🔑 Key Takeaway: Japan places no exchange-control restrictions on moving your own rental income or sale proceeds abroad — the friction is tax and FX, not permission. Non-resident rental income is withheld at 20.42%; a property sale by a non-resident triggers buyer withholding of 10.21% of the price plus capital gains tax (15.315%/30.63% national, by holding period). File a Japanese tax return to reconcile, then repatriate efficiently with batched transfers and attention to the FX spread.
Buying is well covered; getting your money out is the part many foreign owners haven't thought through. Whether it's monthly rent or a lump-sum sale, this guide explains the taxes that apply, the withholding that surprises sellers, and how to move funds home efficiently in 2026.
It pairs with our guides on paying bills from abroad and sending money to Japan.
First, the Good News: No Exchange Controls
Japan does not restrict residents or non-residents from sending their own legitimately-owned funds abroad. There is no approval process to repatriate rental income or sale proceeds. The constraints you'll actually deal with are:
- Japanese tax owed before/while the money is yours to move
- Withholding mechanisms that hold back tax at source
- FX and transfer costs when converting yen and wiring it home
- Documentation banks may request for large transfers
Note: large cross-border movements may involve FEFTA-related reporting in some contexts, and your transaction when buying had its own Form 22 obligation. Repatriating proceeds is generally unrestricted, but keep clean records.
Repatriating Rental Income
The 20.42% non-resident withholding
When a non-resident earns rental income from Japanese property, tax is withheld at source:
- The standard mechanism withholds 20.42% of rent (income tax plus the 2.1% special reconstruction surtax).
- A key exception: when the tenant is an individual renting the property as their own (or a relative's) residence, the tenant is generally not required to withhold. Withholding is most relevant where the tenant is a corporation.
- Where withholding applies, the payer remits it to the tax office, and you receive the net amount.
File a return to deduct expenses and reclaim over-withholding
Withholding is on gross rent, but you're taxed on net rental profit. Filing a Japanese tax return (確定申告) lets you deduct:
- Management and repair-reserve fees, property management fees
- Depreciation (減価償却) — often a large non-cash deduction
- Property tax, insurance, tax-representative and accountant fees
- Loan interest, where applicable
The result is frequently a refund of over-withheld tax. A Japanese tax accountant (税理士) typically charges ¥50,000–¥150,000/year and usually pays for themselves. See our minpaku tax guide for non-resident owners for the short-term-rental angle and the property tax guide for the broader framework.
Then repatriate
Net rental income sitting in your Japanese account is freely transferable home. Batch it (e.g., quarterly) to reduce transfer costs and time conversions sensibly — see the FX section below.
Repatriating Sale Proceeds
Selling is where the largest sums — and the biggest surprises — occur.
Surprise 1 — The buyer's 10.21% withholding
When a non-resident sells Japanese real estate, the buyer is generally required to withhold 10.21% of the purchase price and remit it to the tax office as a prepayment against the seller's tax.
- A common exception: the withholding may not apply where the price is ¥100 million or less and the buyer (an individual) will use it as their own or a relative's residence.
- This is withholding on the gross price, not the gain — so you may have a large amount held back even if your actual capital gains tax is lower. You reconcile (and often reclaim part) via your tax return.
Surprise 2 — Capital gains tax (譲渡所得税)
Capital gains on the sale are taxed based on how long you owned the property (as of January 1 of the sale year):
| Holding period | Classification | National tax rate* |
|---|---|---|
| 5 years or less | Short-term (短期譲渡) | 30.63% |
| Over 5 years | Long-term (長期譲渡) | 15.315% |
*National income tax including the 2.1% surtax. Residents also face local inhabitant tax (住民税); for non-residents, local tax treatment differs — confirm with a tax accountant.
- The taxable gain is sale price − (acquisition cost + capital improvements + selling expenses), with acquisition cost reduced by accumulated depreciation for rental properties.
- The long-term threshold creates a strong incentive to hold past the 5-year mark before selling.
Reconcile, then move the money
After the sale, you file a return to settle capital gains tax and reconcile the 10.21% withheld. Once cleared, the net proceeds — often a large lump sum — are freely repatriable. For sums this size, FX strategy materially affects your take-home.
FX and Transfer Strategy for Large Sums
- The spread dominates on big transfers. On a ¥50M sale, a 1% worse exchange rate is ¥500,000 — far more than any wire fee. Compare the all-in rate, not the advertised fee.
- Consider specialist FX brokers / multi-currency accounts for large repatriations; they typically beat bank telegraphic transfer rates.
- Stage conversions if you have a view on rates, or convert at once to remove uncertainty — match this to your risk tolerance.
- Document the source of funds (sale contract, tax filings) — receiving banks abroad often ask for large inbound transfers.
- Time around tax deadlines so you retain enough yen to settle any remaining Japanese tax before moving everything home.
A Simple Sequence for Selling and Repatriating
- Confirm your holding period — selling just past 5 years can roughly halve the capital gains rate.
- Sell; buyer withholds 10.21% of price where applicable.
- File a Japanese tax return to compute capital gains tax and reconcile the withholding (refund if over-withheld).
- Settle outstanding Japanese tax/bills.
- Repatriate net proceeds via a cost-efficient FX route, with documentation.
Frequently Asked Questions
Can I freely take rental income and sale proceeds out of Japan?
Yes. Japan has no exchange controls restricting you from moving your own legitimately-owned funds abroad. The real constraints are Japanese tax (withholding and capital gains), FX and transfer costs, and documentation that receiving banks may request — not government permission.
How is non-resident rental income from Japan taxed?
Non-resident rental income is generally subject to 20.42% withholding at source (though individual tenants renting as a residence often need not withhold). Because withholding is on gross rent, filing a Japanese tax return to deduct expenses and depreciation frequently produces a refund. A tax accountant (税理士) typically handles this.
What is the 10.21% withholding when a foreigner sells property in Japan?
When a non-resident sells Japanese real estate, the buyer is generally required to withhold 10.21% of the purchase price as a prepayment of the seller's tax. An exception often applies when the price is ¥100 million or less and an individual buyer will use it as a residence. The seller reconciles the amount via a tax return, sometimes reclaiming part of it.
How much is capital gains tax on selling Japanese property?
It depends on holding period: property owned five years or less is taxed at about 30.63% (short-term), while property held over five years is taxed at about 15.315% (long-term) in national tax including the surtax. The gain is the sale price minus acquisition cost (less depreciation), improvements, and selling expenses. Local-tax treatment varies for non-residents.
What's the best way to repatriate a large sale proceed from Japan?
Prioritize the all-in exchange rate over the headline fee — on large sums the FX spread dwarfs wire fees. Specialist FX brokers or multi-currency accounts usually beat bank telegraphic transfers. Keep enough yen to settle remaining Japanese tax first, document the source of funds, and decide whether to convert at once or stage conversions based on your risk tolerance.
Related Articles
- Paying Japan Property Bills From Abroad →
- Japan Property Tax Guide for Foreign Investors →
- Minpaku Tax Guide for Non-Resident Owners →
- How to Send Money to Japan for Property Purchase →
- Non-Resident Property Management & Banking →
- FEFTA Form 22 Filing Guide →
Disclaimer
This article is for informational purposes only and does not constitute tax, legal, or financial advice. Withholding rates, capital gains rules, exemptions, and reporting requirements are complex, depend on individual circumstances and tax treaties, and are subject to change. Rates cited reflect general Japanese national tax (including the 2.1% special reconstruction surtax) as understood for 2026 and exclude local inhabitant tax, which varies for non-residents. Always consult a qualified Japanese tax accountant (税理士) and a cross-border tax advisor in your home country before acting.