Japan Income Tax Summary for Real Estate Rental Income

As individual tax season is just around the corner, I will explain real estate rental income on installments.

Overview

Calculation of Total Taxable Income

Real estate rental income is included in your taxable income as follows:

Taxable income amount = Real estate rental income + Income from employment + other income – Tax deductions

• Calculation of Real Estate Rental Income

The total taxable income from renting out real estate properties is calculated by subtracting the necessary expenses from the gross real estate rental income.

Real estate rental income amount = gross rental revenue – necessary expenses (depreciation, insurance, fixed asset tax etc.)

• Calculation of Income Tax

Income tax amount = taxable income amount × an applicable income tax rate – an applicable credit amount

Applicable income tax rates and applicable credit amounts are listed in the below rapid calculation table.

Rapid calculation table for Income tax:

Taxable income amount	Tax rate	Credit amount
Not exceeding JPY1,950,000	5％	―
Not exceeding JPY3,300,000	10％	JPY97,500
Not exceeding JPY6,950,000	20％	JPY427,500
Not exceeding JPY9,000,000	23％	JPY636,000
Not exceeding JPY18,000,000	33％	JPY1,536,000
Not exceeding JPY40,000,000	40％	JPY2,796,000
Amounts over JPY40,000,000	45％	JPY4,796,000

Local inhabitant tax rate is one rate 10%.

Above all.

Tokyo-Yokohama Kuwata Tax Firm