Japan｜Tokyo Accommodation Tax to Be Changed to 3%, Effective April 2027

The Japanese government has agreed to change Tokyo's accommodation tax from a fixed amount system to a tax rate system, which will take effect in April 2027. Five other cities are also adjusting their accommodation taxes, with Nago City in Okinawa newly introducing an accommodation tax.

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According to Kyodo News, Minister of Internal Affairs and Communications Yoshihiro Hayashi agreed on Tuesday (June 30) to change Tokyo's accommodation tax to a 3% levy on accommodation costs. Taking a room rate of 15k yen per person per night (approximately 723 Hong Kong dollars) as an example, the new tax would be 450 yen (approximately 22 Hong Kong dollars), which is 250 yen (approximately 12 Hong Kong dollars) more than the current regulation.

Under the current Tokyo accommodation tax, rooms with a nightly rate under 10k yen (approximately 482 Hong Kong dollars) per person are exempt from tax, rates between 10k yen and 15k yen are taxed at 100 yen, and rates above 15k yen are taxed at 200 yen. Starting April next year, the tax exemption threshold will be raised to 13k yen (approximately 626.78 Hong Kong dollars).

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Of Tokyo's 30.6 billion yen (approximately 15k Hong Kong dollars) in tourism spending for fiscal year 2025, the existing accommodation tax only covers 6.9 billion yen (approximately 10k Hong Kong dollars). After the reform, Tokyo expects to collect 19 billion yen (approximately 10k Hong Kong dollars) annually.

The new accommodation measures will be implemented gradually in 2027. Nago City will start collecting the tax from February 2027, Wakkanai City and Kitahiroshima City in Hokkaido will adjust in March and October respectively, and four cities including Tokyo will adjust from April.

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