Quick Fact: Japan has a tax treaty with Australian, which may prevent double taxation.
If you’re an Australian considering buying property in Japan, you’ll find the process more straightforward than you might expect. Australians can purchase real estate in Japan with the same ownership rights as Japanese citizens—no visa or residency required. The Australia-Japan Tax Treaty provides significant benefits, and the current AUD/JPY exchange rate creates opportunities for savvy investors.
This guide covers everything Australian buyers need to know: ATO tax obligations, the foreign tax offset, currency transfer strategies, and the step-by-step purchasing process.
Last Updated: February 2026
Can Australians Buy Property in Japan?
Yes, Australians can buy property in Japan with virtually no restrictions. Unlike many Asian countries that limit foreign ownership, Japan grants full freehold property rights to foreign nationals.
Key points for Australian buyers:
- No visa or residency requirement to purchase property
- Same ownership rights as Japanese citizens for land and buildings
- No limit on the number of properties you can own
- No government approval required for residential purchases (with limited exceptions for sensitive areas)
According to Wise Australia, “Australians can buy property in Japan with more or less no restrictions. You can buy a home in Japan as a resident or non-resident, although the process can be a bit trickier for non-residents, particularly if you’re hoping to finance your purchase with a local mortgage.”
Pro Tip: While you don’t need to visit Japan to purchase property, plan at least one trip for contract signing. Japanese law requires identity verification at the time of contract execution, and being present smooths the process considerably.
Australia-Japan Tax Treaty Benefits for Property Investors
The Australia-Japan Double Tax Treaty, signed in 2008 and modified by the Multilateral Convention in 2019, is crucial for Australian property investors in Japan.
Key Treaty Benefits
| Benefit | How It Works |
|---|---|
| Prevention of double taxation | Income taxed in Japan qualifies for relief in Australia |
| Foreign tax credit mechanism | Tax paid in Japan can offset your Australian tax liability |
| Clear property income rules | Japan has primary taxing rights on Japanese property income |
| Capital gains alignment | CGT treatment follows OECD standards |
Under the treaty, Japan has the primary right to tax income from Japanese property. Australia then provides a foreign income tax offset for tax already paid in Japan, preventing you from paying tax twice on the same income.
According to Odin Tax: “The Australia-Japan double tax treaty prevents taxes from obstructing trade and economic exchange, and provides clear tax rules and limits for Japanese or Australian residents receiving income in the other country.”
For the official treaty text, refer to the Ministry of Finance Japan - Australia Tax Treaty.
Currency Considerations: AUD to JPY for Buying Property in Japan as an Australian
Exchange rates significantly impact your total investment cost. As of late 2025, the AUD trades at approximately 104-105 JPY per dollar, above the 5-year average of 93.94 JPY per AUD.
AUD/JPY Historical Context
| Period | Rate Range |
|---|---|
| Current (late 2025) | 104-105 JPY/AUD |
| 5-year average | 93.94 JPY/AUD |
| 5-year range | 90-106 JPY/AUD |
This means Australian buyers currently get more yen for their dollars compared to historical averages—potentially 10-15% more purchasing power.
Smart Transfer Strategies
Pro Tip: Never use your Australian bank’s international transfer service for property purchases. Bank wire transfers typically charge 2-4% above the mid-market rate. For a ¥40 million property (approximately A$380,000), that’s A$7,600-15,200 in hidden fees.
Instead, consider:
- Wise (formerly TransferWise) - Mid-market rates with transparent fees
- OFX - Better rates for large transfers over A$40,000
- Set rate alerts - Many services let you lock in favorable rates when they occur
Using mid-market rate services versus bank rates can save 1-3% on large transfers—potentially tens of thousands of dollars on a property purchase.
Australian Tax Obligations on Japanese Property
As an Australian tax resident, you must declare worldwide income including Japanese rental income on your Australian tax return. This is non-negotiable.
ATO Requirement: “As an Australian resident, you must declare all foreign income earned anywhere in the world on your Australian tax return, including rental income from overseas properties.” — Australian Taxation Office
Rental Income Reporting
When you earn rental income from Japanese property:
- Report gross rental income in Australian dollars (use the average exchange rate for the income period)
- Claim allowable deductions - property management fees, repairs, insurance, depreciation
- Claim foreign income tax offset - for tax paid in Japan on the same income
Capital Gains Tax Implications
Selling Japanese property triggers potential CGT in both countries:
In Japan:
- Non-residents pay approximately 15.315% on long-term gains (property held over 5 years)
- Short-term gains (under 5 years) taxed at approximately 30.63%
In Australia:
- Include the capital gain in your assessable income
- 50% CGT discount applies if held more than 12 months
- Claim foreign income tax offset for CGT paid in Japan
Pro Tip: Keep meticulous records from purchase date. You’ll need documentation of purchase costs, improvements, and all expenses in both currencies. The ATO requires records for at least 5 years after selling.
Foreign Income Tax Offset
The foreign income tax offset prevents double taxation but requires:
- Evidence of tax paid in Japan (official tax receipts)
- Calculation of offset limit (the lesser of tax paid in Japan or Australian tax on that income)
- Proper reporting on your Australian tax return
For detailed guidance, see the Australian Taxation Office - Foreign Income page.
Step-by-Step Property Buying Process for Australians
Step 1: Research and Budget Planning
Research Japanese markets and establish your budget. Factor in:
- Property price
- Transaction costs (8-12% of purchase price)
- AUD/JPY exchange rate fluctuations
- Ongoing holding costs
Popular investment destinations include Tokyo for capital appreciation and Osaka for higher rental yields.
Step 2: Find a Bilingual Real Estate Agent
Work with an agent experienced with Australian buyers. They’ll:
- Access Japanese property listings (most aren’t on international platforms)
- Negotiate on your behalf
- Navigate Japanese procedures and paperwork
Step 3: Property Viewings
View properties in person or virtually. Key considerations:
- Building earthquake resistance (post-1981 construction uses modern codes)
- Location and transport access
- Management logistics for remote ownership
Step 4: Submit Letter of Intent
Signal serious interest with a purchase application. You may need to provide an earnest money deposit (typically 10-20%) to secure the property.
Step 5: Prepare Documentation
As a non-resident Australian, you’ll need:
- Passport copy
- Australian address verification
- Notarized signature documentation (certified by notary public or Australian embassy/consulate in Japan)
Step 6: Important Matters Explanation
Review the Juyo Jiko Setsumeisho (重要事項説明書) - the mandatory disclosure document covering all property details. Request a bilingual version.
Step 7: Sign Purchase Agreement
Execute the sales contract and pay the deposit (typically 5-10%). Physical presence in Japan is usually required for identity verification.
Step 8: Transfer Funds
Transfer your purchase funds from Australia to Japan. For transfers over ¥30 million, additional AML compliance documentation may be required.
Step 9: Settlement
Pay the remaining balance plus taxes and fees. A judicial scrivener (shiho shoshi) registers the ownership transfer at the Legal Affairs Bureau.
Step 10: Post-Purchase Administration
After purchasing:
- Submit notification to Bank of Japan within 20 days
- Appoint a Japanese tax representative
- Arrange property management if renting
- Understand ATO reporting requirements
Costs and Fees When Buying Property in Japan
Budget 8-12% of the purchase price for transaction costs. For a ¥40 million property, expect total costs of approximately ¥43.5-44 million.
Transaction Cost Breakdown
| Cost Type | Rate/Amount |
|---|---|
| Agent commission | 3% + ¥60,000 + 10% consumption tax (properties over ¥4M) |
| Registration & license tax (land) | 1.5% of assessed value |
| Registration & license tax (building) | 2.0% of assessed value |
| Real estate acquisition tax (land) | 1.5% of assessed value |
| Real estate acquisition tax (building) | 2% for residential |
| Stamp duty | ¥5,000 - ¥480,000 |
| Consumption tax | 10% on building value only |
| Judicial scrivener fees | ¥50,000 - ¥200,000 |
Example: ¥40 Million Property in Australian Dollars
At current exchange rates (approximately 105 JPY/AUD):
| Item | JPY | AUD |
|---|---|---|
| Purchase price | ¥40,000,000 | A$380,952 |
| Transaction costs (10%) | ¥4,000,000 | A$38,095 |
| Total investment | ¥44,000,000 | A$419,048 |
Financing Options: Mortgages for Australian Buyers
Getting a Japanese mortgage as a non-resident Australian is challenging. Most Japanese banks require:
- Japanese residency
- Stable employment income in Japan
- Japanese language ability
Realistic options for Australians:
- Cash purchase - Most common for non-residents
- SMBC Prestia - Offers loans to some non-residents, typically requiring 30-50% down payment and high net worth
- Australian equity release - Refinance Australian property to fund Japanese purchase
- Japanese residence - If you move to Japan, financing becomes easier
Pro Tip: Cash purchases are common for non-resident Australians since Japanese mortgage approval typically requires residency and stable income in Japan. Many investors refinance Australian property to access funds.
For more details, see our Complete Guide to Buying Property in Japan.
Ongoing Property Taxes in Japan
Annual Taxes
| Tax | Rate | Notes |
|---|---|---|
| Fixed Asset Tax | 1.4% of assessed value | Paid annually |
| City Planning Tax | 0.3% of assessed value | Urban areas only |
Note: “Assessed value” is typically 50-70% of market value, so effective rates are lower than they appear.
Non-Resident Withholding Tax
If you rent to a corporate tenant (most common for managed rentals), the tenant must withhold 20.42% of rent and remit it directly to the Japanese tax office. This is credited against your final tax liability but affects cash flow.
Important: Non-residents must appoint a tax representative residing in Japan. This person receives official tax correspondence and handles filings on your behalf.
For detailed tax information, visit the Japan National Tax Agency - Non-Resident Taxation page.
Property Management for Non-Resident Australians
Professional property management is essential for remote ownership. Expect to pay 5-10% of rental income for full-service management including:
- Tenant finding and screening
- Rent collection
- Maintenance coordination
- Tax filing assistance
- English communication
Several Tokyo and Osaka agencies specialize in serving overseas investors with bilingual staff and regular reporting.
Pro Tip: Choose a management company that provides detailed monthly reports in English, handles your tax representative duties, and communicates proactively about property issues. The small premium for quality service prevents expensive problems later.
Japan’s Important Land Use Law and Restrictions
Japan’s Important Land Use Law restricts foreign ownership near military bases and sensitive facilities. While most residential purchases are unaffected:
- Properties within 1km of defense facilities may require notification
- Remote border islands have additional restrictions
- New nationality reporting requirements begin FY2026
From April 2026, all property registration transfers require nationality declaration. Foreign corporations must also report the nationality of representatives and majority shareholders.
For official information, see the Cabinet Office Japan - Important Land Use Law page.
Rental Yields: Tokyo vs Osaka Investment Comparison
Japan offers attractive rental yields compared to Australian capitals, with strong occupancy rates.
Current Market Data (2025)
| Metric | Tokyo | Osaka |
|---|---|---|
| Gross rental yield | 3.44-3.59% | 4.26-4.47% |
| Annual price growth | 55.9% | Moderate |
| Occupancy rate | 96.1-96.6% | ~95% |
Source: Knight Frank, Global Property Guide, Savills Japan
Tokyo offers capital appreciation potential with 55.9% annual price growth through Q3 2025 (driven by limited supply and foreign investment), while Osaka provides higher rental yields for income-focused investors.
Japan’s average gross rental yield stands at 4.20% (Q1 2025), competitive with Sydney (approximately 3.0-3.5%) and Melbourne (approximately 3.5-4.0%).
Knight Frank reports: “Tokyo is experiencing exceptional growth with 55.9% annual increase in residential prices through Q3 2025, driven by expensive new-build homes, limited supply, and a weak yen spurring foreign investment.”
Learn more in our Tokyo investment guide and Osaka investment guide.
Common Mistakes Australian Buyers Should Avoid
- Using bank wire transfers - Pay 2-4% more than necessary on currency exchange
- Ignoring building age - Pre-1981 buildings lack modern earthquake standards
- Skipping the property visit - Photos don’t reveal neighborhood quality or building condition
- Forgetting ATO obligations - Failing to declare foreign rental income risks penalties
- Underestimating transaction costs - Budget 8-12%, not just the purchase price
- Neglecting tax representative appointment - Required by law for non-residents
- Poor management selection - Cheap property managers often cost more through vacancies and neglect
Pro Tip: Used properties are significantly cheaper but may require renovation and have older earthquake standards. Pre-1981 buildings are particularly risky—Japanese building codes changed dramatically after the 1981 revision following destructive earthquakes.
Tips for Transferring Money from Australia to Japan
Large property transfers require planning:
- Start early - International transfers can take 3-5 business days
- Use specialist services - Wise, OFX, or similar mid-market rate providers
- Comply with AML requirements - Transfers over ¥30 million require additional documentation
- Set rate alerts - Lock in favorable rates when they occur
- Consider staged transfers - Spread purchases across multiple transfers to average exchange rates
For a ¥40 million property, the difference between bank rates and mid-market rates could exceed A$10,000.
Akiya (Abandoned House) Investment Opportunities
Japan has approximately 8.5 million abandoned houses (akiya) available for purchase, many at remarkably low prices. For Australian investors willing to renovate:
- Purchase prices from ¥1-5 million (A$10,000-50,000) in rural areas
- Higher renovation costs but potential for strong returns
- Municipal subsidies available in some regions
- Consider access to transport—truly remote properties have limited rental demand
Read our complete Akiya Investment Guide for detailed analysis.
FAQ: Australians Buying Property in Japan
Do Australians need a visa to buy property in Japan?
No. Australians can purchase Japanese property without any visa. You don’t need to be a resident or even visit Japan to complete a purchase, though being present for contract signing is strongly recommended. Ownership rights are identical to those of Japanese citizens.
How does the Australia-Japan tax treaty affect property investment?
The treaty prevents double taxation on your Japanese property income. Japan has primary taxing rights on income from Japanese property—you pay Japanese tax on rental income and capital gains first. Then, when filing your Australian tax return, you claim a foreign income tax offset for tax already paid in Japan. This means you’re not taxed twice on the same income.
Can I get a mortgage in Japan as an Australian citizen?
It’s difficult. Most Japanese banks require residency and Japanese income. Non-resident Australians typically purchase with cash or use SMBC Prestia, which offers loans to some foreign nationals but usually requires 30-50% down payment and substantial assets. Many Australian investors refinance their Australian property instead.
Do I have to pay Australian tax on Japanese rental income?
Yes. Australian tax residents must declare worldwide income, including Japanese rental income. However, you can claim deductions for property expenses and a foreign income tax offset for tax paid in Japan. Keep detailed records in both currencies for at least 5 years after selling.
What is the best way to transfer AUD to JPY for a property purchase?
Use specialist international transfer services like Wise or OFX instead of bank wire transfers. Banks typically charge 2-4% above mid-market rates—for a ¥40 million property, this could cost you A$7,600-15,200 extra. Mid-market rate services offer transparent fees and true exchange rates, potentially saving thousands on your purchase.
Next Steps for Australian Buyers
- Research thoroughly - Use our Complete Guide to Buying Property in Japan to understand the full process
- Calculate total costs - Include transaction fees, ongoing taxes, and currency exchange
- Consult professionals - Engage a cross-border accountant familiar with both ATO and Japanese tax obligations
- Connect with agents - Find English-speaking real estate agents experienced with Australian buyers
- Review your tax position - Understand how Japanese property fits your overall investment strategy
For comprehensive tax information, visit our Taxes and Finance section.
This guide provides general information for Australian buyers considering Japanese property. Tax and legal requirements change—consult qualified professionals for advice specific to your situation. Foreign investment in Japan real estate exceeded $10 billion in 2024, reflecting growing international interest in the market.