
Tokyo real estate is often marketed with attractive gross yields—but these numbers don’t tell the full story.
To truly understand your investment performance, you need to look at the hidden costs that impact your net yield.
In this guide, we break down the key expenses every investor should be aware of before purchasing property in Tokyo.
Property-related taxes in Japan fall into three categories:
Real estate acquisition tax
Registration & license tax
Stamp duty
Consumption tax (on buildings only)
Fixed asset tax
City planning tax
Income tax on rental income
⚠️ For non-resident owners:
Rental income may be subject to 20.42% withholding tax (often partially refundable after filing taxes).
Capital gains tax:
~30% if sold within 5 years
~15% if held over 5 years
If you use a property manager (common for overseas investors), expect:
Around 3–5% of monthly rent + tax
This typically covers:
Tenant communication
Rent collection
Administrative work
For apartments (mansions), you’ll pay monthly:
Building management fees
Repair reserve fund
These are mandatory and used for:
Maintenance of common areas
Long-term building repairs
New lease fee: ~1 month’s rent
AD (Advertising) fee: 0.5–2 months’ rent (optional but common)
Often 1 month’s rent (shared between owner and management)
When a tenant moves out:
You’ll need to restore the unit for the next tenant
Tenants cover damages, but:
General wear and tear = owner’s responsibility
As the owner, you are responsible for:
Repairing or replacing appliances
Fixing equipment during tenancy
👉 Newer properties tend to have lower maintenance costs.
Air conditioning installation (essential in Japan)
Basic fixtures if needed
If you live outside Japan:
Wire transfer fees for sending rental income abroad
Difficulty opening a local bank account
💡 Many owners choose quarterly transfers to reduce fees.
Parking spaces may come with monthly fees
Bicycle parking is often recommended for tenants
Fire insurance (required)
Earthquake insurance (optional but recommended)
While a property may show a 5–6% gross yield, your net yield can be significantly lower after expenses.
Understanding these costs upfront helps you:
Avoid unexpected surprises
Make better investment decisions
Accurately evaluate returns
Tokyo remains one of the most stable real estate markets in the world—but successful investing requires looking beyond the headline numbers.
By factoring in taxes, management fees, and ongoing costs, you can gain a realistic view of your investment performance.
If you’re considering investing in Tokyo real estate, I provide bilingual support and tailored guidance—helping you evaluate properties not just on price, but on long-term value and performance.
👉 Feel free to reach out for a consultation.