Can a foreigner buy a house in Japan? With the expertise of real estate transaction specialist Meiki Sugiyama, we guide you through the basics of buying a house in Japan.
- Can a foreigner buy a house in Japan? The basic view.
- Differences between foreigners and Japanese When buying real estate
- Required documents and qualification
- Basic steps to purchasing real estate
- The costs involved in real estate purchase
- Concerns when purchasing a house
Please jump to the relevant area for you from the table of contents.
Table of Contents
Profile of Writer
If you are interested in learning 5 essential considerations before buying a house, you might find this article helpful.
Chapter 1: Can a Foreigner Buy a House in Japan?
Foreigners can buy real estate in Japan without any special restrictions. They have the same rights to purchase property as Japanese citizens. However, there are a few points foreigners should keep in mind when buying real estate in Japan.
Are there any visa restrictions?
There are no visa restrictions for buying land, houses, or apartments in Japan. Foreigners can purchase real estate just like Japanese citizens. However, to live in Japan long-term after purchasing property, you must obtain the appropriate residency status.
It’s important to note that buying real estate in Japan does not automatically grant you a visa or permanent residency.
Are there any restrictions on holding or selling purchased property?
There are no restrictions on how long foreigners can hold purchased real estate or on selling it. You can freely sell the property, as well as pass it on through inheritance or gifts.
Additionally, foreigners do not pay different taxes compared to Japanese citizens. However, you will need to pay the same taxes as Japanese property owners.
Chapter 2: Are There Differences Between Foreigners and Japanese When Buying Real Estate?
Here are some differences when foreigners buy a house in Japan compared to Japanese citizens.
Reporting under the Foreign Exchange and Foreign Trade Act (FEFTA)
One key difference is that foreigners living abroad must report their property purchase to the Minister of Finance within 20 days of acquisition under the Foreign Exchange and Foreign Trade Act (FEFTA).
This law considers real estate purchases by non-residents as capital transactions. Reporting is required under certain conditions, but it is not necessary if:
- The purchaser already resides in Japan.
- The property is bought for a relative or employee to live in.
- The property is bought for non-profit activities.
- The property is bought for office use.
- The property is bought from another foreigner who does not reside in Japan.
In summary, reporting is required for investment purposes, but not for residential use. The report must be submitted through the Bank of Japan, including details such as the buyer’s name, nationality, property details, and purchase price.
Source: Bank of Japan
Restrictions on Using Mortgages
When buying real estate, you might consider using a mortgage. However, there are often challenges for foreigners in obtaining mortgages, as specific conditions must be met. It is particularly difficult to secure a loan without a long-term visa or residency status.
Many financial institutions require permanent residency to qualify for a mortgage. This is because the repayment period often exceeds 10 years, and foreigners with limited residency periods are seen as a higher risk. However, even without permanent residency, it is sometimes possible to get a loan under certain conditions. If you are considering using a mortgage, it is advisable to consult with financial institutions to understand your options.
Chapter 3: Required Documents and Qualifications for Purchasing Real Estate
For Those with Residency Status
When a foreigner with residency status buys real estate in Japan, the following documents are needed, the Japanese words are written on the table below:
- Certificate of Residence
- Special Permanent Resident Certificate or Residence Card
- Identification (e.g., driver’s license, passport, My Number card)
- Personal seal and seal registration certificate (not required if not using a mortgage)
In Japan, foreigners with residency status must have a Certificate of Residence, which is needed when purchasing real estate. This certificate can be obtained from the local government office where you live. If you are taking out a mortgage to buy the property, a personal seal and seal registration certificate are also required. The seal registration certificate can be registered at the local government office.
No special qualifications are needed to purchase real estate.
Source: Ministry of Land Infrastructure, Transport and Tourism
| English | Kanji | Romaji |
|---|---|---|
|
Certificate of Residence |
住民票 |
Juminhyo |
|
Special Permanent Resident Certificate |
特別永住者証明書 |
Tokubetsu Eijūsha Shōmeisho |
|
Residence Card |
在留カード |
Zairyū Kādo |
|
Personal Seal |
印鑑 |
inkan |
|
Seal Registration Certificate |
印鑑証明書 |
inkan shomeisho |
For Those Without Residency Status
When a foreigner without residency status buys real estate in Japan, the following documents are needed:
- Affidavit or a document equivalent to a Certificate of Residence from your home country or country of residence
- Identification (e.g., driver’s license, passport)
An affidavit is a document that certifies your name, address, and signature, serving as a substitute for Japan’s Certificate of Residence and seal registration certificate. To create an affidavit, it must be notarized by a notary in your home country or country of residence. It may also be possible to have it notarized at your country’s embassy in Japan.
However, there is a risk that notarization may not be possible in Japan. Therefore, if you are coming to Japan to purchase real estate, it is recommended to prepare the affidavit in your home country in advance.
No special qualifications are needed to purchase real estate, even for those without residency status.
Source: Ministry of Land Infrastructure, Transport and Tourism
Chapter 4: Basic Steps to Purchasing Real Estate
Here’s an explanation of the process for foreigners buying real estate in Japan:
1. Finding and Viewing Properties
Property listings can be found online or through real estate agencies. Once you find a property of interest, arrange a viewing through the agency.
2. Submitting a Purchase Offer
Once you decide on a property, submit a “Purchase Offer Certificate” (kaitsuke shōmeisho) to the seller or real estate agency. This document includes the proposed purchase price and other conditions, indicating your intention to buy.
3. Signing the Sales Contract
If the seller agrees on the purchase price and conditions, proceed to sign a sales contract (baibai keiyaku). This contract details the property’s location, size, price, payment deadlines, and other important terms.
At the time of signing the contract, you typically need to pay a deposit (tetsuke kin), which is about 5-10% of the property price. This deposit is non-refundable if the buyer cancels the contract, a common practice in Japan. The amount of the deposit can vary, so confirm with the real estate agency beforehand.
4. Settlement
- After finalizing the sales contract, proceed to settlement (kesai). This involves paying the remaining balance for the property and receiving ownership transfer through land registry (tōki bo), which changes the property ownership in the national registry.
- Required documents include your Residence Card (zairyū kādo), identification documents, Certificate of Residence (juminhyo), seal registration certificate (inkan shomeisho), and personal seal (inkan), or alternative documents if these are not available. Document requirements may vary by case, so check in advance.
5. Reporting under the Foreign Exchange and Foreign Trade Act (FEFTA)
If the purchased property is for investment purposes, you must report it under the Foreign Exchange and Foreign Trade Act (FEFTA) within 20 days of acquisition. This report must be submitted to the Minister of Finance through the Bank of Japan.
You will often encounter following Japanese keywords in the process.
| English | Kanji | Romaji |
|---|---|---|
|
Viewing a property |
内覧 |
Nairan |
|
Purchase Offer Certificate |
買付証明書 |
Kaitsuke Shōmeisho |
|
Sales Contract |
売買契約 |
Baibai Keiyaku |
|
Deposit |
手付金 |
Tesukekin |
|
Seal Registration Certificate |
印鑑証明書 |
inkan shomeisho |
|
Land Registry |
登記簿 |
tōkibo |
Chapter 5: Main Costs Involved in Real Estate Purchase
Here are the main costs you need to be aware of when purchasing real estate:
1. Deposit (手付金 – Tetsukekin)
- A deposit is required at the time of signing the sales contract. Typically, the deposit is set at around 5-10% of the property price. However, the exact amount is determined by agreement between the seller and buyer. The deposit is usually applied towards the property price.
2. Brokerage Fee (仲介手数料 – Chūkai Tesūryō)
The brokerage fee is charged by the real estate agency for facilitating the transaction between the seller and buyer. This fee is legally regulated, and its calculation varies based on the property price:
| Property Price | Quick calculation formula to find the maximum brokerage fee |
|---|---|
|
Over 4 million yen |
Property price × 3% + 60,000 yen + consumption tax |
|
Over 2 million yen to 4 million yen or less |
Property price × 4% + 20,000 yen + consumption tax |
|
2 million yen or less |
Property price × 5% + consumption tax |
3. Stamp Duty (印紙代 – Inshi-dai)
- Stamp duty is the tax paid when creating a sales contract for real estate. It is legally defined as follows:
*This table shows the amounts of stamp duty applied when the reduction of stamp duty amount was applied from April 1, 2014, to March 31, 2027.
Source: National Tax Agency
| Sales Price | Stamp Duty Amount |
|---|---|
|
Over 1 M yen up to 5 M yen |
1,000 yen |
|
Over 5 M yen up to 10 M yen |
5,000 yen |
|
Over 10 M yen up to 50 M yen |
10,000 yen |
|
Over 50 M yen up to 100 M yen |
30,000 yen |
4. Costs of a Judicial Scrivener (司法書士費用 – Shihoushoshi-Hiyo)
- The costs paid to a judicial scrivener when purchasing real estate include their fee and registration license tax. The fee for a judicial scrivener typically ranges from 50,000 to 100,000 yen, and the registration license tax varies depending on the property, often exceeding 100,000 yen. Judicial scrivener fees vary significantly based on the scrivener and the property being purchased, so it’s essential to confirm these costs in advance.
Chapter 6: Concerns When Foreigners Purchase Real Estate
Here are some concerns when foreigners purchase real estate in Japan:
Language Barrier: Even when foreigners purchase real estate in Japan, contracts are typically drafted in Japanese. This language difference can lead to misunderstandings about the contract terms if the foreign buyer does not understand Japanese. To mitigate risks due to language barriers, it’s recommended to engage a representative who can handle negotiations and contract procedures on behalf of the buyer. Representatives often include real estate agencies or specialized consultants, so consider seeking their assistance as needed.
Restrictions on Foreign Occupancy: While purchasing land or detached houses is generally unrestricted for foreigners, issues may arise with purchasing individual units in apartments. Some apartment bylaws may prohibit foreign residents from occupying units. In such cases, foreigners may face refusal of occupancy, preventing them from living in the purchased unit.
However, denying residency based on nationality may constitute a violation of human rights, so apartments explicitly refusing foreign occupancy are quite rare. Nonetheless, if purchasing an apartment with plans to reside there, it’s advisable to inquire with the real estate agency beforehand regarding policies on foreign occupancy.
Summary
This article explains whether foreigners can purchase real estate in Japan. Foreigners can buy property in Japan without any special conditions, making the process straightforward. However, if the purchase is for investment purposes, there may be obligations such as reporting to the Minister of Finance or complex procedures to gather necessary documents. Therefore, thorough preparation in advance is crucial.
