Moving to Japan as an Investor: Capital Gains and Overseas Tax

This article is part of Zagdim’s wiki series on tax for people moving to Japan. It is the series’ overview article, bringing together how gains on stocks, funds, and crypto, the sale of Japanese property, and overseas investments are taxed, before and after a move to Japan. It is written for investors anywhere overseas, whatever their home market, who hold stocks, funds, crypto, or overseas property and are considering relocating to Japan, as well as for foreign owners of Japanese property who are considering selling.

**Example (used throughout this article)**: Mr. Lin lives in Taipei, holds no Japanese nationality, and has never lived in Japan before. He holds stocks in his home market and also owns a rental apartment in Japan, and is planning to move to Japan long-term. Each section below applies the rule to his situation.

Which Income Is Taxed in Japan? It Starts With Your Residency Status

Start by checking which category you fall into under Japanese tax law, since the category decides which income you must report. Japan divides individuals into three categories:

Status	Who This Covers	Which Income Is Taxed in Japan
Resident other than a non-permanent resident	An individual who has a domicile in Japan, or who has had a residence in Japan for one year or more continuously up to now	All income, whether it arises inside or outside Japan
Non-permanent resident	A resident who does not hold Japanese nationality, and whose total domicile or residence in Japan over the past 10 years is five years or less	Non-foreign-source income, plus foreign-source income that is paid within Japan or remitted into Japan
Non-resident	An individual who does not qualify as a resident	In principle, only Japan-source income

“Foreign-source income” is income that arises outside Japan. “Non-foreign-source income” is any income other than foreign-source income.

So for a non-permanent resident, whether foreign-source income is remitted into Japan affects the scope of what gets taxed there.

Applying this to Mr. Lin: once he has a residence in Japan after moving, he becomes a resident. He does not hold Japanese nationality, and his total time living in Japan over the past 10 years is also five years or less, so he counts as a non-permanent resident.

How Are Capital Gains on Stocks, Funds, and Crypto Taxed After Moving to Japan?

Gains from selling stocks and funds are calculated and filed separately from other income. The key rules are:

Calculated in two categories: Gains from selling listed shares, etc., and gains from selling other shares are each calculated separately.
Filed separately: This is called separate self-assessment taxation (*shinkoku bunri kazei*) — calculating and filing the gain on sale separately from other income.
Which category a fund falls into: Units in a publicly offered investment trust — meaning the right to hold a publicly offered fund — count as listed shares, etc., except for certain stock investment trusts.
How the gain is calculated: Gain on selling listed shares, etc. = total sale proceeds − acquisition cost (purchase cost) − brokerage commission and other necessary expenses.

The listed rate for both listed shares, etc. and other shares is 15% income tax plus 5% resident tax, for a combined 20%. That 20% does not yet include the surtax.

The surtax is calculated on top of the “base income tax amount” (the income tax amount calculated under the relevant rules), at a set percentage:

Tax year 2026: 2.1% special reconstruction income tax.
From tax year 2027: 1.1% special reconstruction income tax plus 1% special defense income tax.

For the full filing details on stocks and funds, see Zagdim’s wiki article on how Japan’s capital gains tax works for stocks, funds, and crypto, and who must file.

Crypto assets: Gains from crypto asset (*angō shisan*) transactions are subject to income tax, and in principle are classified as miscellaneous income (*zatsu shotoku*), a category under Japan’s income tax law. As an exception, if the transactions are incidental to a source of business income or similar, they can instead be classified as business income.

When a crypto asset is sold for yen, the amount of income is calculated based on the sale price. For the fuller filing picture and the risks to watch for, see Zagdim’s wiki article on how Japan taxes crypto asset gains, miscellaneous income, and reporting risks.

What Tax Do Foreigners Pay When Selling Property in Japan?

Tax on selling Japanese real estate is calculated separately from business income and salary income — this is called separate taxation. The rate depends on how long the property was held, and owner-occupied homes have a separate special rule.

Working out the gain:

Gain on sale = sale proceeds − acquisition cost (purchase cost) − selling expenses.
When selling a building, the acquisition cost must first be reduced by an amount equivalent to depreciation for the holding period.
If the acquisition cost is unknown, or the actual acquisition cost is less than 5% of the sale price, 5% of the sale price can be used as an estimated cost (estimated acquisition cost, *gaisan shutokuhi*).

Then the holding period: this is judged as of January 1 of the year of sale.

Category	Holding Period as of January 1 of the Sale Year	Income Tax	Resident Tax
General long-term gain	More than 5 years	15%	5%
General short-term gain	5 years or less	30%	9%

Both are also subject to the surtax, calculated on the base income tax amount: 2.1% special reconstruction income tax for tax year 2026, and 1.1% special reconstruction income tax plus 1% special defense income tax from tax year 2027. Owner-occupied homes carry separate rates under their own special rule, not shown in the table above.

Applying this to Mr. Lin: when he eventually sells his Japanese apartment, he needs to check January 1 of the year of sale. More than five years of holding counts as long-term; five years or less counts as short-term.

When the seller is a non-resident, the buyer must withhold tax first. Withholding tax means the buyer deducts a portion of the payment up front and pays it to the tax authority.

Who must withhold: A buyer who purchases Japanese land or similar property from a non-resident or foreign corporation, and makes the payment within Japan.
How much: In principle, 10.21% of the price is withheld.
Tax components: The combined rate stays at 10.21%. For tax year 2026 this is income tax plus special reconstruction income tax; from tax year 2027 it also includes special defense income tax.
When withholding is not required: When an individual buys the property for their own residence and the price does not exceed JPY 100 million.

Owner-occupied homes can deduct JPY 30 million. When a home meets the conditions for the owner-occupied home (residential property) special rule, up to JPY 30 million can be deducted from the gain on sale, regardless of how long it was held. Every official condition has to be met item by item, though — it does not apply to every home.

For the full calculation and filing details on selling property, see Zagdim’s wiki article on what tax foreigners pay selling property in Japan and how the holding period affects it. If the property has already been placed in a trust before being sold, see Zagdim’s wiki article on putting Japanese property into a trust: registration, registration license tax, and a later sale.

Do I Need to Report Overseas Stock Gains in Japan?

It depends on your status:

Residents other than non-permanent residents: Gains from selling stocks overseas are, in principle, taxed in Japan the same way as a sale made in Japan.
Non-permanent residents: Follow the rule described earlier — whether the gain is taxed depends on whether it is paid within Japan or remitted into Japan.

Applying this to Mr. Lin: as a non-permanent resident, whether the gain from selling stocks in his home market is taxed depends on whether it is paid within Japan or remitted into Japan.

Foreign tax already paid can be credited. If a Japanese resident is liable for foreign income tax, that tax can be credited against Japanese income tax owed. There is a cap on how much can be credited, calculated from the proportion that adjusted foreign-source income represents of total income for the year.

Large overseas assets must be reported. The Statement of Overseas Assets (*kokugai zaisan chōsho*) is a document used to report overseas assets to the Japanese tax authority.

Who must file: Japanese residents other than non-permanent residents.
Threshold: Total overseas assets held as of December 31 of that year exceed JPY 50 million.
Deadline: By June 30 of the following year.
What to report: The type, quantity, and value of the assets, among other details.
Exception: Overseas inheritance acquired in the year inheritance begins is subject to a separate special exclusion.

For the fuller filing picture, see Zagdim’s wiki article on Japan tax residency and reporting overseas stock gains.

Before Moving to Japan, Should You Organize Your Investment Portfolio and Cost Records?

At minimum, keep your purchase cost and acquisition records on hand, because Japan calculates gain on sale by deducting cost and necessary expenses from proceeds:

Listed shares, etc.: Total sale proceeds − acquisition cost − brokerage commission and other necessary expenses.
Japanese land or buildings: Sale proceeds − acquisition cost − selling expenses; for a building, the acquisition cost used must already have depreciation deducted.

Which assets to sell first, and which cost documents to organize first, depends on an individual’s own assets and how funds are brought into Japan. For a fuller walk-through, see Zagdim’s wiki article on whether to organize your investment portfolio before moving to Japan, covering capital gains, cost records, and tax documents.

If You Later Leave Japan, Will Your Shares Be Taxed?

Not necessarily — only Japanese residents who meet specific conditions may be subject to this. It is called exit tax on departure from Japan (*kokugai tenshutsuji kazei*), meaning tax is calculated as if the assets had already been sold, even though they have not.

Condition: Holding covered assets worth JPY 100 million or more at the time of leaving Japan.
What is taxed: Income tax is charged on the unrealized gain (*fukumi-eki*) — the portion of an asset’s value that has gone up on paper but has not yet been locked in through a sale.
Note: Not everyone holding assets worth JPY 100 million or more is subject to this. The scope of covered assets, past residence period, and other conditions have to be checked item by item.

Applying this to Mr. Lin: when he eventually leaves Japan, he will need to confirm item by item whether he falls into this category, not just check his asset total.

Your status and the timing of a sale both affect which income is taxed in Japan, so it is worth clarifying your own situation before acting.

Frequently Asked Questions

I’m not a Japanese resident — will tax be withheld if I sell property in Japan? Possibly. When the buyer purchases Japanese land or similar property from a non-resident and makes the payment within Japan, it must, in principle, withhold 10.21% of the price. Withholding is not required when an individual buys the property for their own residence and the price does not exceed JPY 100 million.

Does the tax rate change depending on how long I’ve held Japanese property? Yes. The holding period is judged as of January 1 of the year of sale. More than five years counts as long-term, generally taxed at 15% income tax plus 5% resident tax. Five years or less counts as short-term, generally taxed at 30% income tax plus 9% resident tax. Both are also subject to the surtax.

Can I deduct JPY 30 million when selling my own home? Yes, when the home meets the conditions for the owner-occupied home special rule, you can deduct up to JPY 30 million from the gain on sale regardless of how long you held it, but every official condition has to be met item by item.

How much in overseas assets triggers a reporting requirement? For a Japanese resident other than a non-permanent resident, if total overseas assets held as of December 31 of that year exceed JPY 50 million, a Statement of Overseas Assets must be filed by June 30 of the following year.

Can foreign tax I already paid be credited against Japanese tax? Yes. A Japanese resident can credit foreign income tax against Japanese income tax, up to a cap calculated from the proportion that adjusted foreign-source income represents of total income for the year.

Glossary

**Resident (*kyojusha*)**: A resident for Japanese income tax purposes — an individual who has a domicile in Japan, or who has had a residence in Japan for one year or more continuously up to now.
**Non-permanent resident (*hieijūsha*)**: A resident who does not hold Japanese nationality, and whose domicile or residence in Japan over the past 10 years totals five years or less.
**Non-resident (*hikyojūsha*)**: An individual who does not qualify as a Japanese resident, taxed in principle only on Japan-source income.
**Separate self-assessment taxation (*shinkoku bunri kazei*)**: A method of taxation in which the gain on sale is calculated and filed separately from other income.
**Acquisition cost (*shutokuhi*)**: The purchase cost used in calculating gain on sale; for a building, an amount equivalent to depreciation must be deducted.
**Base income tax amount (*kijun shotokuzeigaku*)**: The income tax amount used as the base when calculating the surtax.
**Miscellaneous income (*zatsu shotoku*)**: A category of income under Japan’s income tax law; gains from crypto asset transactions are, in principle, classified here.
**Statement of Overseas Assets (*kokugai zaisan chōsho*)**: A document used to report the type, quantity, and value of overseas assets to the Japanese tax authority.
**Exit tax on departure from Japan (*kokugai tenshutsuji kazei*)**: A rule under which, when a qualifying resident leaves Japan, unrealized gains on covered assets are taxed as if those assets had already been sold.

About This Data

Facts in this article were checked as of October 21, 2026. Residency categories, the scope of taxable income, and the calculation of gain on sale and tax rates are drawn from the National Tax Agency’s Tax Answer Q&A and its crypto asset tax Q&A.
The breakdown of the 2027 surtax into 1.1% special reconstruction income tax and 1% special defense income tax comes from the National Tax Agency’s Tax Answer on futures transactions. Where this article applies that same breakdown to the rates for shares, land, and buildings, readers should still check the relevant tax-specific page again.
For the calculation of income from selling crypto assets, this article only states that the income amount is “calculated based on the sale price”; deductible items are to be added after a word-for-word check of the official source text. This article also does not yet cover how crypto asset income is reclassified once it reaches a certain amount.
This article does not cover how losses are treated between listed shares, etc. and other shares, or whether a loss on selling shares can offset a loss on selling land or buildings. The taxation principles for selling overseas property are still pending a word-for-word check and are not covered here; only overseas stock gains are explained.
“Mr. Lin” in the running example is a hypothetical scenario used only to illustrate how the rules apply, and does not represent a conclusion for any actual case.

Have a question about this guide? Leave a comment below, or ask Zagdim directly.

Life abroad? Ask Zagdim.

Your first stop for international property and global living.

Research and insights. Know what’s changing. Understand what matters.

Sources

Important Notice

This article is a general information summary and does not constitute tax or legal advice for any individual case. Facts were checked as of October 21, 2026. Rules in Japan, as well as in your home country, may be updated, so rely on the current published information of the relevant authorities and consult a qualified professional for your own circumstances.