Selling Tokyo Property as a Foreigner: Process, Timeline and Reclaiming the 10.21% Withholding

TL;DR: Selling a Tokyo property as a foreigner runs through four stages — brokerage agreement, offer, contract, settlement — and typically takes a few months from listing to cash (directional, as of writing). You do not need to fly in: a power of attorney and a signature affidavit do the job. If you are a non-resident, the buyer usually withholds 10.21% of the gross price at settlement; that is a prepayment, and you reclaim the excess (or top up a shortfall) by filing a Japanese return the following spring. In the worked example below, a ¥75M long-term sale leaves roughly ¥4.2M to reclaim. Two dates drive the tax: January 1 of the sale year (the five-year line) and January 1 of the year after (your residence status). General information only — confirm with a licensed tax accountant (zeirishi) before you sign.

Seller’s market check (primary data, August 2026): 23-ward resale condo contracts fell to 1,265 (−20.6% year on year, the eighth straight monthly decline) and the price per ㎡ slipped 0.3% to ¥1,326,900 — the first year-on-year decline in 76 months. The average contract was ¥7,526万 (≈ ¥75.3M) for 55.86㎡, 26.86 years old, while Greater Tokyo listed inventory stood at 48,235 units, +8.2% year on year (REINS Market Watch, Aug 2026; more on our Tokyo 23 wards data page). Fewer deals and more competing listings make realistic pricing from day one matter more than it did a year ago. These are 23-ward averages, so ward and building mix move them.

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Before You List: Two Dates and a Paper Trail

Date one: January 1 of the year you sell. Capital gains tax (joto shotokuzei) splits at five years of ownership, and the five years are measured not to your sale date but to January 1 of the sale year. Short-term (tanki joto, five years or less) is roughly 39% of the taxable gain; long-term (choki joto) roughly 20% (both directional). The full rate breakdown, and how the sale fits with the other taxes you pay as an owner, lives in Property Taxes for Foreign Owners in Japan; this page only needs the trap. If you bought in March 2021 and sell in summer 2026, it feels like more than five years — but on January 1, 2026 you had held for under five, so the sale is short-term. Computed from the rule: a property bought in year X is long-term only for sales from January 1 of year X+6. If you are near the line, waiting for one more new year can roughly halve the tax.

Date two: January 1 of the year after the sale. The ~20% and ~39% figures are combined rates that include a local portion. Whether that local portion applies to you depends on your residence status on January 1 of the year after the sale, so an owner who has left Japan by then may be in a different position from one still living here. Confirm your own position with a zeirishi; how Japan decides whether you are a tax resident is explained in our remote-landlord guide.

The paper trail. The taxable gain is, simplified, sale price minus acquisition cost minus selling expenses. Acquisition cost is what you paid plus purchase-side costs, with the building portion reduced for depreciation (genka shokyaku) over the years you owned it — so your tax “cost” is usually lower than the price you paid. If you cannot prove acquisition cost, the tax office can default it to a small percentage of the sale price, which inflates the gain badly. Gather before you list:

• the original purchase contract and settlement statement;
• receipts for purchase-side costs (brokerage, registration, scrivener) and any renovation invoices;
• the title details — if the owner’s address registered on the title is an old Japanese address, ask the judicial scrivener early whether an address-change registration is needed before the transfer;
• your mortgage details, if any, so the lender’s payoff and release can be scheduled for settlement day;
• the building’s management details (monthly fees, repair reserve, any pending repair votes), which the buyer’s side will ask for.

If you are a non-resident, appoint your tax representative (nozei kanrinin) now, not after closing — see the foreigner setup checklist.

The Selling Process and Timeline, Start to Finish

Figure a few months from listing to cash in hand for a normal Tokyo apartment (directional, as of writing). A non-resident should add one more milestone: the withholding refund, which arrives only after the following spring’s filing.

Stage	What happens	What a foreign seller should have ready
1. Valuation and brokerage agreement	The agent prices the unit, you sign a brokerage agreement, and the listing goes to the industry network (REINS)	Ask whether the agent will also act for the buyer; confirm the fee math in writing
2. Offer and negotiation	The buyer submits a written purchase application; price, dates and conditions are agreed	Find out who the buyer is — an individual buying a home, or a company or investor. It decides the 10.21%
3. Contract (baibai keiyaku)	Contract signed; the buyer pays a deposit (tetsuke), typically around 10% (directional); stamp duty is due on the contract	Withholding terms written into the contract; remote-signing documents if you are abroad
4. Settlement and handover (kessai / hikiwatashi)	Balance paid, title transfer filed by the judicial scrivener (shiho shoshi), any mortgage released, keys handed over	Affidavit and power of attorney; bank details for the proceeds
5. Roughly one month after closing	The buyer remits the 10.21% to the tax office	Evidence the withholding was paid in your name
6. Following spring (Feb–Mar window, directional)	You file a Japanese tax return (kakutei shinkoku); refund or top-up	Tax representative and zeirishi engaged, documents assembled

What matters at each stage:

• Brokerage. The agent’s commission is capped at 3% of the price + ¥60,000 + consumption tax — the same legal ceiling you paid as a buyer — and is commonly paid half at contract and half at handover (timing varies by brokerage). If one firm represents both you and the buyer (ryote), it earns both fees; that is legal, but it shapes how hard the firm pushes on price. See how agent commission and ryote work.
• The offer. A buyer’s written purchase application (kaitsuke shoumeisho) signals intent but does not bind anyone; the contract does. If the buyer needs a mortgage, the contract usually carries a financing contingency (yuushi tokuyaku) that can unwind the sale if the loan is declined — weigh that when comparing offers.
• The contract. It is in Japanese and the Japanese text governs (how the sales contract works). Get the withholding addressed in writing: the buyer withholds 10.21%, remits it, and gives you or your tax representative a copy of the payment record. Your zeirishi needs that record to credit the withholding against your tax.
• Settlement. The scrivener verifies identity documents and files the transfer (what the shiho shoshi does). Fixed-asset tax is billed to whoever held title on January 1, so the year’s bill is customarily split by date between you and the buyer at closing.

Budget the seller-side costs so the net figure in your head is honest: brokerage, stamp duty on the contract, the scrivener’s fee for any work on your side (such as releasing a mortgage), and your zeirishi’s fee for the return.

Selling Remotely Without Flying to Tokyo

You do not need to be physically in Japan to sell; remote sales by owners living abroad are routine. What makes them work:

• A power of attorney (ininjo) authorizing a trusted representative or the shiho shoshi to act at settlement.
• A signature affidavit (sain shomeisho) from a notary in your country or a Japanese consulate, which substitutes for the registered seal (jitsuin), seal certificate and residence certificate a resident seller would use. Address-proof rules for the registry have tightened; the setup checklist covers the current affidavit-plus-passport requirement. Documents executed abroad are commonly notarized and then apostilled, and this is the step that quietly adds weeks — have the scrivener confirm the exact wording first, then start it the day you decide to sell.
• A plan for the proceeds. Decide early where the balance will be paid — a Japanese account in your name if you still hold one, or an arrangement agreed with the agent and scrivener — and what each overseas transfer will cost.
• A channel for the refund. Don’t close your Japanese bank account or let your tax representative’s appointment lapse until the reclaim has been paid; agree with your zeirishi in advance where the refund will go.
• Hand-off chores. Keys, utilities, the management company and the owners’ association all need notice; the agent or your property manager can usually handle these if asked.

The 10.21% Withholding: What the Buyer Holds Back

If you are a non-resident (hikyojusha) for tax purposes at the time of sale, the buyer is legally required to withhold 10.21% of the gross sale price — not of your gain — and remit it to the tax office within roughly one month of closing. This is a fixed statutory rate, and it is a collection device, not your final tax: even on a sale at a small profit or a loss, 10.21% of the whole price is parked with the tax authority.

The common exemption: no withholding when the buyer is an individual purchasing the property as a home for themselves or a relative, and the price is ¥100 million or less. Above that price, or when the buyer is a company or an investor, expect the withholding. Two consequences follow. First, the buyer’s profile changes your cash at closing, so ask about it during negotiation. Second, no withholding does not mean no tax — you still file a Japanese return for the sale and pay what is due.

Worked Example: A ¥75 Million Sale, Withholding vs. Actual Tax

Every input below is an illustrative assumption, not a quote or advice; the arithmetic is computed. The ¥75M price is close to REINS’s August 2026 average 23-ward resale contract of ¥7,526万 (≈ ¥75.3M).

• Sale price: ¥75,000,000 (assumption).
• Acquisition cost after building depreciation: ¥55,000,000 (assumption, held equal in both columns for comparability — in reality a shorter hold means less depreciation).
• Brokerage at the statutory cap: (3% × ¥75,000,000 + ¥60,000) × 1.10 consumption tax = ¥2,541,000.
• Other selling costs (stamp duty and the like) are left out to keep the arithmetic visible.
• Tax rates: this page’s rough combined rates, ~20% long-term and ~39% short-term.

	Long-term (held > 5 years at Jan 1)	Short-term (5 years or less)
Sale price	¥75,000,000	¥75,000,000
Less acquisition cost (assumed)	−¥55,000,000	−¥55,000,000
Less brokerage at cap, incl. tax	−¥2,541,000	−¥2,541,000
Taxable gain	¥17,459,000	¥17,459,000
Tax at rough combined rate	~20% → ¥3,491,800	~39% → ¥6,809,010
Buyer withholding, 10.21% × ¥75,000,000	¥7,657,500	¥7,657,500
Approximate refund after filing	≈ ¥4,165,700	≈ ¥848,490

How to read it:

• Cash at closing. The buyer pays ¥67,342,500 in total (price less the withholding); after the full brokerage fee, ¥64,801,500 reaches you, before stamp duty, scrivener fees and any mortgage payoff. The refund comes only after next spring’s return is processed.
• Both cases are refunds here, because 10.21% of the price exceeds the tax on a gain of this size. Computed break-even on a ¥75M sale: the withholding falls short — and you top up — only if the taxable gain exceeds about ¥19.6M at ~39%, or about ¥38.3M at ~20%.
• A loss means the whole ¥7,657,500 is reclaimable by filing, since there is no tax on a gain that does not exist.
• The local portion. The ~20% and ~39% figures include a local portion, and whether it applies depends on your residence status on January 1 of the year after the sale. If it does not apply to you, the tax is lower and the refund larger than shown. Confirm with a zeirishi; the full rates are in our property tax guide.

Reclaiming the Withholding: The Filing, Step by Step

1. Before closing: appoint the nozei kanrinin in writing and file the appointment with the tax office; engage a zeirishi who handles non-residents, ideally one who can talk to your accountant at home.
2. At closing: collect the sale contract, the settlement statement, the brokerage invoices, and evidence that the buyer remitted the 10.21% in your name.
3. Build the acquisition cost: the purchase contract, purchase-side receipts, and the depreciation computation for the building portion.
4. File the return (kakutei shinkoku) in the year after the sale — the window has historically run mid-February to mid-March (directional, as of writing). The return computes the real tax on the gain and credits the 10.21% already withheld.
5. Collect the refund or pay the top-up: the refund is paid after the return is processed, to the destination agreed with your zeirishi; a shortfall is paid by the filing deadline.
6. Report it at home: your country of residence may also tax the gain, with relief usually coming through a tax treaty and foreign tax credits. That is a two-country question for licensed advisers in both.

The expensive failure is not filing at all. Sellers who leave Japan and forget the return effectively hand the tax office the entire withholding — in the long-term example above, about ¥4.2M that was theirs to reclaim.

What This Means For Your Next Move

Time the sale around the January 1 five-year line, build the paper trail before you list so your gain is not overstated, and find out early whether your buyer will have to withhold. If you are a non-resident, start the affidavit and power of attorney the day you decide to sell, write the withholding mechanics into the contract, keep your tax representative and a refund channel in place, and file the following spring. Treat the 10.21% as a temporary cash hit you will usually reclaim in large part — not as the tax itself.

This article is general information, not tax, legal or investment advice. Your residence status, treaty position and depreciation history all change the math, so confirm with a licensed zeirishi before you act.

For a straight read on timing, likely net proceeds and how a remote sale runs, talk to us — and when it’s time to list, we can introduce you to licensed agents. Run rough numbers first with our tools, and if you hold more than one property, compare wards to decide what to sell and what to hold.

Sources: REINS Market Watch, August 2026, National Tax Agency of Japan (NTA) — English, Japan External Trade Organization (JETRO) — Investing in Japan, Ministry of Land, Infrastructure, Transport and Tourism (MLIT)