Overseas Rental Income, Naturalization

Background:

I have been living in Japan for over 10 years as a seishain and own a rental property in my home country (SEA).

For years, the rental income (approx. 30k JPY/month) was not remitted to Japan; it was used to cover part of the mortgage payments. Because the mortgage installment is higher than the rent, the property has consistently operated at a net loss. Consequently, I have not declared this as income in Japan. The property has been vacant since 2022, but I have a potential tenant interested for this year.

As I am currently preparing my application for naturalization, I want to ensure my tax records are perfectly compliant.

Questions:

  1. Tax Obligation: Am I required to declare this rental income in Japan, even if the property results in a net loss overall?

  2. Procedure: If I need to rectify this, what is the proper process for declaring past income or amending my tax status?

  3. Naturalization Impact: How might this history of undeclared (albeit loss-making) income impact my naturalization application? Is this considered a significant "red flag"?

I would appreciate any advice or guidance on how to handle this correctly before submitting my documents.

by HellBornCorgi