Guide
Navigating the Unique Process of Buying a House in Japan
Buying a house in Japan is a journey that is uniquely different from other parts of the world, combining traditional practices with modern procedures. This article guides prospective homeowners through the essential steps of purchasing a property in Japan.
First of all, There are no citizenship or resident visa requirements to buy a house in Japan. We speak English and Japanese, and we are professional Japanese real estate. Please don’t hesitate to ask us if you have any questions. If you tell us the area, price, layout, and other conditions you’re looking for in a property in Japan, we can search for real estate that suits your needs.
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- STEP 01Understanding the Market
- Japanese real estate has distinctive features, including various types of properties like traditional houses (minka), modern apartments (mansions), and compact city dwellings. Potential buyers should familiarize themselves with these options and the typical architectural and design elements in Japanese homes, such as tatami mats and genkan (entrance areas).
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- STEP 02Financial Considerations(Please prepare cash on hand.)
Financial planning is crucial in the Japanese housing market. It’s important to understand property taxes, insurance requirements, and mortgage options available in Japan. Budgeting must also account for unique costs like a property acquisition tax, registration tax, and real estate agent fees. In Japan, those with high-income jobs and holding permanent residency may be eligible for a housing loan, but it is almost impossible for others. Therefore, please consider purchasing in cash or exploring financing options in your home country.
In Japan, after purchasing a property, you are subject to a real estate acquisition tax. This tax is typically billed about one year after the purchase. The tax rate is calculated as ‘property price x tax rate.’ The combined tax for land and residential property is 3%, while for non-residential buildings, it is 4%
The registration and license tax varies depending on the price of the property, but it is a necessary procedure to acquire ownership. Please confirm this before purchasing.
The real estate agency fee depends on the property price: for properties priced at or below 2 million yen, it’s 5% plus consumption tax; for properties priced between 2 million and 4 million yen, it’s 4% plus 20,000 yen plus consumption tax; and for properties over 4 million yen, it’s 3% plus 60,000 yen plus consumption tax.
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- STEP 03Choosing the Right Location
- Location is a pivotal factor in Japan, where proximity to work, schools, public transportation, and neighborhood safety are key considerations. Urban areas like Tokyo and Osaka offer different living experiences compared to rural or suburban settings. The choice significantly impacts lifestyle, commuting times, and property prices.
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- STEP 04Finding a Real Estate Agent
- The complexity of the Japanese real estate market often necessitates hiring a knowledgeable real estate agent. A good agent can provide invaluable assistance in navigating legal requirements, language barriers, and cultural nuances. They play a critical role in finding properties, negotiating prices, and understanding local market trends.
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- STEP 05House Hunting
- Exploring properties is an exciting phase. It’s important to inspect various aspects like the property’s age, earthquake resistance (especially important in Japan), and potential renovation needs. Open houses and private viewings are common practices. We will provide general information such as the age of the real estate, earthquake resistance, any renovations, and other relevant details.
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- STEP 06Making an Offer and Closing the Deal
- Once a suitable property is found, the buyer makes an offer. If accepted, the process moves to signing a sales contract. This phase involves paying a deposit (usually around 10% of the purchase price), and the buyer needs to secure financing if not already done.
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- STEP 07 Legal Procedures and Registration
- The final step involves legal checks and property registration. This includes verifying the property’s title, ensuring no outstanding mortgages or liens, and registering the new ownership. These procedures are typically handled by a judicial scrivener (shiho-shoshi) in Japan.
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- STEP 08Plan for ongoing contributions
Purchasing a house might seem like a way to avoid monthly rent, but the costs are not zero. In fact, there are several ongoing costs.
Living in a house incurs utility bills: The average utility cost for a single person is about 15,000 yen per month. These won’t apply if you’re away for an extended period, but basic fees still apply, so temporary or complete suspension may be necessary.Fixed Asset Tax: Annually, it’s about 1.4% of the land and building’s assessed value.
Fire Insurance: Not mandatory, but recommended.
Renovations: If the house is in good condition, costs may not be significant. However, for aging properties, renovation costs can exceed 3 million yen. If you renovate yourself, costs may be lower. Buying a property cheaply, renovating it, and then reselling can lead to substantial profits.
Apartments or Condominiums: If you buy an apartment or condominium instead of a house, there are rules specific to that building. Additionally, you’ll need to pay monthly management and repair reserve fees, similar to rent. There might also be neighborhood association fees, which vary depending on the apartment or condominium, usually under 1,000 yen.
Conclusion
Buying a house in Japan can be a complex but rewarding process. It requires careful financial planning, understanding local market practices, and navigating legal procedures. With proper guidance and due diligence, owning a home in Japan can be an enriching experience, offering a unique blend of modernity and tradition. Please don’t hesitate to ask us if you have any questions. We can help you if you want to buy a house in Japan or your dream come true.