Minpaku and taxes: income category, consumption tax, lodging tax, and filing
As the number of visitors to Japan grows, more people are starting minpaku (short-term home-sharing lodging) using a spare room or a vacant house. But the taxation of minpaku is a distinctive one that is neither "the same as rental income" nor "the same as ordinary business sales" — so much so that the National Tax Agency has published a dedicated view on it. On top of that, from 2025 to 2027 the number of local governments imposing a lodging tax is rising sharply across the country, and minpaku is included as taxable. This article organizes everything from the income category of minpaku earnings to expenses, consumption tax, lodging tax, and the pitfalls of using your own home, based on primary sources from public bodies such as the National Tax Agency.
・Income from minpaku run in your own home is, under the National Tax Agency's view, in principle "miscellaneous income." It is treated differently from ordinary rental income (real estate income)
・Lodging charges are subject to consumption tax (residential rent is exempt, but minpaku is treated the same as a hotel)
・The areas subject to lodging tax are expanding rapidly. You take on the practical work of collecting it from guests and remitting it
・Starting a minpaku in your own home can affect the mortgage loan credit and the reduction of fixed asset tax
Background: minpaku has three legal frameworks
Before getting into taxes, let's cover the legal framework of minpaku. The number of days you can operate, and the tax issues explained later, change depending on which framework you run under[Minpaku System Portal (in Japanese)].
| Framework | Operating days | Features |
|---|---|---|
| Housing Accommodation Business Act (the new minpaku law) | Up to 180 days a year | Can be started with a notification to the prefecture, etc. Almost all individuals running a minpaku in their own home or a vacant house use this |
| Special-zone minpaku | No limit (stays of 2 nights/3 days or more required) | Only in some National Strategic Special Zones (such as Osaka City). Certification by the local government is required |
| Inns and Hotels Act (simple lodging) | No limit | A business license is required. A full-scale form of operation as a dedicated facility |
This article focuses on the most common case: an individual who has filed a notification under the new minpaku law and operates in their own home or a vacant house.
Income category: minpaku earnings are in principle "miscellaneous income"
You might assume, "Since I'm lending out a room, isn't it real estate income like rent?" — but it isn't. In a document published to coincide with the enforcement of the new minpaku law, the National Tax Agency organizes it so that income from a housing accommodation business run in your own home is, in principle, "miscellaneous income"[National Tax Agency (information)].
The reason is that minpaku is not simply the lending of a room. Operators are obliged to ensure guest safety and hygiene, and the lodging charge mixes in consideration for services such as bedding cleaning, utilities, room cleaning, and tourist guidance — so its nature differs from ordinary rental (real estate income).
| Case | Income category |
|---|---|
| Running a new-law minpaku in (part of) your own home | In principle, miscellaneous income |
| A person running a real estate rental business temporarily using a vacant room for minpaku until the next tenant is decided | May be included in real estate income |
| Operating at a scale recognized as running a business, such as operating multiple dedicated properties | May become business income |
While it remains miscellaneous income, you cannot use the ¥650,000 deduction of the blue return. The shape of your filing changes considerably depending on whether you aim for a scale that qualifies as business income by running a full-scale operation in dedicated properties, or continue within the scope of a side business. The differences from the taxes of ordinary rental management are explained in Taxes on real estate investment.
An employee who has had a year-end adjustment does not need to file an income tax return if their income (revenue minus expenses) other than salary is ¥200,000 or less for the year. However, there is no ¥200,000 rule for residence tax, so a residence tax declaration to your municipality is required. For details, see the Guide to filing for side jobs.
Revenue and expenses: apportionment is the key
Revenue is the amount including the lodging charge plus any cleaning fees received separately from guests. What remains after subtracting necessary expenses is your income. Common minpaku expenses are as follows.
| Examples of expenses | Points |
|---|---|
| Fees to minpaku booking sites | Fully deductible |
| Outsourcing fees to a housing accommodation management operator and cleaning contractors | Fully deductible |
| Bedding, amenities, and consumables for guests | The portion purchased for guests is fully deductible |
| Utilities and communication costs | If shared with your home, apportionment is required |
| Rent (when operating in a rented property), fixed asset tax, insurance premiums | Only the portion used for minpaku can be apportioned and deducted |
| Depreciation of buildings and equipment | Only the portion used for minpaku can be apportioned and deducted |
For apportionment when using part of your home, the National Tax Agency's document also gives an example of calculating it by "the proportion of floor area used for minpaku" and "the annual number of operating days (days of use)"[National Tax Agency (information)]. The principle is to divide it on a reasoned basis, not "roughly half."
Annual lodging revenue (including cleaning fees) of ¥960,000. Expenses: booking-site fees ¥140,000 + outsourced cleaning ¥120,000 + guest linens and consumables ¥80,000 + the apportioned share of utilities, insurance, etc. ¥70,000 = ¥410,000.
→ Miscellaneous income = ¥960,000 − ¥410,000 = ¥550,000. Since it exceeds ¥200,000, even an employee must file a tax return.
Consumption tax: don't confuse it with "rent is exempt"
Residential rent is exempt from consumption tax, but that is about a lease contractually specified as "for a person's residence." A minpaku lodging charge is the same as a hotel or inn lodging charge and is subject to consumption tax[National Tax Agency No.6226].
However, being subject to tax and actually having an obligation to pay are two different things. If your taxable sales in the base period (the year before last) are ¥10 million or less, you may remain a tax-exempt business, and in most cases a side-business-scale minpaku incurs no tax payment. Because guests are mainly individual travelers, there are not many situations that urgently require registration for a qualified invoice (invoice system); but if there is a lot of business-trip use where guests settle expenses on their side, it may be worth considering. Since the burden-easing measure (the 20% special provision) for those who register and become taxable businesses has a set end date, please also see The end of the invoice 20% special provision.
Lodging tax: target areas are expanding fast. The host becomes the one who "collects and remits"
Right now, the most active area in minpaku taxation is the lodging tax. The number of local governments that have introduced it or plan to is expected to rise sharply from about 20 to around 50 over 2026–2027, and in many local governments minpaku (housing accommodation businesses) is also taxable. Here is the situation in major areas (per person per night; judged by the pre-tax lodging charge).
| Area | Tax amount guide | Effective date |
|---|---|---|
| Osaka Prefecture | Under ¥5,000 exempt. Then three tiers of ¥200 / ¥400 / ¥500 | From September 2025 (revised) |
| Kyoto City | Five tiers from ¥200 to ¥10,000 (stays of ¥100,000 or more: ¥10,000). The highest level nationwide | From March 2026 (revised) |
| Hokkaido | As a prefectural tax, three tiers of ¥100 / ¥200 / ¥500. In some areas such as Sapporo City, a municipal portion is added on top | From April 2026 |
| Tokyo | Currently a flat ¥100 / ¥200 (minpaku not covered) → changed to a 3% ad valorem rate on the lodging charge, with minpaku and simple lodging also covered (under ¥13,000 exempt) | From April 2027 |
Beyond these, moves to introduce and revise the tax continue, and the tax amounts and exemption thresholds differ by local government. Always check the local government's official page for the latest information in your area of operation.
Lodging tax is a tax borne by the guest, and the host becomes a "special collection agent" who collects it from guests and remits it to the local government (filing and payment procedures are required). The lodging tax you collect is not sales (revenue) but should be classified as a deposit, displayed and managed separately from the lodging charge. Note also that if you set a cleaning fee as a mandatory charge, it is generally treated as included in the amount used to judge the lodging tax.
Three pitfalls of home minpaku: "homeowner preferences" can be lost
When starting a minpaku in part of your home, apart from income tax, consumption tax, and lodging tax, you need to check whether the tax preferences that apply to your owned home might collapse.
① Mortgage loan credit: One requirement for the mortgage loan credit is that "half or more of the floor area is for your own residence." If the proportion used for minpaku is large, you may become unable to apply it; and even when you can apply it, the credit is only for the portion corresponding to residential use
② Fixed asset tax: The land of a residence has its fixed asset tax greatly reduced by the "special provision for residential land" (for small-scale residential land the tax base is one-sixth). If the residential portion falls below half, all or part of the special provision is lost and the tax amount can jump. The mechanism is explained in Calculating fixed asset tax
③ The ¥30 million special deduction on sale: The ¥30 million special deduction when you sell your own home applies to a "residential property." The portion used for the minpaku business may fall outside the scope
Also, if you reach a scale judged to be running a business, such as setting up dedicated properties, you may become subject to the prefecture's individual enterprise tax (a rate of 5% as a guide, as a hotel/inn business). Because the number of issues that go beyond the scope of this article increases when you expand your scale, we recommend consulting a tax accountant.
Summary
FAQ
Does income from running a minpaku in a spare room at home become real estate income like rent?
No. The National Tax Agency organizes income from a housing accommodation business run in your own home (a new-law minpaku) as, in principle, "miscellaneous income." This is because the lodging charge includes consideration for services such as cleaning, linens, and tourist guidance, so its nature differs from simply lending a room. If a person running a real estate rental business temporarily runs a minpaku in a vacant room, it may be included in real estate income.
If an employee's side-business minpaku profit is ¥200,000 or less a year, do they need to do nothing?
No income tax return is required, but because there is no ¥200,000 rule for residence tax, a residence tax declaration to your municipality is required. Also, in a year when you file a tax return for the medical expense deduction, Furusato Nozei, and the like, you must include the minpaku income of ¥200,000 or less in that filing too.
Is consumption tax charged on a minpaku lodging charge?
Yes. Residential rent is exempt, but a minpaku lodging charge is taxable, the same as a hotel or inn. However, if your taxable sales in the base period (the year before last) are ¥10 million or less, you are a tax-exempt business and no actual tax obligation arises. For side-business-scale minpaku, remaining tax-exempt is the case in the great majority of situations.
Do I record the lodging tax received from guests as revenue?
No. Lodging tax is a tax borne by the guest; the host collects it as a special collection agent and files and remits it to the local government. In accounting, it is not sales but a deposit, managed separately from the lodging charge.
I heard that starting a minpaku at home raises the fixed asset tax. Is that true?
It is possible. The land of a residence has its fixed asset tax greatly reduced by the special provision for residential land, but if the proportion used for minpaku increases and the residential portion falls below half, all or part of the special provision may no longer apply and the tax amount can increase greatly. It can also affect the mortgage loan credit requirement (half or more of the floor area for your own residence), so you need to check before starting at home.
Reference links (sources)
This article is based on the following official materials (neutral, primary sources).
- National Tax Agency — On the taxation of income arising from housing accommodation businesses under the Housing Accommodation Business Act (information) (in Japanese)
- National Tax Agency — Tax Answer No.6226 Lending of housing (in Japanese)
- National Tax Agency — Tax Answer No.1900 Salary earners who must file a tax return (in Japanese)
- Minpaku System Portal (Ministry of Land, Infrastructure, Transport and Tourism / Japan Tourism Agency) (in Japanese)
- Osaka Prefecture — The lodging tax system is changing (in Japanese)
- Hokkaido — Hokkaido lodging tax (in Japanese)
* This article is general information, not tax advice. Lodging tax amounts, exemption thresholds, and effective dates change by local government and fiscal year. For decisions on specific filings and notifications, please confirm with a tax office, local government, tax accountant, or other professional.