Tax

YouTube clip : Capital gain tax in Japan

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When you buy a property and sell it in profit in the future, you are liable to

the capital gain tax of the Japanese government whether you are in

Japan or overseas country.

How does it work ?

How much is tax ?

Please find out more details in my video below.

Toshihiko Yamamoto
Real estate investing consultant and author.
Founder of Yamamoto Property Advisory in Tokyo.
International property Investment consultant and licensed
real estate broker (Japan).
He serves the foreign companies and individuals to buy and sell
the real estates in Japan as well as own homes.
He holds a Bachelor’s degree in Economics from
Osaka Prefecture University in Japan
and an MBA from Bond University in Australia

Toshihiko’s book, “The Savvy Foreign Investor’s Guide to Japanese Properties: How to Expertly Buy, Manage and Sell Real Estate in Japan”is now out on Amazon, iBooks (iTunes, Apple) and Google Play.
About the book 
Amazon.com Link

 

 

How the investment in a local city works ? : Opportunity to invest in center of Sapporo residential building. No down payment is needed

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(Night life Susukino in Sapporo)　　　　　　（Odoori koen)
No down payment is needed.
Remarkable opportunity in Sapporo is up for sale in Sapporo.
One of my business partners has come across a pretty good property in Sapporo in northern Japan.We don’t usually deal with a property in Sapporo.
However, as the project already has passed the provisional review by a premier Japanese bank, I am introducing it on his behalf.
Let’s find out how viable it is.
Oh, by the way, If you seek investment that can expect the appreciation of 20% over next 3 years,
Japan is not your destination. Please go and find a property in countries like Thailand or Vietnam.

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Real Case Study : How viable is buying a property to rent in Japan ? : How to get Financing and Tax implication

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(Yokohama city center)
Evaluating Real Estate as an investment
According to an article in USA today, single-family homes in large U.S. cities have generated returns of about 9% annually on average,
according to the study, which examined results from 1986 to 2014. Yes, there are risks in real estate investment.
Becoming a landlord isn’t without its risks — from bad tenants and periodic market slumps to changing tax laws and natural disasters
such as tsunami and earthquake.
The principle and the mechanism of the real estate investment in Japan is exactly the same
as other countries.In theory, you borrow the money at 3% from a bank and buy the real estate that generates 8% yield.
The spread (in this case 5%) is your profit.
You don’t need the rocket science.   But really ?  Let’s find out how viable it is.
In financial parlance, it is called ‘leveraging’.
Leveraging does not necessarily mean success.
Skeptics about the real estate investment in Japan where the population is
declining and rapidly ageing have lots of ammunition.
Leverage magnifies all of your returns and those returns aren’t always positive!
If you want to make investments where you can expect the appreciation of 20% over next 3 years,
Japan is not your destination.

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Cost to exit : Understanding the tax angles when you buy the property in Japan Part-3

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Successful investment strategy doesn’t simply mean buying and operating property.
Exit strategy is significantly important for the overall success.
You need to think about the exit strategy while you are acquiring property.
When you build the exit strategy, tax laws play the important role.
Today I am discussing the tax regulations when you sell your property outright.
Tax when you exit the property
The capital gain generated by selling your real estate is called transfer
income in Japan  (It is almost same as capital gain tax in US)
To calculate the capital gains or losses, take the sales price then deduct selling expenses,
from the amount realized. Then deduct the original cost of property, plus expenses deemed to
have increased its value, less claims which have notionally decreased its value.
Expenses deemed to have increased its value are capital improvements
(roof replacement, central air conditioning installation, rewiring, etc.), assessments for local improvements
(water connections, sidewalks, roads), casualty losses (restoration of damaged property), legal fees.
Expenses deemed to have decreased its value are depreciation, casualty or theft loss deductions
and insurance reimbursement, certain credits, exclusions and deductions.

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Cost to hold your property : Understanding the tax angles when you buy the property in Japan Part-2

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Previously I discussed the transaction taxes you have to pay at time of the acquisition of the property.
When you are holding the property (both land and building) in Japan, you need to pay two annual taxes whether you are making money out of the investment or not regardless of the purpose of the ownership.
One is fixed asset tax and second is city planning tax.
Land and houses and buildings on which the city planning tax is levied are the same as the objects of taxation for the fixed assets tax.
When the deal went through. the new owner’s first annual property-tax bill came to standard rate 1.7% of its assessed value.
Unlike London or New York, in Japan the same tax rate is applied to price band.

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Acquisition cost: Understanding the tax angles when you buy the property in Japan Part-1

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One of the principal rules of property investment is
that no property should cost more than it produces.
You obviously want to see the positive cash flow every month.
But from the tax management point of view, that is not the case.
When you are filing a tax return in March, you want to appear to be in red or break even.
The Japanese government in fact encourages investors to book the depreciation
that allows you post a deduction for the certain portion of the value of your property.
Tax code in Japan changes very frequently, almost every year.
I strongly advise that you should check with your broker or tax specialist
(tax accountant,  CPA) before you take a significant action.
Tax is the biggest cost in the property investing.
Tax management therefore is a key for successful real estate investors.
Today I am going to discuss the taxes that investors need to pay when they
buy the real estate in Japan.
The following discussion is based on the tax laws which are applicable
as of end 2017.Read more

Notorious inheritance tax: Is it high ? -Brief on Inheritance tax in Japan as of 2017-

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It comes to my attention that many foreign nationals who live in Japan
permanently or (semi-permamently) are
concerned about Japan’s inheritance tax.
I will give you some good guidance about it as follows.

1) Do we all have to pay
    the inheritance tax ?

There is growing concern about the inheritance tax in Japan. In 2013,
the Japanese government passed the bill and lowered the deductible amount
 for charging the inheritance tax　(hence effectively raised the tax rate).
The new law became effective from 2015.
However one statistics say the currently only
about 8 out 100 taxpayers in Japan are actually imposed the inheritance
tax so majority of usdo not really have to worry about it
unless you are very high net worth investors or entrepreneurs with
the net taxable asset which is well over 100 million yen or so.Read more