How to Buy Property in Japan as a Foreigner

Who can buy property in Japan?

There are no legal restrictions on foreigners owning real estate property in Japan. Same rules apply for Japanese citizens and foreigners when buying a property. Moreover - Japan is one of the few Asian countries offering freehold ownership structure which is appealing to a lot of foreign buyers and investors.

There is no path to citizenship or residency through a house purchase alone. On the other hand there is also no need to apply for any type of residency before being able to buy a property - it can even be done on a tourist visa!

Property purchase process

Choose a location and property

Familiarise yourself with the country and it´s different regions before making a decision. Look at the properties available according to the requirements and budget you have. It is recommended to hire the services of a real estate agent, who can also act as the buyer´s translator. It always helps if you know Japanese yourself as the best deals in the market are usually not marketed in English. 

Regions that are popular amongst investors and other foreigner buyers:

  • Tokyo - Tokyo, the bustling capital of Japan, is a blend of ultramodern technology and rich traditions. Skyscrapers and neon lights fill the skyline, while historic temples and shrines offer moments of serene reflection. The city´s diverse neighborhoods, from the fashion-forward streets of Shibuya to the historic Asakusa district, have something to offer to all tastes.
  • Hokkaido - Hokkaido is the largest and northernmost island of Japan. It´s known for its beautiful natural scenery, mountains, forests and lakes - it´s a year-round paradise for nature enthusiasts. Hokkaido is also home to many hot springs and ski resorts. Sapporo, the capital of Hokkaido, is known for its beer festival and its ramen.
  • Osaka - Osaka, Japan´s second-largest city, is a vibrant hub of commerce and culture. The Dotonbori district is famous for its neon signs and bustling nightlife.
  • Nagoya - An industrial center (home to the Toyota Motor Corporation and Panasonic) that is also renowned for its historical significance, exemplified by the famous Nagoya Castle. 

When searching for properties online, consider these sources:

To compare price data about any specific region that interests you, visit this site, created by Japan´s Ministry of Land, Infrastructure, Transport and Tourism. 

Visit properties and submit letter of intent

Try to visit as many properties as you can to get the best picture of the market situation and the neighbourhood. Once you have settled on a property that you would like to purchase, you need to submit a letter of intent which is not binding but rather a starting point for negotiations and to show your strong interest in acquiring the property.

Due diligence and financing

If the price negotiations have been successful, it is important to carry out due diligence about the property. At this stage, if needed, you can also negotiate financing with local banks to get preapproval for a mortgage. Keep in mind that if you are not a permanent resident of Japan, securing a loan will be very difficult. 

A Juyoujikou-Setsumeisho (similar to a Property Disclosure Statement or Seller´s Real Property Disclosure Statement) is drafted by the seller´s estate agent. This is document is required by law and needs to include all the information about the property that the buyer might need to make a decision. If you are not comfortable with such documentation, it´s best to source local legal help who specialises in this matter.

Paying a deposit and finalizing the contract

The purchase contract is drafted once a deal is settled and the documents are satisfactory. 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.

How much does it cost to buy property in Japan?

Transaction Costs

    Who Pays?
Property Transfer Tax 3.00% - 4.00% buyer
Registration Tax 2% (building value)
2% (land value)
Notary Fees 0.40% buyer
Legal Fees 1.00% buyer
Real Estate Agent´s Fee 3.00%
Costs paid by buyer 9.40% - 10.40%
Costs paid by seller 3.00%
Source: Global Property Guide

Additions to transaction costs table

The round trip transaction costs include all standard costs of buying and then re-selling a property - lawyers´ fees, notaries´ fees, registration fees, taxes, agents´ fees, etc. The following costs include additional local costs.

Consumption Tax

Sales of buildings are subject to consumption tax, which is levied at a flat rate of 10%. Sales of land are exempted from consumption tax.

Property Tax

Municipal tax is levied at 1.4% on the assessed value of the land or building. The calculation method entails multiplying the tax base amount by 1.4%.

City Planning Tax

City planning tax is levied at a flat rate of 0.3% on the assessed value of the land or building. The property is exempt if its value is less than certain thresholds.