When do you become a "non-resident"? — The contract date, the date of delivery, or the date you leave?

The date of delivery of the property. Whether withholding at source of 10.21% applies turns on whether the seller is a non-resident on the date of delivery — not on the date the money is paid, and not on the date of the contract (National Tax Agency, question-and-answer examples; Basic Circular on the Income Tax Act, 36-12). Getting only the contract done first, in other words, achieves little.

This page deals only with the point in time at which the question is decided. The rate of 10.21%, who pays it over and the exception to it are covered in A guide to selling Japanese real estate for overseas owners, and how a sale before departure is run in our feature on selling property before leaving Japan.

Last updated: 29 September 2026

Who is a "non-resident" in the first place?

The Income Tax Act divides individuals into residents and non-residents.

Category	Definition
Resident	An individual who has a domicile in Japan, or who has had a place of residence in Japan continuously for a year or more up to the present (Income Tax Act, Article 2, paragraph 1, item 3)
Non-resident	An individual other than a resident (same paragraph, item 4)

"Domicile" here does not mean your residence record. It means the centre of a person's life, and it is determined on the objective facts — the dwelling, the occupation, where the assets are, where relatives live, nationality and so on. A "place of residence" is somewhere the person actually lives without its amounting to the centre of their life (National Tax Agency, Taxanswer No.2012).

Closing your residence record does not make you a non-resident. Conversely, a person may be treated as a non-resident while their residence record is still open.

Do you become a non-resident on the day you leave?

The date of departure is not itself the test. Depending on the circumstances of the departure, though, a presumption may operate.

Where an individual who has come to live outside Japan falls within either of the following, that person is presumed not to have a domicile in Japan (National Tax Agency, "Appendix: presumption as to domicile"; Order for Enforcement of the Income Tax Act, Article 15; Basic Circular on the Income Tax Act, 3-2).

#	Where the presumption operates
(1)	The person has an occupation abroad that ordinarily requires them to live there continuously for a year or more
(2)	The person has foreign nationality, or has permission to reside permanently in a foreign country under the law of that country, and has no spouse or other relative in Japan sharing the same household; and, in the light of matters such as whether they have an occupation and assets in Japan, there is no fact sufficient to infer that they will return to Japan and live principally in Japan

Note: where a spouse or other dependent relative sharing a household with a person presumed under the above not to have a domicile in Japan lives abroad, those people too are presumed not to have a domicile in Japan.

In practice (1) is far and away the most common — moving to an employer abroad for a year or more, or returning to a company in your home country. Where the intended period is under a year, by contrast, the presumption does not operate.

A presumption is only a presumption. Facts to the contrary displace it. Which is exactly why the next question — which point in time you look at — carries the weight.

So at what point in time is it decided?

For consideration on the transfer of land and buildings, it is, as a rule, the date of delivery of the property.

The National Tax Agency's question-and-answer examples (based on the laws, circulars and so on in force as at 1 August Reiwa 7 (2025)) address the point squarely.

As regards consideration on the transfer of land, the date on which payment falls due — the date on which the income is to be recognised, seen from the transferor's side — is ordinarily the date on which the land was delivered (Basic Circular on the Income Tax Act, 36-12), so whether withholding at source applies is determined by whether the person receiving that consideration is a resident or a non-resident on the date on which the land was delivered.

And the example given is telling.

How the example runs
May	Company A, a domestic corporation, buys land in Japan from B, a non-resident
July	Delivery (B is a non-resident at this point)
August	B returns to Japan and becomes a resident
September	Company A pays B the purchase price (B is a resident at this point)

The conclusion is that withholding at source is required. Even though B was a resident again at the time of payment, B was a non-resident at the time of delivery.

It works the other way round too. If you are a resident on the date of delivery, this withholding does not arise even if you leave afterwards. That is why the feature works backwards towards completion at least five business days before departure.

What if the contract is before departure and completion is after?

The contract date is not the test.

When departure is close, people think about at least getting the contract signed. That is understandable, but it does not bear on the withholding question.

How it is run	Status on the date of delivery	Withholding at source
Contract and delivery both before departure	Resident	None
Contract before departure, delivery after	Non-resident	Yes (10.21%)
Contract and delivery both after departure	Non-resident	Yes (10.21%)

None of which means there is no point in signing first. Securing a buyer and fixing the terms is worth something. It simply does not amount to having got the tax side done before you left.

(There is an exception to the withholding. It applies where the price is JPY 100 million or less and the buyer is an individual acquiring the property as a home for themselves or a relative. See A guide to selling Japanese real estate for overseas owners for the detail.)

Is the tax year for your return also fixed by the date of delivery?

Here it is a little different. There is room for a choice.

On the timing of income recognition for the gross revenue of capital gains, Basic Circular on the Income Tax Act 36-12 provides as follows.

Rule	The date on which the asset was delivered
Exception	Where, at the taxpayer's election, the amount is included in gross revenue by reference to the date on which the contract for the transfer of the asset takes effect, and the return is filed on that basis, that is accepted

Which is to say that which year you put it in for filing purposes can, within limits, be chosen. On a sale that straddles a year end, this can affect the five-year holding-period test and the availability of the special provisions.

Whether withholding at source applies, on the other hand, is decided on the date of delivery, as set out above.

This double structure is where the confusion starts. It does not follow that "since I elected the contract-date year for my return, withholding must be looked at on the contract date too." The year of the return and the point in time for the withholding test are separate questions. On a sale that straddles a year end, or one where the contract and the delivery are far apart, always confirm the position with a licensed tax accountant (zeirishi). Individual judgements are made by a licensed tax accountant.

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How should the departure date and the completion date be ordered?

Just the order, set out.

#	When	What happens
1	Fix the completion date first	Pin down a date the buyer, the lender and the judicial scrivener (shiho-shoshi) can all make (completion day being the day the balance is paid and the registration applied for)
2	Check that the completion date is the date of delivery	They are usually the same day, but watch for a special provision putting delivery on a different date
3	Put the departure date after the date of delivery	This is the conclusion of this article
4	After delivery and before departure, file notification of a tax agent	Does a tax agent in Japan need a qualification, and can a company act as one?
5	Moving-out notification to your municipal office	After the tax agent notification
6	Departure	—

Look closely at line 2. An arrangement along the lines of "completion today, keys next week" can put the date of delivery after you have left. Check the clause in the contract.

Where the dates cannot be moved and delivery does fall after departure, recalculate your net proceeds on the basis that withholding applies. What is deducted is settled through the final tax return the following year (and refunded where too much has been paid). It is not a case of losing money, but the amount that reaches you, and when it reaches you, both change.

What if the position is finely balanced?

In cases such as the following, do not decide for yourself — speak to a licensed tax accountant before completion.

The situation	Why it is finely balanced
The intended period abroad is around a year	It sits on the line of whether the presumption as to domicile (an occupation of a year or more) operates
Family remaining in Japan	Where relatives sharing the household live is one of the factors
Delivery and payment on different dates	The point in time for the test shifts
A sale straddling a year end	The choice of year for the return and the five-year holding-period test both come into it
You may be a resident of both Japan and the other country	A determination under a tax treaty may be needed

What we can do runs as far as putting the schedule together. We check the completion date and the date of delivery, design the order in which they and your departure date fall, and introduce you to a licensed tax accountant. Calculating the tax, preparing the return, and the final judgement on whether a person is a resident or a non-resident, are matters for a licensed tax accountant. We receive no referral fee.

What this article is based on

Point	Source
The definition of a resident (an individual with a domicile in Japan, or with a place of residence in Japan continuously for a year or more up to the present) and of a non-resident	Income Tax Act (Act No. 33 of Showa 40 (1965)), Article 2, paragraph 1, items 3 and 4
"Domicile" = the centre of a person's life, determined on the objective facts such as the dwelling, the occupation, where the assets are, where relatives live and nationality; the meaning of "place of residence"	National Tax Agency, Taxanswer No.2012, "Determining resident and non-resident status (where a person has more than one place of stay)" (based on the laws and regulations in force as at 1 April Reiwa 7 (2025)); Basic Circular on the Income Tax Act, 2-1
Cases in which a person is presumed not to have a domicile in Japan (having an occupation abroad that ordinarily requires them to live there continuously for a year or more, and others)	National Tax Agency, Taxanswer No.2875, appendix "Presumption as to domicile" (based on the laws and regulations in force as at 1 April Reiwa 7 (2025)); Order for Enforcement of the Income Tax Act, Article 15; Basic Circular on the Income Tax Act, 3-2
That withholding at source on consideration for the transfer of land is determined by whether the recipient is a resident or a non-resident on "the date of delivery" (withholding is required where the delivery fell within the non-resident period, even if the seller was a resident again when the money was paid)	National Tax Agency, question-and-answer examples, "Determining whether a payment subject to withholding at source is made to a resident or to a non-resident" (based on the laws, circulars and so on in force as at 1 August Reiwa 7 (2025)); Income Tax Act, Article 161, paragraph 1, item 5 and Article 212, paragraph 1; Basic Circular on the Income Tax Act, 36-9, 36-12 and 212-5
Timing of income recognition for the gross revenue of capital gains (as a rule the date of delivery; at the taxpayer's election, the date the contract takes effect is also available)	Basic Circular on the Income Tax Act, 36-12
The rate of withholding at source (10.21%) when buying property from a non-resident, and the exception to it	Income Tax Act, Article 161, paragraph 1, item 5 and Article 212, paragraph 1; Act on Special Measures for Securing Financial Resources for Reconstruction, Article 28; Order for Enforcement of the Income Tax Act, Article 281-3; National Tax Agency, Taxanswer No.2879
Appointment of a tax agent and notification of the appointment	Act on General Rules for National Taxes, Article 117
Determination under a tax treaty where a person is a resident of both countries	National Tax Agency, Taxanswer No.2012; Japan's tax treaties with individual countries

This page provides general information only. Whether a person is a resident or a non-resident is determined on the objective facts, and the conclusion changes with individual circumstances. Individual tax judgements are made by a licensed tax accountant. The National Tax Agency's question-and-answer examples are general answers given on the assumption of the facts put to it in the enquiry, and applying them to a particular transaction may produce a different tax treatment.

Real estate brokerage is handled by Yotsuba Real Estate Co., Ltd. (Real Estate Brokerage Business Licence, Governor of Tokyo (1) No. 113304), and the preparation of documents for licence and permit applications by Yotsuba Administrative Scrivener Office (gyosei-shoshi), under a separate contract in each case. For tax matters we introduce you to a licensed tax accountant and for registrations to a judicial scrivener, and you contract with each of them directly. We receive no referral fee.

About the author Joji Uramatsu | Representative Director of Yotsuba Real Estate Co., Ltd. and its full-time Real Estate Transaction Specialist (takken-shi). Administrative scrivener. Former China Bureau Chief of the Mainichi Shimbun, with 34 years as a journalist; posted to China, Taiwan and Thailand in that role. Passed the Certified Social Insurance and Labour Consultant examination (practice scheduled to open September 2026).

Related links

• Feature: selling your property before you leave Japan
• Does a tax agent in Japan need a qualification, and can a company act as one?
• A guide to selling Japanese real estate for overseas owners (the detail on withholding at source of 10.21%)
• What to do with your home in Japan while you live overseas (letting it, keeping it)
• Contact us