Japan | Tokyo accommodation tax to be revised to 3%, effective April 2027

The Japanese government has agreed to change the accommodation tax in Tokyo from a fixed-rate system to a tax rate system, which will take effect in April 2027. Five other cities will also adjust their accommodation taxes, and Nago City in Okinawa will introduce a new accommodation tax.

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Kyodo News reported that Minister of Internal Affairs and Communications Yoshimasa 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 as an example (approximately 723 Hong Kong dollars), the new tax would be 450 yen (about 22 Hong Kong dollars), which is 250 yen (about 12 Hong Kong dollars) more than the current regulation.

Under the current Tokyo accommodation tax, a room rate of less than 10k yen per person per night (about 482 Hong Kong dollars) is tax-exempt, between 10k yen and 15k yen is 100 yen, and above 15k yen is 200 yen. From April next year, the tax exemption threshold will be raised to 13k yen (about 626.78 Hong Kong dollars).

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Of the Tokyo metropolitan government's 30.6 billion yen (about 15k Hong Kong dollars) tourism expenditure for fiscal 2025, the existing accommodation tax only covers 6.9 billion yen (about 330 million Hong Kong dollars). After the reform, Tokyo expects to collect 19 billion yen (about 920 million Hong Kong dollars) annually.

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

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