For rental operations and single‑family holdings, you must budget for Fixed Asset Tax and City Planning Tax. The standard rate is 1.4% for Fixed Asset Tax. City Planning Tax is set by ordinance up to 0.3%. Residential land receives base‑value reductions. For small residential land up to 200 m², the taxable base is 1/6 for Fixed Asset Tax and 1/3 for City Planning Tax. This note focuses on land taxation and gives an on‑site calculation workflow.

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1. Core rules and terms

Tax = Assessed value × reduction coefficient × tax rate.

Small residential land is the portion up to 200 m² used for a dwelling. The excess over 200 m² is “general residential land” using 1/3 for Fixed Asset Tax and 2/3 for City Planning Tax.

City Planning Tax varies by municipality between 0% and 0.3%. Always check your local rate.

2. Step‑by‑step calculation for land

Step A Get the assessed value. In examples use price per m² × area.

Step B Classify the land. Up to 200 m² is “small,” any excess is “general.”

Step C Compress the taxable base. For Fixed Asset Tax use 1/6 (small) or 1/3 (general). For City Planning Tax use 1/3 (small) or 2/3 (general).

Step D Apply the rates. Fixed Asset Tax 1.4%, City Planning Tax your municipal rate.

3. Example

Assumptions Land 150 m², assessed at ¥30,000/m², municipal City Planning Tax 0.3%.

Total assessed value 150 m² × ¥30,000 = ¥4,500,000.

Fixed Asset Tax base ¥4,500,000 × 1/6 = ¥750,000. Tax *¥750,000 × 1.4% = *¥10,500.

City Planning Tax base ¥4,500,000 × 1/3 = ¥1,500,000. Tax *¥1,500,000 × 0.3% = *¥4,500.

Total annual land tax ¥15,000. Compare this to annual rent to gauge cash‑flow impact.

Takeaway

Two decisions drive accuracy classification and coefficients. Up to 200 m² use 1/6 for Fixed Asset Tax and 1/3 for City Planning Tax, apply 1/3 and 2/3 to any excess, then multiply by 1.4% and your local city‑planning rate. Use this quick math before acquisition and in yearly budgets to sharpen cash‑flow planning.