When you own real estate such as land, buildings, or condominiums, there are taxes that you must pay every year.
These are
Fixed Asset Tax and City Planning Tax
.
When purchasing real estate, people tend to focus on mortgages, management fees, and repair reserve funds, but Fixed Asset Tax and City Planning Tax are also costs that continue as long as you own the property.
Also, when selling real estate, the question of
“Who pays this year’s Fixed Asset Tax?”
often arises.
In this article, we will explain the basics of Fixed Asset Tax and City Planning Tax, which you should know when purchasing, owning, or selling real estate in Sapporo, in an easy-to-understand manner.
What is Fixed Asset Tax?
Fixed Asset Tax is a local tax imposed on the owners (regardless of whether they are individuals or corporations) of fixed assets such as land, houses, and depreciable assets.
In the case of Sapporo City, the tax rate for Fixed Asset Tax is
Taxable base amount × 1.4%
.
What you should be careful about here is that it is
“not 1.4% of the purchase price”
.
In principle, Fixed Asset Tax is calculated based on the “price (assessed value)” registered in the fixed asset tax ledger.
Furthermore, because there are special measures for residential land, etc., it is not necessarily the case that 1.4% is multiplied by the assessed value itself.
What is City Planning Tax?
City Planning Tax is a purpose-specific tax used for urban planning projects such as roads, parks, and sewage systems, as well as land readjustment projects.
Unlike Property Tax, it does not apply to all land and buildings.
In Sapporo City,
land and houses located within urbanization promotion areas
are subject to taxation.
The tax rate is
taxable base amount × 0.3%
.
In other words, for a typical residence located within an urbanization promotion area in Sapporo City, both Property Tax and City Planning Tax will be levied.
However, since there are special provisions for residential land and the like,
“Property Tax 1.4% + City Planning Tax 0.3% = 1.7% of the assessed value”
cannot be calculated simply.
Who is taxed? The important date is “January 1st”
When understanding Property Tax and City Planning Tax, the date of
January 1st of each year
is extremely important.
In Sapporo City, the person registered as the owner in the property tax ledger or similar records as of January 1st of each year becomes the taxpayer for that fiscal year’s Property Tax.
For example,
January 1, 2026: Owned by Person A
June 1, 2026: Sold to Person B
Even in that case, the person obligated to pay the 2026 fixed asset tax to Sapporo City is, in principle, Mr. A.
“Since I sold it in June, the subsequent taxes will automatically be changed to the buyer”
is not how the system works.
If Mr. B is the owner on January 1st of the following year, he will be taxed from the following fiscal year.
In real estate transactions, fixed asset tax is often prorated
So, if you sell real estate in the middle of the year, does the seller bear the entire year’s worth?
While the person liable for tax purposes is the owner as of January 1st, in real estate transaction practice, it is common for the seller and buyer to prorate the fixed asset tax and city planning tax based on the handover date.
For example,
is the format.
However, the amount paid by the buyer does not mean the buyer is paying the fixed asset tax to the local government.
The National Tax Agency also explains that such settlement payments for fixed asset taxes and the like are paid based on an agreement between the seller and the buyer.
[Illustration 2: A scene where the seller and buyer are prorating the fixed asset tax based on the handover date]
Land has a “special provision for residential land”
When considering fixed asset tax, another important point is that
there are significant reduction measures for land on which a house is built.
In the case of Sapporo City, the portion of 200 square meters or less per dwelling is called “small-scale residential land,” and there is the following special provision regarding the tax base.
This special provision helps reduce the tax burden for homeowners.
Small-scale residential land
Fixed Asset Tax
1/6 of the value
City Planning Tax
1/3 of the value
Portion exceeding 200 square meters
For a certain range,
Fixed Asset Tax
1/3 of the value
City Planning Tax
2/3 of the value
will apply.
Therefore,
“If I tear down the old house, the fixed asset tax will probably go down”
if you think this and demolish the building, the special exception for residential land that was applied to the land may be removed, and there are cases where the tax burden on the land increases from the following fiscal year.
If you are going to demolish an old house before selling it, you need to consider this point as well.
The fixed asset tax assessed value is different from the selling price
This is also a point that is often misunderstood.
The “assessed value” for fixed asset tax and the “market price” at which real estate is actually bought and sold in the market are different things.
For example,
just because the fixed asset tax assessed value is 20 million yen,
“this house will sell for 20 million yen”
is not necessarily true.
Conversely, just because a property can sell for 30 million yen does not mean that the fixed asset tax assessed value will also be 30 million yen.
The value for fixed asset tax is determined based on specific criteria, and in Sapporo, assessments are generally revised every three years. The next base fiscal year is fiscal year 2027.
Fixed asset tax assessed value and real estate sales appraisal price are different things
It is good to keep this in mind.
[Illustration 3: A scene comparing the ‘fixed asset tax assessed value’ and the ‘actual real estate sale price’]
Keep your tax payment notice in a safe place
If you own real estate, you will receive a fixed asset tax and city planning tax payment notice and tax statement every year.
In Sapporo, the system is set up so that fixed asset tax is paid in four installments per year.
And this tax statement is also frequently used when selling real estate.
Real estate companies may ask to see your tax payment notice or tax statement to confirm items such as:
-
the fixed asset tax assessed value
-
the tax amount for each land and building
-
the settlement amount for fixed asset tax, etc.
We may ask to see these documents to confirm such details.
If you plan to sell in the future, we recommend that you keep them instead of throwing them away.
Summary | Check the ‘taxes incurred after purchase’ for real estate as well
Fixed asset tax and city planning tax are unavoidable taxes when owning real estate.
To summarize the key points:
-
Fixed asset tax is levied on land, houses, etc.
-
The fixed asset tax rate in Sapporo is 1.4%
-
City planning tax is mainly levied on land and houses within urbanization promotion areas
-
The city planning tax rate in Sapporo is 0.3%.
-
In principle, the taxpayer is the owner as of January 1st.
-
At the time of sale, it is common for the seller and buyer to settle the tax on a pro-rata basis.
-
There are special measures to reduce the tax burden for residential land.
-
The fixed asset tax assessment value and the actual sale price are different things.
These points are important.
In particular, when purchasing real estate, we recommend that you check not only the property price but also
“how much fixed asset tax will be incurred annually after purchase.”
until you have confirmed it.
Also, when selling real estate, the fixed asset tax assessment value and tax amount are important documents to check during the sales procedure.
If you have any concerns regarding real estate in Sapporo, such as
“How much can this property sell for?”
“Should I leave the building as is or demolish it if I sell it?”
please consult with a real estate company.
※ This article explains general information based on the systems and information of Sapporo City as of September 2026. Tax systems and application conditions are subject to change. Please check with the tax office, local government, or a tax accountant for individual tax judgments.
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