Guide to Buying a House in Japan

Can foreigners buy property in Japan?

Foreigners are allowed to obtain Japanese real estate

Nowadays, there are no legal limitations or tax-related differences when foreigners obtain Japanese real estate. You may purchase real estate regardless of what your nationality is, where you live, and whether you have residence status or not. However, there are differences in the documents needed by residents and non-residents (mainly documents for confirming the person's identity) and in the requirements for an account at a Japanese bank with regards to receiving purchase funds and paying taxes on real estate after purchase.

A foreigner can acquire proprietary rights to Japanese real estate just like a Japanese national. Proprietary rights to land in Japan by a foreigner is also permitted.
There is no time limit to proprietary rights, and it can be bought, sold and inherited freely among foreigners. The tax paid by a foreigner at the time of purchase is also the same as that paid by a Japanese.

How are residents and non-residents defined ?

A resident is an individual whose residence is in Japan or who has been in Japan for at least one year continuously up to the present. If a person resides in two or more countries, that person's "assumed residence" is based on such details as his/her work situation and contract.
A non-resident is an individual who resides outside of Japan.

What are the benefits of buying real estate in Japan?

• The political environment in Japan is very stable; chances of drastic changes in property rights are low.
• Japan is one of the safest and most hygienic places to live.
• Compared to many developed countries, the real estate market is fairly stable in Japan.
• Please take Affordable rate of Japanese Yen.
  Currently Japanese currency is still depreciating. It is easier to purchase Japan's property in a cheap price for overseas investors.
  Therefore, this is a good opportunity to invest in Japan's real estate.
  Besides, Japan is the largest creditor country, and has the 2nd large amount of foreign currency reserves in the world. This will help Japan avoid a currency fall during a financial crisis.
  Investors can invest in real estate in Japan of which politics and economy are stable.
• Property ownership, for both buildings and lands, in Japan is freehold.

The Process of a Real Estate Purchase in Japan

We here provide a detailed explanation of the procedure and flow of buying Japanese real estate and acquiring proprietary rights to it. It might be possible to gather property information from outside Japan via the Internet, but it will be necessary to visit Japan at least two times in order to inspect prospective property, sign contracts, and conduct the property handover.

The Cost of Buying and Owning Property in Japan

A number of fees are incurred when purchasing real estate in Japan, including taxes paid on the basis of Japan's particular legal and regulatory requirements as well as processing fees paid to the real estate agent. Other fees, such as management fees and repair fees, are also incurred after purchase. Here, we will provide information related to receiving funds as well as fees incurred before and after real estate purchases and items to be aware of when leasing property you own.

Are foreigners able to get a loan from local Japanese banks?

Essentially, it is difficult for non-residents to obtain loans from Japanese banks, and if you cannot take out a loan, you must either make the purchase in cash or arrange for funds through a loan from your home country. We recommend that you have a plan for obtaining funds before you look for property.

If you are purchasing property to use as housing

It is sometimes possible for foreigners to obtain loans from Japanese banks if they are going to be living in Japan. Generally speaking, having a permanent residence visa is required, but some banks may let you borrow money without having one. You should inquire at specific banks for details.

If you are purchasing an investment property or second house

Generally speaking, you cannot obtain a loan from a Japanese bank if you are a non-resident of Japan.

The Process of a Real Estate Purchase in Japan

We here provide a detailed explanation of the procedure and flow of buying Japanese real estate and acquiring proprietary rights to it. It might be possible to gather property information from outside Japan via the Internet, but it will be necessary to visit Japan at least two times in order to inspect prospective property, sign contracts, and conduct the property handover.

Property Purchase Costs and Taxes

When signing a contract

1. Stamp duty

Documentary stamp tax required for the sales contract.

2. Down payment

10 to 20% of the sales price

When settling the remaining payment

1. Remaining sum of the sales price of the property

2. Settlement money on a pro-rate basis

• Fixed Asset Tax , City Planning Tax
• Management fee, Repairing fund (for an apartment)

3. Agent Commission

3% of the sales price + 60,000 yen + consumption tax in accordance with property transaction regulations.

4. Registry License Tax

Registration of ownership’s right of land or a building.

5. Judicial Scrivener Fees

Fee for conducting owneriship transfer and necessary related registaration.
The exact amount varies depending on the property, the fund and the complexity of the registration procedure, but normally speaking, it is around ¥100,000.

6. Consumption Tax

• Levied at 8% of the property price
• Can be levied on new and old buildings but not on land
• Usually included in the selling price

Fees incurred after property handover

1. Real Estate Acquisition Tax

Tax on purchase of property.
Approximately 3 to 6 month after buying a property, all necessary documents related to the tax are sent by the tax office responsible for the property.

2. Disaster insurance premiums

Fees incurred yearly after property acquisition

1. Fixed asset tax

Levied by the Japanese government, this is 1.4% of the value of the fixed asset

2. City planning tax

Levied by the Japanese government, this is 0.3% of the value of the fixed asset

Condominium management fees, maintenance fees, and fixed asset tax, etc.

Japan has a "sectional ownership law" and a "homeowners association" system under which people who own and live in the same condominium complex must jointly manage the building and grounds. For that reason, there is generally a management fee for that purpose as well as a maintenance fee that goes toward common-use area of future building repairs, and the owner must pay these fees each month. The maintenance fee in particular is reviewed every few years and may be adjusted by the management association of homeowners in accordance with the long-term repair plan.

How is the contract executed?

• The purchase agreement is written in Japanese and all terms are subject to Japanese law.
• Agents can prepare a translation of the contract upon request; if discrepancies or conflicts exist between the Japanese version and the translation, the former shall take precedence.
  * Document of identification (e.g. passport) is required
• If the purchaser is a corporation, a certificate of corporation is required; documents that show evidence of the relationship between the contract signer and the registered corporation is also needed

Documents required when signing contracts

• Seal/ signature (Please ensure to bring both parties‘ seal in case of joint ownership)
• Passport
• Affidavit

How is the payment settled?

• Payment is settled in Japanese Yen
• Payment has to be transferred directly into our bank account
• 10 to 20% deposit and stamp fee is required when executing the contract
• The rest of the payment and other fees have to be settled at the time of property handover

Can I acquire a visa or residency after buying a property in Japan?

No. Immigration laws are quite strict in Japan. One may apply for a permanent residency after living in Japan for at least 10 years and an applicant has to go through a very careful inspection and application review progress.

What to do with my property when I am not in Japan?

• As an overseas purchaser, you can choose to employ a property management company to manage your properties.
• Property management service can help you deal with leasing, tenant management, payment, taxes, etc.

The need for an agent to pay taxes and other fees on behalf of non-residents

If a non-resident of Japan acquires property as an investment or second house, it will be difficult for that person to pay fixed asset tax, city planning tax, management fees, and maintenance fees, as well as to collect rent. Therefore, most people in this situation entrust these tasks to an agent. This requires paying a fee, but it is a useful service for non-residents of Japan who wish to continue owning real estate in Japan. We can find you such an agent for this situations.

At what rate do buildings depreciate in Japan?

According to the Tax Office :

Concrete construction

• pension, inn, hotel: 34 years
• rental cottage: 39 years
• commercial building: 31 years
• residence: 47 years

Timber construction

• ppension, inn, hotel: 20 years
• rental cottage: 22 years
• commercial building: 17 years
• residence: 22 years

Mortgage & Home Loan Guide

When purchasing a property in Japan, taking out a mortgage or home loan is an essential step for many buyers. By understanding the available loan options for foreigners, the application requirements, necessary documents, and repayment plans, you can proceed with your purchase with confidence. For more details, please visit our Mortgage & Home Loan Guide where you will find the latest information tailored for foreign residents in Japan.

Area Guide: Tokyo Neighborhoods & Major Cities in Japan

When considering real estate in Japan, choosing the right location is just as important as the property itself. Our Tokyo Neighborhood and Area Guide introduces all 23 wards of Tokyo as well as key cities across Japan, highlighting areas that are popular for both living and property investment. Discover detailed insights into each neighborhood’s living environment, lifestyle, and market trends by visiting our Area Guide.