If you’re a non-resident or foreign national thinking about selling your property in Japan, you might be eligible for a massive tax deduction—up to ¥30 million off your capital gains. But do you actually qualify?
Let’s break it down with real examples, requirements, and tips to make sure you don’t miss out on this valuable opportunity.
💡 What Is the ¥30 Million Special Deduction?
Japan’s ¥30 million special deduction is a tax benefit available to people selling their main residence in Japan. It allows you to deduct up to ¥30,000,000 from the taxable capital gains of the sale.
If your profit is less than that amount, you could owe no capital gains tax at all.
✅ Who Can Use the ¥30 Million Deduction?
Even as a foreigner or non-resident, you may qualify if your situation fits the following:
◉ Case 1: You lived in the home and moved abroad recently
- You previously lived in the property.
- You moved out less than 3 years ago.
- You did not rent it out after leaving.
✅ You qualify.
◉ Case 2: You left Japan for work and kept the house empty
- You were transferred abroad or left Japan permanently.
- You didn’t rent the home.
- The sale occurs within 3 years of moving out.
✅ You qualify.
◉ Case 3: The owner passed away and the heir sells the home
- The original owner used the home as their main residence.
- The heir meets specific legal conditions.
✅ You may qualify.
❌ Who Cannot Use the Deduction?
Let’s look at cases where the deduction does not apply, even if you own property in Japan:
✖️ Case 1: You never lived in the home
- You bought it for investment.
- It was rented out or never used as a residence.
❌ Not eligible.
✖️ Case 2: You moved out more than 3 years ago
- The 3-year limit has passed.
❌ Not eligible.
✖️ Case 3: You sold it to a close relative
- If the buyer is a spouse, child, or parent, the deduction is disallowed.
❌ Not eligible.
✖️ Case 4: You didn’t file a tax return
- The deduction is only available if you file a Japanese tax return.
❌ Not eligible.
📋 Requirements at a Glance
Here’s a quick checklist:
| ✅ Requirement | 📝 Notes |
| Property was your main residence | Must prove actual use as a home |
| Sale is within 3 years of moving out | After 3 years, the deduction is lost |
| Buyer is not a relative | No spouses, children, parents, etc. |
| You file a tax return in Japan | Mandatory to claim the deduction |
| Appoint a tax representative | Required if you live overseas |
🔧 Tips to Make It Work
- 🗂 Keep documentation: Utility bills, residence certificate, and anything proving you lived there.
- 🛑 Avoid renting: Renting out the home disqualifies it from being “residential use.”
- 📆 Watch the clock: Time your sale within 3 years of moving out.
- 👨💼 Use a tax agent: Appoint a 納税管理人 (“nozei kanrinin”) to handle filing in Japan.
🤔 Not Sure If You Qualify?
Tax rules can be complex—especially across borders. If you’re uncertain, talk to a Japanese tax accountant who handles property and non-resident filings.
They can help you:
- File the correct forms
- Appoint a tax representative
- Claim a refund if too much tax was withheld
✨ Final Thoughts
The ¥30 million tax break is one of the most generous real estate benefits in Japan—but you have to meet the requirements to claim it.If you once lived in your Japanese home and plan to sell, check your timeline and documents now.
This deduction could save you millions of yen.
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