FAQ

1. Q. Are foreigners permitted to buy property in Japan?

A. Yes, in fact they are most welcome to! Japan has no restrictions on foreign purchase of property. You don’t need to be a resident of Japan or even hold a specific visa. The exact same rules and legal procedures apply to both Japanese and non-Japanese buyers. 

The ease of acquiring property here is one of many factors that makes these assets so attractive to foreign investors.

2. Q. What about property taxes?

A. Fixed asset tax is levied once a year, based on the size and construction of your property or land. A local authority is responsible for calculating the amount of the tax, based on a 365 day year.

Fixed asset tax is paid early in the year, for the year ahead. When purchasing a property, the initial fixed asset tax payable will be calculated from the date of property settlement until December 31st of the same year. 

If you reside in Japan and have a Japanese bank account, you can pay the annual fixed asset tax yourself. If you don’t reside in Japan, you will need a tax manager to coordinate the payment on your behalf. We can assist with connecting you to a tax manager if you would like us to.

Taxes include

• Fixed Asset Tax / City Planning Tax (固定資産税 koteishisanzei・都市計画税 toshikeikakuzei) are usually charged together, and can be paid annually or quarterly.
• Property Acquisition Tax – This does not apply if the property is bought for residential purposes.
• Registration and License Tax – Charged during the property registration process.
  

3. Q. What about financing?

A. In general, it is extremely difficult for foreigners to obtain financing through a Japanese bank. At a minimum, permanent residency status and Japanese collateral is needed for your application to be considered. Property purchases made by foreigners are typically paid in cash, or using financing secured elsewhere.

Domestically and internationally, financial institutions are seeing the demand for foreign property investment in Japan growing every year. The accessibility of financing is improving all the time.

If domestic Japanese financing is accessible to you, prerequisites for loan eligibility typically are:

1. At the time of the application, the applicant should be over 20 years old and less than 65 – 70 years old. The applicant must not be more than 75 – 80 years old at the time the loan is projected to be paid off.
2. At least 2 to 3 years of continuous employment in Japan. There are some exceptions.
3. Minimum yearly income should be between approximately ¥2 to ¥5 million.
4. You must be  eligible for group credit life insurance (voluntary with some institutions).

4. Q. What about property management?

A. It is strongly advised to have a good set of hands to look after your investment here. We can connect you with excellent property managers.

5. Q. What about selling property?

A. If you are considering selling your property, please contact us for an obligation-free valuation. We will inspect your property and provide an honest, fair and impartial appraisal, based on our in-depth knowledge of the market.

If you’d like to list with us, we’ll work with you to create a sleek, professional marketing package, to give your property the best chance of success.

6. Q. What are the steps?

A.
1. Contact us with your properties of interest, to find out more.
2. If financing is required, it’s best to discuss your options with the bank as early as possible.
3. View the properties or have us view them for you
4. If there’s something you’d like to purchase, we’ll help you prepare an offer to present to the seller, which includes – purchase amount, the deposit amount (10-20% is most common) and the desired time between deposit & settlement (60 – 90 days is typical).
5. Negotiations between buyer and seller are not always required, but are common.
6. Once an agreement has been reached on terms, we will draft the sales documents and share with all relevant parties for review.
7. When all are happy with the sales documents, they are executed by buyer, seller and agent, creating a legal purchase agreement.
8. The buyer sends the deposit funds, completing the deposit.
9. The appointed Judicial Scrivener will work with both buyer and seller in advance of settlement, to ensure a smooth transition of ownership.
10. All checks and documents are complete, the property is ready to settle. The buyer pays the settlement funds to the seller, thereby completing the transaction. The property registration is updated by the judicial scrivener and ownership transfers.
11. New property title documents are issued and mailed to the new buyers. Congratulations!

7. Q. What are the costs involved in a property purchase?

A. Costs include, but are not limited to, the following.
1. Real estate agency fee = 3% + ¥60,000 + 10% consumption tax
2. Earnest money is generally 10% of the property price.
3. Stamp tax / stamp duty starts from just ¥200 for properties under ¥100,000 up to ¥480,000 if the property value is over ¥5 billion, usually around ¥15,000 to ¥20,000.
4. Other taxes are usually around ¥400,000
5. Registration and License Tax is 0.4~2% of the assessed value
6. Management Fee is about ¥17,000
7. Judicial Scrivener fee, if necessary, starts at ¥52,500

8. Q. What about the broker requirements in Japan?

A. Licensed brokers in Japan are required to perform both brokerage and legal roles in every real estate trade they handle. Due to the difficulty of passing the real estate exam, one full-time employed license holder can by law cover five sales staff. This means that the license holder is taking responsibility not only for their own contracts but those of five other staff as well.That’s another reason why finding a trustworthy, professional agency is crucial when looking to buy a house in Japan. Be certain you have an officially qualified broker. There is only one licensed broker in Myoko, and that is us!

9. Q. What if I don’t speak Japanese?

A. All of the documentation during the process will be provided in Japanese. We can arrange for paid translations, although only the Japanese texts of the laws and regulations have legal effect. The translations are to be used solely as reference materials to aid in the understanding of Japanese laws and regulations. Therefore, it is important to make sure the agency you choose has the qualifications, the license and the local knowledge you need.

We can help connect you to a number of qualified translators and interpreters, who can assist you through the process if needed.

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