Frequently Asked Questions
Japanese Property — Personally or Through a Company
There is no general answer. Online you mostly find tax-rate comparisons ending in “above ¥X, use a company”. That comparison only holds when a particular set of assumptions holds. In practice what moves the answer is not the rate — it is the exit and the recipient.
So which is better?
It is not decided until five axes are on the table: holding period, exit, who inherits, country of residence, and financing. The practical answer is that a rate comparison alone cannot decide it.
| Axis | What it drives |
|---|---|
| Holding period | Short-term turnover or multi-generational holding. A company’s running cost compounds the longer you hold |
| Exit | Sell, hold for income, or pass on. A different exit changes the right answer |
| Who inherits | Resident or non-resident. For a non-resident, the form of the interest matters more than the property itself |
| Country of residence | Whether the owner is a Japanese resident. Taxable perimeter and filing duties change |
| Financing | Borrowing on personal standing or through a company. Funding terms sometimes dictate the structure |
“Above ¥X, use a company” is only meaningful where the exit is a sale, the recipient is a Japanese resident, and financing is available. Remove one assumption and the conclusion moves.
What extra burden comes with a company?
Recurring costs that arise every period simply from holding — the part that never appears in the comparison made at acquisition.
- Annual accounts and tax filings, and the administration around them
- The per-capita levy of corporate inhabitant tax, which is due even with no income
- Procedures each time a registered particular changes
- Tax on getting money back out to the individual — dividends, director’s remuneration and so on are each treated differently
That last point is the one most often missed. Hold through a company and the asset belongs to the company. When you want it personally, you cannot simply take it out.
Which is easier to deal with for succession?
With several recipients, converting the property into interests is easier to divide. But “easier to divide” and “no disputes” are different things.
Inheriting property into co-ownership means an alteration or disposal — a sale, for instance — needs all co-owners to agree (Civil Code art. 251), while acts of management including letting are decided by a majority of the co-ownership interests (art. 252), within the statutory lease periods that article allows. A long lease or a rebuild can shift to the alteration side depending on its nature. Either way, the next generation fragments it further. Going through a company turns it into interests that divide cleanly — but then voting rights split and decisions stall. The question is not which of the two, but whether voting rights and economic interest can be designed apart from each other.
Reference: 民法 第251条・第252条（e-Gov 法令検索）
What should a non-resident owner watch for?
Whether a tax agent is required, how withholding applies, and — when succession occurs — which country’s law governs the division.
The last is the one that gets missed. Even for Japanese property, the governing law for division starts from the decedent’s nationality and can come back to Japanese law by renvoi. Taxation and governing law are separate axes; you cannot design by looking at only one. We set this out on a separate page.
At what figure does a company become worthwhile?
We do not publish that figure. It moves with individual circumstances, and estimating tax falls under Article 2 of the Certified Tax Accountant Act.
This page goes as far as explaining the general axes. Tax conclusions, the scope of taxation, filing obligations under your particular facts — and the choice of structure that follows from them — are confirmed and handled by our partner licensed tax accountants. If a number is all you need, going straight to a tax accountant will be faster.
What this page does not cover
We do not produce tax estimates, break-even calculations or returns — those fall under Article 2 of the Certified Tax Accountant Act and are handled by our partner licensed tax accountants. We also do not act as property broker, handle registration, or manage lettings. What we work on is the structure: where the holding entity sits, how voting rights and economic interest are separated, and how the exit and the succession connect.
Relevant legislation
Related services and questions
- Corporate Structuring
- Financial Architecture Diagnostics
- Which country’s law governs a cross-border inheritance
- The inheritance tax “10-year rule”
Get in touch
Restructuring after acquisition costs money. The most useful conversation happens before you buy. ceo@seisei.tokyo
SEISEI provides financial and management consulting. It does not constitute tax representation, preparation of tax documents, or tax consultation as defined in Article 2 of Japan’s Certified Tax Accountant Act. Filings and tax computations are handled by partner licensed tax accountants (zeirishi).