Frequently Asked Questions by Foreigners When Buying Japanese Real Estate
How do I find available properties in Japan?
For foreigners looking for properties in Japan, it is highly recommended to use a real estate agent. From their extensive database and expertise with Japanese and the local area, they will be able to provide you with various properties that meet your requirements.
However, it is a fact that, in Japan, there are few real estate agents with English-speaking staff to accommodate foreigners. In this regard, SEKAI Property is one of the few agents based in Tokyo dedicated to foreign clients. With staff fluent in English and Japanese, they will make the process of buying a property run smooth.
What is the process of buying a property in Japan?
The process of buying a property in Japan can be divided into four main steps. First, choose a property through consulting a real estate agent. Second, apply for your property of choice through a “Purchase Application Document” (買付証明書) Third, sign the “Sales Agreement Contract” (売買契約書). Last, close the contract by receiving the keys to your new home.
For a more detailed explanation of purchasing property in Japan, click here.
Are there regulations when foreigners buy properties in Japan?
There are no regulations when foreigners buy properties in Japan.
How much is needed when buying a property in Japan?
Apart from the price of the property, you will need to pay for:
-Various taxes: around 400,000 JPY in total
-Registration and License Tax: 0.4~2% of the assessed value
-Management Fee: around 17,000 JPY
-Agent commission fee: 3% of the assessed value + 60,000 JPY + consumption tax
-Judicial Scrivener fee: from 52,500 JPY
What are the taxes included when buying a property in Japan?
-Fixed Asset Tax/City Planning Tax (固定資産税 koteishisanzei・都市計画税 toshikeikakuzei): The taxes, usually charged together, can be paid annually or quarterly.
-Property Acquisition Tax: If bought for residential purposes, this will be excluded.
-Registration and License Tax: Charged during the property registration process.
What documents are necessary when buying a property in Japan?
An affidavit must include your name, address, date of birth, nationality, and signature. Furthermore, the document must be notarized. Contact your local public office for more information.
What does “viewing” mean?
Called ”nairan” (内覧) in Japanese, viewing is the process of visiting a property you are interested in purchasing. This is a good opportunity to view the inside of your potential home, and check if there are utilities that need repairing.
It is also recommended to view the surrounding neighborhood, and check if the property is nearby bus or train stations.
Can I make a contract without coming to Japan?
In Japan, signing a contract legally requires the buyer to hear the “Explanation of Important Matters” and sign the contract. However, there are two options that allow a person to make a contract without coming to Japan.
Firstly, through preparing a Power of Attorney (委任状 ininjo), you can permit an acquaintance or relative to represent you in signing the contract.
Secondly, you can use a remote closing service in Japan, such as Escrow Agent Japan, that will conduct (for a fee) hear the “Explanation of Important Matters” in your place.
How are property rights registered?
From the day of settlement, the ownership will belong to the buyer. However, before the keys are given, the Judicial Scrivener (who will be on the day of closing) will have to register the owner and property in documents such as the Certified Copy of Registry (登記簿謄本 tokibotohon).
Are there insurances for natural disasters and can foreigners apply for them?
Yes, there are fire insurances, which often includes earthquake insurance, that are available to foreigners.
However, take note that the information for such insurance is only available in Japanese.
Can foreigners apply for a house loan?
A foreigner may apply for a house loan. Certain visas will be advantageous in this process, such as Permanent Residence Visa, Work Visa, and Spouse of a Japanese National Visa.
Furthermore, only certain banks allow foreigners to apply for a house loan.
For more information, refer to this article.
What is the average real estate agent fee?
The maximum real estate agent fee is 3%+60,000JPY. Most agents abide by this amount.
What are the characteristics of Japanese property?
One unique aspect of Japanese houses is its interior structure. Most houses include a “Japanese Room” (和室 washitsu) which has tatami flooring. Compared to houses overseas, Japan houses have top-class earthquake-resistant technology. There is also terminology unique to Japanese properties, such as “LDK” (Living room, Dining room, and Kitchen). Read this article for more information on the average structure of Japanese households.
Are Japanese properties furnished?
No. Unlike some countries, Japanese properties are not furnished. Please be aware of this when moving.
What are the average prices of properties in Tokyo?
Source: Real Estate Market Information 2017
The above graph shows that the average house price in Tokyo is 3.5 million JPY (USD 9427 per square meter) per square tsubo. However, prices vary massively depending on the location. For instance, the average prices in Katsushika Ward (East Tokyo) is 330,000 JPY per square meter, while the average price in Chuo Ward (Ginza, Nihonbashi, Tsukiji) is 6.6 million JPY per square meter.
For more information regarding prices in Tokyo and major cities, click here.
Where are the most luxurious areas in Tokyo?
Minato Ward, which includes high-end areas such as Roppongi, Shirogane-Takanawa, Azabu, and Toranomon, is considered Tokyo’s most luxurious area. The average price is 3.3 million JPY per square meter.
Click here for a list of the top residential areas in Tokyo.
Can I rent a property I bought in Japan? Who can help me with that?
A property management company will provide service for renting properties. For their service, on average they will charge 5% of the rental fee on a monthly basis.
What is the situation of Japan properties now? Will the market go up or down?
Tokyo is still maintaining the interest of foreign investors, while areas such as Osaka are increasingly gaining popularity as well. Furthermore, due to the upcoming 2020 Olympics, tourism in Japan has seen a record high. The economy of Japan is expected to only go up for the next few years.For a more in-depth analysis of Japan’s market situation, click here.
If you have any questions or would like to arrange a viewing, please feel free to contact us!
- Buying Land in Japan: What are the types of ownership rights?
- Apply for a Home Loan in Japan as a Foreigner in 4 Steps
- 4-Step Guide to Buying Property in Japan for Foreigners: Own a House in Japan
Explore about Japanese properties with our Guidebook
In this Guidebook - from Sekai Property, you will have chance to know:
- An overview about purchasing property in Japan
- Steps in purchasing property in detail with Property Flow, Costs and Taxes
- Example case
Let’s download it if you want to approach this big real estate market!