If you own real estate in Japan as your home or business premises, an envelope arrives every spring from the municipality where the property is located. It is the fixed asset tax notice — the 納税通知書 (nōzei tsūchisho, “tax notice”). In most municipalities the documents are in Japanese only, which makes them hard to work through if you are not comfortable with the language. Below, we explain first how the system works, and then the Japanese terms that appear on the documents — keeping the Japanese as it appears, with translations and notes.
How fixed asset tax works
Fixed asset tax is levied by the municipality where the property is located on whoever owns the land or building as of January 1 each year. You do not assess it yourself: the municipality determines the assessed value, calculates the tax and notifies you (assessment by the municipality, 賦課課税). The standard rate is 1.4% of the taxable base; for property within an urbanization promotion area, city planning tax (at a rate of up to 0.3%) is added. Payment is generally divided into four instalments a year, though you can also pay in a single lump sum.
Reading the items on the notice
Next, the main items that appear on the tax notice and the enclosed 課税明細書 (kazei meisaisho, “tax assessment statement”).
- 所在地・地目・地積 (Location / Land category / Land area): where the taxed land is located, its category (residential land and so on) and its area. For buildings, the entry is 種類・構造・床面積 (Type / Structure / Floor area).
- 評価額 (Assessed value): the value determined by the municipality under the national fixed asset valuation standard. It is reviewed once every three years (the revaluation).
- 課税標準額 (Taxable base): the amount to which the tax rate is applied. Because of adjustments such as the special measure for residential land, it may differ from the assessed value.
- 税相当額・年税額 (Annual tax amount): the taxable base multiplied by the rate, with fixed asset tax and city planning tax shown side by side.
- 期別納付額・納期限 (Installment amount / Due date): the amount and deadline for each of the first through fourth instalments. You can pay with the enclosed payment slips (納付書) at banks and convenience stores, and a growing number of municipalities accept direct debit (口座振替) and credit card or other electronic payment.
How the tax changes year to year
The tax notice arrives in much the same format every year. Once you have been through what each item means, in later years you only need to follow how the amounts change. The tax can move in a revaluation year (every three years) or in a year when the use of the land or building has changed.
Puzzled by a tax notice?
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