Airbnb hosting in Japan comes with tax obligations that can be complex for foreign property owners. Here’s a breakdown of the key taxes and how to manage them.
Types of Taxes for Airbnb Hosts
Income Tax:
Who Pays? All Airbnb earnings must be declared as taxable income.
Rates:Â Japan has a progressive tax system, with rates ranging from 5% to 45%, depending on your income bracket.
Local Inhabitant Tax:
Who Pays? Hosts with income in Japan.
Rates:Â Typically 10% of taxable income.
Fixed Asset Tax:
Who Pays? Property owners, regardless of whether the property is rented.
Rates:Â Calculated annually based on property value.
Consumption Tax:
Who Pays? Hosts earning over 10 million yen annually may need to charge and remit consumption tax (currently 10%).
Tax Deductions for Airbnb Hosts
Allowable Deductions:
Maintenance and repair costs.
Utility bills and cleaning expenses.
Property management fees.
Maximizing Deductions: Keep detailed records of all expenses related to your Airbnb business to lower your taxable income.
How to File Taxes in Japan
Register for a Tax ID: Foreigners must obtain a tax number if they don’t already have one.
Work with a Tax Professional: Navigating Japanese tax laws can be challenging, so consider hiring an accountant familiar with foreign property owner needs.
How Old Houses Japan Can Help
We connect you with trusted tax professionals who specialize in assisting Airbnb hosts, ensuring you meet your obligations while maximizing your deductions.