Japan's property tax secret sauce

In Japan, the fixed-asset tax is set at 1.4% of the assessed value, which is usually much lower than market price. Add a city-planning tax up to 0.3% in urban areas, and you might start to see why carrying costs are low. Residential land can get an assessed-value reduction down to 1/6, encouraging owners to keep old houses. One-off purchase costs include registration tax, acquisition tax, and stamp duty.

Since April 2024, inheriting real estate in Japan comes with a deadline. Heirs must register inherited property within 3 years, or face fines up to ¥100,000. This move targets Japan's 'owner-unknown land' issue, where land's registered owner died generations ago. A new scheme also allows heirs to surrender unwanted rural land to the state for a fee.

In Tokyo's 23 wards, condo prices show an age-related trend. Condos under 10 years old go for ¥1.36M/m², but once they hit 30 years, prices drop sharply to ¥783k/m², a 35% decrease from 20-year-old units. Buildings predating 1981 seismic standards and tighter financing likely drive this cliff.