Japan (JP)
Japan is one of the world's most captivating destinations for expats — a country where ancient temple culture and ultra-modern technology coexist seamlessly.
Buying Property in Japan
The full buying process, transaction costs, mortgage, and legal requirements.
Japan places no legal restrictions on foreign nationals buying property — residential or commercial — regardless of residency status or nationality. Non-residents and foreigners living abroad can buy Japanese property freely. Japan's real estate market is unique globally: land in major cities (Tokyo, Osaka) has retained or appreciated in value, while buildings depreciate rapidly (useful life of 20–30 years for wooden structures, 47 years for reinforced concrete). This means the land value is the primary investment — a 30-year-old wooden house may have near-zero structural value but sit on highly valuable land. Tokyo in particular has seen significant price appreciation since 2013. The earthquake risk requires careful attention to seismic resistance ratings (耐震基準 / taishin kijun). Foreign buyers pay no stamp duties or capital gains tax differentials compared to Japanese nationals.
Rent vs. Buy
Japan's decision between renting and buying is more nuanced than most markets. Renting is financially rational in many scenarios due to: the rapid depreciation of building structures; high transaction costs (8–13% of purchase price); low rental yields in central Tokyo (2–3%); and Japan's deflationary experience of the 1990s–2010s (though the market has recovered significantly). Key factors favouring buying: stable long-term residency (5+ years), access to Japanese mortgages (variable rates approximately 0.8–1.0% for mainstream lenders in 2026 after Bank of Japan rate increases — some online/challenger banks still offer best rates from ~0.3%), yen weakness making foreign-currency investors effectively buying at a discount, and Tokyo's scarcity of land in desirable areas. Foreigners without PR or Japanese citizenship may find it harder to access the best mortgage rates. Buying a home also creates a stable base and avoids the social/logistical complexity of Japan's rental market for foreigners.
Buying Process — Step by Step
Research and Area Selection
1–3 months researchResearch target areas using Suumo (suumo.jp), Homes.co.jp, and At Home (athome.co.jp). Consider: proximity to train stations (strongly affects value), seismic hazard maps (ハザードマップ — check your target municipality's hazard map), school districts, flood risk, and future development plans. International-area agents (e.g. Ken Corporation, Plaza Homes, RE/MAX Japan) offer English service.
Engage a Licensed Real Estate Agent (宅地建物取引士)
1–4 weeks to engage and begin viewingsReal estate agents in Japan are licensed by prefectural authorities. Buyer's agent fee: typically 3% of purchase price + ¥60,000 + consumption tax (3.3% all-in) — this is a legal maximum and is often paid by the buyer, not the seller. Agents present listings and arrange viewings. Note: many listings in Japan are shared across agencies — you can approach any agency holding a listing.
Property Inspection and Due Diligence
1–2 weeksCommission a home inspection (建物検査 / Tatemono Kensa) — not mandatory but strongly recommended, approximately ¥50,000–100,000. Check: earthquake resistance certificate (耐震基準適合証明書) — critical for older buildings; asbestos survey for buildings pre-2006; flood and landslide hazard map (市区町村提供); land registry (登記簿謄本) for any liens or easements; urban planning designation (都市計画 / toshi keikaku) affecting future development.
Submit Purchase Application (買付申込書)
1–2 weeks negotiationComplete a purchase application (買付申込書 / Kaitsuke Mōshikomisho) stating your intended purchase price and conditions. This is not legally binding but signals serious intent. The seller may accept, counter, or reject. Negotiation on price and conditions occurs at this stage.
Important Matters Explanation (重要事項説明 / Jūyō Jikō Setsumei)
1–2 weeksMandatory pre-contract disclosure by a licensed real estate transaction specialist (宅地建物取引士 / Takken-shi). Covers: legal status of the property, building restrictions, any defects, boundary disputes, infrastructure connections, and contract terms. You have a right to receive and review this document before signing. As of 2022, can be conducted online/electronically (IT重説). A translator may be arranged for foreign buyers — confirm with your agent.
Sales Contract (売買契約書)
Signing day; typically 1–4 weeks after application acceptedSign the legally binding Sales and Purchase Agreement (不動産売買契約書). Pay the deposit (手付金 / Tetsukekin): typically 5–10% of purchase price. If you withdraw after this point, you forfeit the deposit. If the seller withdraws, they must pay you double the deposit. Stamp duty (印紙税 / Inshi-zei) on the contract is required: ¥10,000–60,000 depending on price.
Mortgage Application (if financing)
2–6 weeksApply to banks for a mortgage (住宅ローン / Jūtaku Rōn). Japanese banks typically require: proof of income for 2–3 years, permanent residency or long-term visa (some banks lend to non-PR holders), employment at a Japanese company, and credit check. Major lenders: MUFG, SMBC, Japan Housing Finance Agency (フラット35, government-backed fixed rate, available to non-PR holders). Pre-approval typically takes 1–2 weeks; full approval 2–4 weeks.
Settlement and Registration (決済・登記)
Settlement day; registration completed within 1–2 weeksAt settlement: pay the balance of purchase price (net of deposit). The seller's judicial scrivener (司法書士 / Shihō Shoshi) prepares and submits the registration change at the Legal Affairs Bureau (法務局). You pay: remaining purchase price, agent fees, registration costs, and taxes. Receive keys. The title transfer is recorded in the Land Registry (不動産登記簿 / Fudōsan Tōkibo). Foreign buyers may need an Inkan (seal or notarised signature) and certified translation of identity documents.
Post-Purchase Registration and Taxes
1–6 months post-purchaseReport address change to ward office if moving in. File Real Estate Acquisition Tax return (不動産取得税) with prefectural tax office — typically assessed 3–6 months after purchase (2–4% of assessed value, with exemptions for primary residence). Register for Fixed Asset Tax (固定資産税) — billed annually by the municipality. Notify your bank and employer of new address.
Transaction Costs
| Cost Item | Amount | Notes |
|---|---|---|
| Purchase price | Varies | Central Tokyo new apartment: ¥60M–120M+ / 70m². Suburban Tokyo: ¥30M–60M. Regional cities: ¥10M–30M. |
| Deposit (手付金) | 5–10% of purchase price | Paid at contract signing. Applied to final payment. Forfeited if buyer withdraws. |
| Real estate agent fee (仲介手数料) | 3% of price + ¥60,000 + 10% consumption tax (max ~3.3% all-in) | Legal maximum. Applies to new and second-hand properties. Some new-build developers sell directly (no fee). |
| Stamp duty on contract (印紙税) | ¥10,000–60,000 | Based on contract value. ¥10,000 for ¥10M–50M; ¥30,000 for ¥50M–100M. Temporary reductions often apply to residential contracts. |
| Registration and license tax (登録免許税) | 0.4–2.0% of assessed value | Transfer registration: 2.0% (standard); 0.3% for primary residence (special rate). Mortgage registration: 0.1–0.4%. |
| Judicial scrivener fee (司法書士費用) | ¥80,000–200,000 | For preparing and filing the ownership transfer registration at the Legal Affairs Bureau. |
| Real Estate Acquisition Tax (不動産取得税) | 3–4% of assessed value | Assessed value (固定資産税評価額) is typically 60–70% of market value. Residential land: 3%. Standard exemptions and reductions available for primary residence. Billed 3–6 months post-purchase. |
| Annual Fixed Asset Tax (固定資産税) | 1.4% of assessed value per year | Paid quarterly. Residential land receives a significant reduction (1/6 or 1/3 of assessed value used as tax base). Typical Tokyo apartment: ¥100,000–500,000/year. |
| Urban Planning Tax (都市計画税) | 0.3% of assessed value per year | Applies in urbanisation promotion zones (市街化区域). Adds to fixed asset tax. |
| Home inspection (建物検査) | ¥50,000–100,000 | Optional but strongly recommended — covers structural, equipment, and defect inspection. |
| Fire and earthquake insurance (地震保険) | ¥30,000–150,000/year | Earthquake insurance is government-backed, sold as an add-on to standard fire insurance. Strongly recommended in Japan. |
| Management fees (管理費) and repair reserve (修繕積立金) | ¥15,000–50,000/month (for condominiums) | Mandatory for condominium (マンション) purchases. Cover building management, security, and building repair reserve fund. |
The Notary — Mandatory for All Purchases
Japan does not use notaries for property transactions in the same way as civil law countries. Instead, a Judicial Scrivener (司法書士 / Shihō Shoshi) prepares and files the ownership transfer registration at the Legal Affairs Bureau (法務局 / Hōmu-kyoku). The Shihō Shoshi verifies identity, prepares registration documents, and submits the transfer. There is no requirement for either party to attend the Legal Affairs Bureau — the Shihō Shoshi handles it on your behalf. Their fee is typically ¥80,000–200,000 depending on the transaction complexity. All property ownership in Japan is recorded in the Land and Building Registry (不動産登記簿謄本), publicly accessible at any Legal Affairs Bureau.
Mortgage
Japan has some of the lowest mortgage rates by global standards. Following Bank of Japan rate increases (policy rate raised to 0.75% in December 2025), mainstream variable rates have shifted upward. Typical 2026 rates: variable (floating): approximately 0.8–1.0% p.a. for mainstream lenders (some challenger online banks still offer best rates from ~0.3%); fixed 10-year rates typically 1.5–2.5%; long-term fixed (フラット35 government-backed) approximately 1.8–2.5%. The standard mortgage term is 35 years. Banks calculate borrowing capacity at approximately 30–35% of annual income. Japan's Housing Finance Agency (住宅金融支援機構) offers the フラット35 (Flat 35) government-backed fixed-rate mortgage — available to some non-PR foreign nationals and particularly popular for purchase of older homes.
10–20% deposit (頭金 / atama-kin) is standard for Japanese borrowers. Some banks offer 100% LTV loans for high-income borrowers with permanent residence. Foreign nationals without PR are typically required to put down 20–30%. Mortgage insurance (団体信用生命保険 / Danshin) is included in most bank mortgages — the mortgage is paid off if the borrower dies or is severely disabled.
Foreign nationals can obtain Japanese mortgages but face additional conditions: most major banks (MUFG, SMBC, Mizuho) require permanent residency (永住権) or citizenship. Some regional banks and non-bank lenders are more flexible with long-term visa holders. SBI Shinsei Bank and some international banks offer mortgages to non-PR foreign residents. The Japan Housing Finance Agency's フラット35 is available to some non-PR holders. Foreign income from overseas employment may not be accepted — Japanese-source income is typically required. Interest rates for non-PR holders may be 0.1–0.5% higher than for PR/citizens. Consult a mortgage broker (住宅ローンアドバイザー) experienced with foreign nationals.
Land Registry
Japan's Land and Building Registry (不動産登記簿謄本 / Fudōsan Tōkibo Tōhon) is maintained by the Legal Affairs Bureau (法務局). It records: ownership history, current owner, any mortgages or liens (抵当権), land area and use classification, building structure and floor area. Anyone can request a certified registry extract (登記事項証明書) for any property for ¥600 online (登記情報提供サービス) or ¥480–600 at the Legal Affairs Bureau. Always obtain a current registry extract before purchase to verify ownership and check for any undisclosed charges.
Taxes
Main taxes on property purchase and ownership: Real Estate Acquisition Tax (不動産取得税): 3–4% of assessed value, one-time at purchase. Fixed Asset Tax (固定資産税): 1.4% of assessed value annually — the assessed value (固定資産税評価額) is typically 60–70% of market value, and residential land receives a preferential rate reduction. Urban Planning Tax (都市計画税): 0.3% annually in urbanisation zones. Registration and License Tax (登録免許税): 0.1–2% on registration. Consumption tax (消費税, 10%): applies to new buildings sold by businesses (not land, not resale of used homes from individuals). Capital Gains Tax (譲渡所得税): on sale — 39.63% (income tax + residence tax + special reconstruction tax) for assets held under 5 years; 20.315% for assets held 5+ years. Primary residence capital gains: ¥30M exemption (3,000万円特別控除). Foreign residents are subject to the same capital gains rules as Japanese nationals when selling Japanese property.
New Build vs. Existing Property
New builds (新築): higher price per sqm, full earthquake-resistant construction under post-2000 standards, warranty (住宅瑕疵担保責任保険) for 10 years for structural defects, no stamp duty on land component, no immediate renovation costs. Often sold off-plan before completion. Existing (中古): lower price, immediate viewing possible, established neighbourhood, but structural inspection critical (especially pre-2000 and pre-1981 earthquake codes). Japanese buyers strongly prefer new builds, causing new builds to command significant premiums while existing stock depreciates rapidly. Foreign investors often find better value in existing stock, particularly in central locations where land value dominates.
Selling Property
When selling: engage a licensed real estate agent (仲介手数料: 3% + ¥60,000 + tax, same as buying). A Judicial Scrivener handles the deregistration of ownership. Capital gains tax applies — calculated as sale price minus acquisition cost (purchase price + improvements + transaction costs) minus ¥30M primary residence exemption. Tax return for the gain must be filed by March 15 of the following year. Foreign residents remitting sale proceeds overseas must report this to the Bank of Japan if over ¥30M (国際収支報告).
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