In Japan, an increasing number of investors choose to purchase and manage property through a corporation. Incorporation offers advantages in taxation and asset management, but requires attention to registration, financing, and tax compliance that differ from individual ownership.

1. Company Formation and Capital

For a property‑holding corporation, initial capital is critical for establishing credibility with lenders. A practical starting point is ¥5 million or more. At registration, a Certificate of Corporate Registry and Articles of Incorporation are required.

The company’s business purpose must explicitly include “acquisition, ownership, and leasing of real estate.”

2. Financing and Loan Differences

Loans to corporations are typically subject to stricter screening than personal mortgages. Banks review both the corporate financials and the representative’s credit record to assess repayment ability.

For newly established companies, a personal guarantee by the representative is usually required, and 20–30% of the purchase price should be prepared as equity.

3. Tax Advantages and Drawbacks

Owning property through a corporation allows a wider range of deductible expenses, such as management fees, travel, and vehicle costs.

However, even minimal profits are subject to the corporate inhabitant tax (around ¥70,000 per year minimum). Corporations must also file annual tax returns, so accounting fees must be considered.

4. Example: Purchasing an Apartment Building via a Corporation

A corporation with ¥10 million in capital acquires a ¥50 million rental property. Assuming annual profits of ¥3 million, the corporate tax burden would be roughly 23%, with an effective rate near 30%. For high‑income individuals, incorporation can reduce total tax by approximately 5–10%.

5. Takeaway

Purchasing real estate under a corporate structure requires careful planning in financing, taxation, and registration. In the first year especially, coordinating early with both a tax advisor and financial institution is the most effective way to secure funding and maximize tax efficiency.