You bought a condo in Tokyo. Maybe you live in it. Maybe you rent it out. Either way, the question matters before you sign: how do you sell it later?
Foreign owners face the same legal market as Japanese owners. The friction is operational. Tax withholding, remote signing, currency timing, and buyer perception all shift the math. This article walks through the exit mechanics so you can plan backwards from the sale.
At RE : public, we see the same patterns repeat. Owners who plan the exit on day one tend to keep more of the proceeds. Owners who improvise lose months and basis points.
The structural facts you need to accept
Japanese condos (マンション) are not US or European condos in disguise. The resale dynamics are different.
- Building age dominates pricing. Reinforced concrete buildings depreciate on a known curve. The Ministry of Land, Infrastructure, Transport and Tourism (国土交通省) publishes transaction data via the Real Estate Information Library (不動産情報ライブラリ). Use it.
- The 1981 new earthquake standard (新耐震基準) is a hard line. Buildings before June 1981 face buyer financing limits and insurance issues. If your unit sits on the wrong side, plan for a smaller buyer pool.
- Management fees and repair reserves (管理費・修繕積立金) are scrutinized. Buyers and their banks read the long-term repair plan (長期修繕計画). A weak reserve fund is a price drag.
- Land share (敷地権) matters in central wards. In Minato (港区), Chiyoda (千代田区), and Shibuya (渋谷区), land share supports resale even as the building ages.
These are not opinions. They are tendencies visible in transaction data over the last 15 years.
Tax: the part most foreign sellers underestimate
If you are a non-resident of Japan for tax purposes when you sell, the buyer is generally required to withhold 10.21% of the gross sale price and remit it to the National Tax Agency (国税庁). This is not the final tax. It is a prepayment against your capital gains liability.
Two exceptions reduce the withholding to zero:
- The buyer is an individual purchasing the property as their own residence or that of a relative, and
- The sale price is 100 million yen or less.
Above 100 million yen, or to a corporate buyer, withholding applies regardless of buyer intent.
Capital gains rates
Capital gains on Japanese real estate held by a non-resident:
- Short-term (held 5 years or less as of January 1 of the sale year): roughly 30.63% national + 9% local — the local portion typically does not apply to non-residents, but confirm with a licensed tax accountant (税理士).
- Long-term (held more than 5 years): roughly 15.315% national.
The 5-year clock is counted from January 1 of the year after acquisition, not from the purchase date itself. A unit bought in March 2020 does not become long-term until January 1, 2026. Selling in late 2025 versus early 2026 can change your tax bill by 15 percentage points. This is one of the largest controllable variables in the exit.
Other transaction taxes and costs
Expect to pay:
- Brokerage commission: up to 3% + 60,000 yen + consumption tax (消費税), per side.
- Stamp duty (印紙税) on the sale contract: scaled to price.
- Registration release of any mortgage: small but requires a judicial scrivener (司法書士).
- Settlement of unpaid management fees and property tax (固定資産税): prorated to closing.
A reasonable analysis result for a 80-million-yen sale: total seller costs land between 3.5% and 4.5% of gross price, before capital gains tax.
The 5-year holding question
This is the single most-asked question we get from foreign sellers. Here is the framework.
If you are inside the short-term window and the price has appreciated meaningfully, the additional tax from selling early can exceed the carrying cost of waiting. A worked example:
- Purchase price: 70M yen, January 2021
- Current market reference estimate: 90M yen, mid-2025
- Gross gain: ~20M yen
- Short-term tax (~30.63%): ~6.1M yen
- Long-term tax (~15.315%) if you wait until January 2026: ~3.1M yen
- Difference: ~3M yen
- Carrying cost for ~6 extra months (interest, fees, vacancy risk): often well below 3M yen
The math usually favors waiting. But not always. Currency moves, rate changes, and building-specific events (large repair assessments, neighborhood supply shocks) can tilt it. Run the numbers, do not guess.
Selling remotely: the operational playbook
Most foreign owners we work with are not in Japan when they sell. The process works, but it requires preparation.
1. Power of attorney (委任状)
You can appoint a representative — a judicial scrivener, a tax accountant, or a trusted individual — to sign closing documents on your behalf. The power of attorney must be specific to the transaction and properly notarized. If you are abroad, your local Japanese embassy or consulate can issue a signature certification (署名証明) that substitutes for the Japanese personal seal certificate (印鑑証明書).
Plan 4 to 8 weeks for this paperwork. Banks and judicial scriveners are conservative.
2. Tax representative (納税管理人)
If you do not have a Japanese address, you must appoint a tax representative before filing. They handle correspondence with the tax office (税務署), submit your final capital gains return by March 15 of the following year, and reconcile the 10.21% withholding against your actual liability. Refunds, when due, are paid to a designated account.
3. Bank account for proceeds
Closing the Japanese bank account before the sale completes is a common, painful mistake. You need a yen account to:
- Receive the buyer's wire at settlement
- Receive any tax refund the following year
- Pay the brokerage and scrivener fees
Keep the account open until at least the year after sale.
4. Currency timing
Yen-to-home-currency conversion is its own decision. The Bank of Japan (日本銀行) policy stance, US rate path, and your home currency's trajectory all matter. Some sellers split the conversion across 3 to 6 months to reduce timing risk. This is not a recommendation — it is a tendency we observe among sellers who want to avoid single-day exposure.
Pricing the unit: ignore the listing price
Japanese listing prices (売出価格) are negotiation anchors, not market prices. The signal you want is transacted price (成約価格).
Sources for transacted data:
- Real Estate Information Library (不動産情報ライブラリ) — government-published transaction data, anonymized but useful at the building level for larger complexes.
- REINS (レインズ) — the broker MLS. Your listing broker can pull transaction history for your building and comparable buildings. Ask for it. In writing.
- Building-specific history — for large condos (50+ units), 2 to 4 transactions per year is normal. The pattern matters more than any single data point.
Beware these traps:
- Listing-price aggregators (the big portals) overstate the market. Sellers list high, then cut.
- Single-comp anchoring. One renovated unit on a high floor is not your reference estimate.
- Stale comps. Tokyo central condo prices moved sharply between 2022 and 2024. A 2022 comp is a different market.
A second-opinion analysis — what we do at RE : public — looks at the transaction distribution, not one number. The result is a range with risk factors, not a single figure.
Choosing a brokerage: the structural conflict
Japanese real estate brokerage allows dual agency (両手仲介) — the same broker representing buyer and seller and collecting commission from both. This is legal. It is also a conflict.
Two practical patterns:
- Property hoarding (囲い込み): a brokerage delays sharing your listing with other agents to keep both sides of the commission. Your unit sits while a "matching buyer" is sought internally. The Ministry of Land, Infrastructure, Transport and Tourism has tightened reporting rules, but the behavior persists.
- Price coaching downward: an agent suggesting a quick price cut to close the deal — for either side.
Defenses:
- Ask for a written REINS registration confirmation (登録証明書) within 5 business days of signing the listing agreement. This is your right.
- Request weekly activity reports — viewing requests, broker inquiries, portal click data.
- Consider an exclusive (専属専任媒介) versus non-exclusive (一般媒介) structure based on your timeline. Exclusive agreements give the broker incentive to invest in marketing; non-exclusive agreements reduce hoarding risk but spread accountability.
There is no universally correct answer. There is a correct answer for your specific situation.
Foreign-buyer demand on the buy side
When you sell, your buyer pool may include other foreigners. This is more relevant in central Tokyo than elsewhere.
- Cash buyers from Greater China, Singapore, and Hong Kong have been active in Minato, Chuo (中央区), and Shibuya since 2022.
- US and European buyers more often need Japanese mortgage financing, which limits the pool to permanent residents or specific bank programs.
- Corporate buyers (small Japanese real estate funds, listed J-REITs for larger units) appear above ~150M yen.
A unit that appeals to multiple buyer segments sells faster and at tighter spreads to the reference estimate. A unit that appeals to only one segment carries more timing risk.
A pre-sale checklist
Roughly 6 months before listing:
- Confirm your tax residency status and the 5-year holding date
- Pull the building's repair reserve status and any planned large-scale repair (大規模修繕)
- Settle any management fee arrears
- Decide on tax representative and judicial scrivener
- Pull REINS transaction history for your building
- Get an independent reference estimate, not just a brokerage's listing-price proposal
- Check that your Japanese bank account, hanko (印鑑), and identification documents are current
Roughly 2 months before listing:
- Sign the brokerage agreement with clear reporting requirements
- Prepare power of attorney if selling remotely
- Stage or repair only where transaction data shows a return — most cosmetic work does not pay back
A note on what we do
RE : public provides a second-opinion reference estimate and structural risk analysis for foreign buyers and sellers in Japan. We are not a brokerage. We do not list your property. We read the data so you can negotiate with your broker — and your buyer — from a known position.
The exit is where most of the wealth in a real estate transaction is decided. Treat it as a project, not a moment.
This is not investment advice. The final decision is yours.