Whether a Tokyo home is worth keeping cannot be decided by asking only if it might sell above the original purchase price. Compare the cash you would receive by selling now with the cost of owning it for longer and the terms on which you might eventually sell. Continuing to live there, leaving it empty and renting it out are distinct decisions.
First estimate the cash released by selling now
Use recent transactions in the same building and nearby properties to set a price range. Adjust for floor, orientation, size, condition, management quality and timing. Japan’s MLIT Real Estate Information Library offers transaction data, but an individual recorded sale is not an appraisal of your unit. Keep asking prices separate from completed transactions.
From the likely sale price, deduct transaction costs and the loan balance repaid on completion. Estimate tax separately. Cash released on sale is not the same as taxable capital gain: Japan’s capital-gains calculation generally considers acquisition cost and qualifying selling costs, and the building’s acquisition cost is adjusted for depreciation. Outstanding mortgage debt is not itself a deduction when calculating gain.
Illustration, not a market forecast: a ¥120 million sale price less ¥4 million of selling costs and a ¥70 million loan payoff leaves approximately ¥46 million before tax. To estimate tax, you need the purchase records, the allocation between land and building and the property’s ownership and occupancy history.
Compare continuing to live there on the same timeline
Keeping the home means continuing to pay property tax, insurance, condominium management fees and repair reserves, equipment replacement and loan payments. Track the outstanding debt at the end of each comparison period. Selling, however, also means paying for another home or rent. Do not invent rental income for a home you occupy; compare its use value through the cost and practical suitability of the replacement home.
For an apartment, read the building’s long-term repair plan, reserve balance, arrears and planned increases or major works. A comparison that assumes ownership costs remain flat can overstate the case for holding.
Renting it out changes the decision
If you move out and let the home, prepare a rental cash-flow schedule with vacancy, leasing fees, management, maintenance, taxes and loan payments. Principal repayment is a cash outflow, but is not generally treated as a rental expense in the same way as interest. A falling loan balance also increases potential cash on a future sale; avoid counting that benefit twice. Before advertising, confirm whether the current home-loan agreement permits renting the property. Tax treatment for an owner-occupied home may depend on when you moved out and when you ultimately sell.
Japan’s National Tax Agency describes a special deduction of up to ¥30 million from qualifying capital gain on the sale of a principal residence. This is a deduction from gain, not ¥30 million taken off a tax bill. An earlier residence may qualify only if timing and other conditions are met; the rule commonly refers to sale by 31 December of the year containing the third anniversary of moving out. Interactions with housing-loan tax relief and filing requirements also need checking. Do not assume the same after-tax proceeds from selling now and from renting for several years before selling.
Run three comparable scenarios
- Sell now: a realistic completed-sale range, costs, loan payoff, estimated after-tax cash and the cost of your next home over the comparison period.
- Continue living there: total cash paid, rate changes, repairs, possible end-period sale prices and remaining debt.
- Move and rent it out: vacancy-adjusted rental cash flow, permission from the lender, the replacement home’s cost and eventual after-tax sale proceeds.
Use the same end date and more than one future price for each scenario. Test whether a weaker sale price still repays the debt and costs. If you hold, decide now what price or change in costs would trigger another review, and when that review will occur. Our brokerage service can support a sale or purchase; independent property evaluation can help frame the hold-or-sell decision.
Sources and scope
- MLIT: Real Estate Information Library (Japanese)
- MLIT: Condominium Management in Japan
- National Tax Agency: calculation of property capital gains (Japanese)
- National Tax Agency: sale of a principal residence (Japanese)
- National Tax Agency: sale of a former residence (Japanese)
Sources checked 26 September 2026. Tax outcomes, special-deduction eligibility and lending terms depend on the individual transaction. Read the Japanese edition.