地域の親しみやすさ、ぎゅっとしたコミュニティが北野にはあるのでいいお客様が多いです。
また、閑静なところで異色なポップなものがあることご遠方からくる方が多いので、と北野周辺の美味しいお店のリストをまとめたファイルを作ってらっしゃることに感動しました!
お客様第一主義がこういったところにも表れていますね。
温度管理のため暖房をきつくいれない分、さっとブランケットを持ってきてくださったり商品にも人にも優しいcosme closet。
化粧があまりにもお粗末だった私に5分で!と化粧をしてくださったのですが、
シェーディングなどTVで見るものなんかを一切使わず私の肌に合ったファンデーションをしてくださっただけで、
小顔効果がすごくてみんなで笑いが出たほどでした 笑
5分で虜にされてしまったので次回はプライベートでお買い物をしに行きます!
北野の魅力だけではなく、化粧をすることの楽しさも教えて頂きました♪
で話題性の意味でもよかった!と平山さん。
東京でお仕事をされていたこともある平山さんが、東京在住の方々に北野にお店があるというと「いいじゃん」となる。
全国的に神戸北野の持っているイメージがいいのも理由の一つです、と話してくださいました。
Q: Can you recommend restaurants or cafes that you like in Kitano?
A: Bakery – Ca marche
This is a very popular bakery in Kitano.
Chocolateier – L’AVENUE
The chocolatier has won No.1 chocolate award in the world
Thai Restaurant – Krua Thai
Ex-WBC champion, Hasegawa Hozumi owns this restaurant
Quiche – Quiche-ya
Quiche specialty shop
Japanese restaurant – Eita
This resturant is one Michelin-starred restaurant and customers of my shop goes to Eita
before or after visiting our shop.
They have a list of the nice restaurants they can recommend in Kitano for those who come from distance and appreciate this information. I felt their “Customer First” with this. Since their cosmetics has to be stored in the cool place, the shop is not as warm ad other shops. However, they bring us the blanket for us, asking us how we are time to time. I don’t wear much…almost any make-up and they decided to make a change on my face using their products to show us and let us feel how their products are. After 5 minutes, half of my face was smaller and brighter!
They showed us charms of not only Kitano but also organic cosmetics!
Thank you so much, Ms. Aoi Hirayama, for giving us time to interview and give me a make over!!
For those who got interested in working and/or living in Kitano, please contact us!
CORE EIGHT 8 License No (1)11798
The post Kitano Interview Relay: 2nd interview with Ms. Aoi Hirayama appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
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The post KITANO PHOTO GALLERY appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>The post This Is KITANO! appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>However, Kitano surprised me when I saw its hidden beauty that lives there.I thought it was such a pity only so few see the real beauty that Kitano has to offer.






These photos only speak little of Kitano but they are indeed the parts of it.
The post This Is KITANO! appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>The post Kitano Interview Relay: 7th interview with Mr.Bernard Siman appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
]]>I am Naomi, an assistant staff (now learning to be an agent) at Core Eight since last summer and I will be the interviewer. Kitano, Kobe has always charmed me as it does attract many others, but it was only recently that I started to see Kitano as a living place rather than a tourist place. Walking in Kitano in the morning to go to Core Eight’s office in the heart of Kitano before all the tourist come was a wake-up call to make me realise the charms Kitano has as a residential area. I thought it was such a pity that most people do not know what Kitano has to offer. By interviewing those who know the actual residential life in Kitano, I wanted to learn about the hidden charms of Kitano and share them with you all.
Our 6th interview is with Mr.Bernard Siman.
For those who got interested in working and/or living in Kitano, please contact us!
CORE EIGHT 8 License No (1)11798
The post Kitano Interview Relay: 7th interview with Mr.Bernard Siman appeared first on Core 8 Properties - Kobe Japan | Luxury residences, investment and commercial properties.
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