Moderate roundtrip buying costs in Japan
Taxation Researcher | July 30, 2020
How high are realtors´ and lawyers´ fees in Japan? What about other property purchase costs?
|Stamp Duty||0.01% - 0.20%||buyer|
|Real Estate Agent´s Fee||3.15% + JPY63,000 (US$534)||buyer|
|Costs paid by buyer||13.26% - 13.45%|
|Costs paid by seller||0%|
|ROUNDTRIP TRANSACTION COSTS||13.26% - 13.45%|
| See Footnotes
Source: Global Property Guide
Process of buying property
There are no legal restrictions on foreigners owning real estate property in Japan.
Negotiations and private survey may begin once property has been chosen. It is important to hire the services of a real estate agent, who can also act as the buyer´s translator. An offer or a letter of intent, however, is not legally binding.
Before the deal, a Juyoujikou- Setsumeisho (similar to a Property Disclosure Statement or Seller´s Real Property Disclosure Statement) is drafted by the real estate agent. The purchase contract is drafted once a deal is settled. After this, a 10% deposit is expected from the buyer before the contract date.
During closing, the title is transferred. Both parties should have certificates of their seal impressions. Stamps are obtained, and government fees and taxes are paid to register the title.
The last step is to pay the remaining balance.
The whole process of registering property has six procedures, which can be completed in around 12 days.
Footnotes to transaction costs table
The round trip transaction costs include all costs of buying and then re-selling a property - lawyers´ fees, notaries´ fees, registration fees, taxes, agents´ fees, etc.
Sales of buildings are subject to consumption tax, which is levied at a flat rate of 5%. Sales of land are exempted from consumption tax.
The 5% consumption tax rate is composed of 4% national consumption tax and 1% local consumption tax.
Acquisition tax is levied at a flat rate of 4% for land. The tax is levied on the valuation of the property as determined by local government agencies, which is usually around 60% to 80% of the market value of the property.
Acquisition tax is levied at a flat rate of 4% for nonresidential buildings.
Registration tax is levied at a flat rate of 2% for land, and 2% for buildings. The tax is levied on the valuation of the property as determined by local government agencies, which is usually around 60% to 80% of the market value of the property.
A reduced registration tax rate of 1.50% may be applicable for purchased land until 31 March 2013.
Stamp duty is levied on deed of contracts concerning transfer of real estate properties.
|Property Value, JPY (US$)||Rate, JPY (US$)|
|Up to 10,000 (US$92)||0|
|10,000 - 100,000 (US$917)||200 (US$1.83)|
|100,000 - 500,000 (US$4,587)||400 (US$4)|
|500,000 - 1 million (US$9,174)||1,000 (US$9)|
|1 million - 5 million (US$45,872)||2,000 (US$18)|
|5 million - 10 million (US$91,743)||10,000 (US$92)|
|10 million - 50 million (US$458,716)||15,000 (US$138)|
|50 million - 100 million (US$917,431)||45,000 (US$413)|
|100 million - 500 million (US$4,587,156)||80,000 (US$734)|
|500 million - 1 billion (US$9,174,312)||180,000 (US$1,651)|
|1 billion - 5 billion (US$45,871,560)||360,000 (US$3,303)|
|Over 5 billion (US$45,871,560)||540,000 (US$4,954)|
|No stated property value||200 (US$1.83)|
Judicial Scrivener Fees
A judicial scrivener (shiho shoshi) is a paralegal who settles and registers property transactions. Judicial scrivener fees are negotiable but are typically around 0.10% of the property value.
Real Estate Agent´s Fee
Real estate agent´s fee are set at 3.15% of the sales price of the property, plus JPY63,000 (US$578).