Income tax on rent, worked example, in Japan
Non-Resident Couple:
| Non-resident couple´s joint monthly rental income1 | ||||
| Monthly Rental Income2 | 1,500 | 6,000 | 12,000 | |
| Annual Rental Income | 18,000 | 72,000 | 144,000 | |
| Less: Depreciation 3 | (11,880)3 | (29,700)4 | (59,400)5 | |
| = Taxable Income | 6,120 | 42,300 | 84,600 | |
| INCOME TAX7 | ||||
| Flat rate | 10% | 612 | 4,230 | 8,460 |
| Annual Income Tax Due | 612 | 4,230 | 8,460 | |
| Tax Due as % of Gross Income | 3.40% | 5.88% | 5.88% | |
| Source: Global Property Guide research |
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1 The property is jointly owned by husband and wife.
2 Exchange rate used: 1.00 US$ = 113.00 JPY
3 Depreciation expense is claimed against the acquisition cost of the property and is computed through the straight-line method.
4 The property is worth US$600,000.
5 The property is worth US$1,500,000.
6 The property is worth US$3,000,000.
7 Rental income earned by nonresident individuals is taxed at a flat rate of 10%.
Non-Resident Couple (property owned through a local corporation):
| Non-resident couple´s joint monthly rental income1 | ||||
| Monthly Rental Income2 | 1,500 | 6,000 | 12,000 | |
| Annual Rental Income | 18,000 | 72,000 | 144,000 | |
| Less: Depreciation 3 | (11,880)3 | (29,700)4 | (59,400)5 | |
| = Taxable Income | 6,120 | 42,300 | 84,600 | |
| INCOME TAX7 | ||||
| Corporate Income Tax | 15% | 918 | 6,345 | 12,690 |
| Annual Income Tax Due | 918 | 6,345 | 12,690 | |
| Tax Due as % of Gross Income | 5.10% | 8.81% | 8.81% | |
| Source: Global Property Guide research |
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Notes
1The property is jointly owned by husband and wife through a local corporation.
2 Exchange rate used: 1.00 US$ = 113.00 JPY
3 Depreciation expense is claimed against the acquisition cost of the property and is computed through the straight-line method.
4 The property is worth US$600,000.
5 The property is worth US$1,500,000.
6 The property is worth US$3,000,000.
7 Rental income earned by nonresident individuals who own property through a local corporation is taxed at the corporate tax rate of 15%.
