Furusato Nozei: Japan's Hometown Tax for Foreigners

Reviewed by Jordy Meow & Emi (accountant) · Updated 22 Jun 2026 · About

If you pay residence tax1 in Japan, furusato nozei2 (ふるさと納税, "hometown tax") is the closest thing to free money you will find. You donate to towns you choose, get local thank-you gifts in return, and almost the entire donation comes back to you as a tax reduction. Your real cost is usually just ¥2,000 total, no matter how much you donate.

Yes, foreigners can use it. There is no nationality requirement: anyone who is a tax resident of Japan and pays residence tax qualifies, whatever your visa.

Curious how much residence tax you even pay? Pop your salary into the tax calculator, the figure it shows for Resident Tax is exactly the pot furusato nozei lets you redirect.

How it works, in plain words #

  1. You donate to one or more municipalities through a furusato nozei portal (the donations are technically to local governments, not purchases).
  2. In return, that town sends you a thank-you gift3 (返礼品), rice, beef, fruit, seafood, sake, vouchers… capped by law at 30% of your donation's value.
  3. The following year, the amount you donated minus ¥2,000 is subtracted from your taxes, partly from income tax (as a refund) and mostly from your residence tax (as a reduction).

So if you donate ¥50,000, you pay ¥2,000 out of pocket, receive up to ¥15,000 worth of gifts, and ¥48,000 comes off taxes you would have paid anyway. It only works because you donate within your limit (see below).

Your donation limit #

The ¥2,000-cost magic only applies up to a limit that depends on your income and deductions. Donate more than your limit and the excess is a genuine out-of-pocket gift, not a tax swap.

As a rough guide, a single employee with no dependents earning ¥5 million can donate around ¥60,000. Don't eyeball it, every major portal has a free simulator; enter your income and family situation and it tells you your cap. Stay a little under it to be safe.

The trap foreigners must know: January 1st #

Your residence-tax reduction is applied to the residence tax assessed on January 1st of the year after you donate. If you have left Japan (or are no longer a registered resident) on that January 1st, you lose the residence-tax portion entirely.

In short: if you are planning to leave Japan, furusato nozei usually does not make sense for your final year. (When you do leave, look at our Leaving Japan: pension refund guide instead.)

Two ways to claim it #

Option A, One-Stop Special System4 (ワンストップ特例)
The easy route, if you qualify:

  • You did not otherwise need to file a tax return (i.e. a regular employee with year-end adjustment), and
  • You donated to 5 municipalities or fewer in the year.

You send each town a short One-Stop form (plus a copy of your My Number5 ID) by January 10th, and your residence tax is automatically reduced from June. No tax return needed.

Option B, include it in your tax return
If you file a final tax return anyway, freelancers, or anyone donating to 6+ towns, you simply list your donations there using the receipts (or the single combined certificate portals now issue). You get part back as an income-tax refund and the rest as a residence-tax cut.

If you do any kakutei shinkoku (e.g. you're a freelancer, or you're also claiming furusato nozei via the return), it cancels your One-Stop submissions, you must then declare all your donations on the return. Don't mix the two.

What changed for 2025–2026 #

From October 1, 2025, the Ministry of Internal Affairs banned portals from handing out their own bonus loyalty points6 on donations, a perk many people used to stack. The core tax benefit is unchanged; only the portals' extra point campaigns are gone. Donate any time up to December 31st to count for that tax year.

Getting started #

Pick a portal (Furusato Choice / ふるさとチョイス, Satofull / さとふる and Rakuten are the popular ones), run their simulator, then donate within your limit. Keep every receipt, and choose One-Stop or your tax return, not both.

Official references: Ministry of Internal Affairs and Communications, furusato nozei portal · National Tax Agency, donation deduction

This might help #

1 Residence tax : 住民税 jūminzei
2 Furusato nozei (hometown tax) : ふるさと納税 furusato nōzei
3 Thank-you gift : 返礼品 henreihin
4 One-Stop Special System : ワンストップ特例制度 wansutoppu tokurei seido
5 My Number (Individual Number) : マイナンバー mai nambā
6 Loyalty points : ポイント pointo

Frequently asked questions

Can foreigners use furusato nozei?
Yes. There is no nationality requirement, any tax resident of Japan who pays residence tax qualifies, on any visa.
What does furusato nozei actually cost me?
Just ¥2,000 in total, as long as you stay within your donation limit. Everything above ¥2,000 comes back as a reduction in your income tax and residence tax.
What is the One-Stop Special System?
A simplified route for people who do not otherwise file a tax return and who donate to 5 municipalities or fewer. You send each town a short form by January 10 and your residence tax is reduced automatically, no tax return needed.
I am leaving Japan soon, should I still do it?
Usually no. The residence-tax credit is applied based on where you are resident on January 1 of the following year, so if you have left Japan by then you lose that part of the benefit.