Buying Property in Japan: A Foreigner’s Essential Guide

Yes, foreigners can absolutely buy property in Japan. This might come as a surprise, especially if you're familiar with real estate markets elsewhere in Asia.

Unlike many of its neighbors, Japan places no restrictions on foreign ownership of real estate. That's right—you can own both the land and the building, outright. This open-door policy, combined with a historically weak yen, has created a compelling opportunity for international buyers looking to get into the market.

Is Now a Good Time to Buy in Japan?

To figure out if it's the right time for you to buy property in Japan, you have to look past the headlines and understand the unique rhythm of its market. For decades after the economic bubble burst in the early '90s, the market was pretty much flat. That's no longer the case.

Today's market is a different story entirely, marked by steady growth and a surge of interest from buyers both at home and abroad. This shift is creating a unique window of opportunity.

A Market on the Rise

After a long stretch of dormancy, Japan’s real estate sector is not just recovering; it's actively growing. The market size was valued at an impressive USD 436 billion as of 2024, and experts are projecting continued expansion.

You can see this momentum in the land prices. As of January 1, 2025, they saw an average nationwide jump of about 2.7%. This was the fourth year in a row with an increase and, more importantly, the strongest gain seen since 1991. That's a clear signal of renewed confidence in the market. Digging into Japan's real estate market trends can give you a much clearer picture of what's happening on the ground.

"The most powerful myth we need to bust is that foreigners can't own land. Not only can you own it, but you'll own it freehold, which is the most complete form of ownership. This is a game-changer compared to many other countries."

What This Means for Foreign Buyers

So, what’s making the current climate so favorable? The big one is the persistent weakness of the Japanese yen against major currencies like the US dollar. Put simply, your money goes a lot further here. A property that might have been a stretch a few years ago is suddenly much more accessible if you're converting foreign currency.

But it’s not just about the exchange rate. Here are a few other key factors to consider:

• Rock-Solid Stability: Japan is one of the world's most stable countries, both politically and economically. For a long-term investment, that security is invaluable.
• Incredible Quality of Life: Think world-class public transport, incredibly low crime rates, and fantastic healthcare. These aren't just perks; they make Japan a genuinely desirable place to live.
• True Ownership: This is a big one. Unlike in some countries where foreigners can only lease land, in Japan, you get full freehold title. You own the land and the building, forever.

To give you a balanced view, here's a quick rundown of the major pros and cons you'll face.

Pros and Cons of Buying Japanese Real Estate

Making an informed decision means weighing the good against the bad. This table breaks down what you really need to know before you start your property search.

Of course, challenges exist. Financing is often the biggest hurdle for non-residents, and the language barrier is a real consideration—the entire legal process is in Japanese. Understanding both sides of the coin from the very beginning is the key to a successful purchase.

So, How Do You Actually Find a Property in Japan?

Starting the hunt for a home in Japan is an incredible feeling. The market here is a fascinating mix—you can find hyper-modern condos in the middle of Shinjuku, or a classic old house nestled in a quiet country village. What's "ideal" really comes down to you and what you're looking for, whether that’s the energy of city life or a quiet escape.

First, let's get the language right. A modern apartment or condo is called a manshon (マンション). This is totally different from an apaato (アパート), which are usually older, two-story wooden buildings meant for rentals. If you want a standalone house, you're looking for an ikkodate (一戸建て).

Manshon, Ikkodate, or Akiya: What’s Right for You?

As you start your search, you'll see these three main types of properties pop up again and again. Each has its own personality and quirks, especially if this is your first time buying in Japan.

• Manshon (マンション): Think reinforced concrete condominiums, the kind you see all over urban Japan. They’re all about convenience, with modern features and building management that takes care of maintenance and security.
• Ikkodate (一戸建て): This is your classic detached house. With an ikkodate, the land and the house are all yours, which means total freedom. It also means you're on the hook for all repairs, upkeep, and property taxes.
• Akiya (空き家): These are vacant or abandoned homes, often found in the countryside or suburbs. You can find some amazing bargains, but they almost always need a lot of work.

The akiya situation is a really unique part of Japan's property market. Because of big shifts in the country's population, the number of empty homes has skyrocketed. The 2023 Housing and Land Survey reported a record 9 million vacant units, which is a staggering 13.8% of all homes nationwide. This has created some incredible opportunities for buyers who aren't afraid of a project. If you're curious, it's worth reading more about Japan's vacant home situation to see if it's a good fit for you.

Start Your Search on Japanese Property Portals

Like everywhere else, the search for a home in Japan almost always starts online. Even if your Japanese is a bit shaky, the big property portals are pretty easy to navigate with a browser's auto-translate feature. The two big players you need to know are Suumo and Lifull Home's.

These sites are your window into the market. Spend some time on them to get a feel for prices in different neighborhoods, see what kinds of places are available, and start saving listings to show your real estate agent.

An insider tip for browsing these sites: Always, always check the building's construction date. Any property built after June 1981 was required to meet much tougher earthquake resistance standards, known as shin-taishin (新耐震). For your own safety and peace of mind, this is a non-negotiable detail.

Why Your Real Estate Agent is Your Most Important Ally

Online portals are fantastic for browsing, but you simply cannot buy a property in Japan without a licensed real estate agent, or fudousan-ya (不動産屋). Their job is so much more than just unlocking doors for a viewing.

In Japan, your agent is your negotiator, your paperwork coordinator, and your legal guide. They are legally required to provide a formal "Explanation of Important Matters" before you sign anything. Since every official document will be in Japanese, finding a bilingual agent who has experience with foreign buyers isn't just a nice-to-have—it's essential.

A good agent is your advocate. They can get you access to off-market listings and share the kind of local knowledge you’ll never find online. Once you find an agent you click with, they become the MVP of your home-buying team, making sure you understand every single detail so you can move forward with total confidence.

Navigating the Purchase and Legal Paperwork

Alright, you've found the one. The property that checks all your boxes. This is where the real work begins, shifting from house-hunting to handling the nitty-gritty details of the purchase itself. The Japanese system is incredibly thorough and designed to protect everyone involved, but it can feel like a mountain of paperwork if you're not ready for it.

The first move is to make your interest official by submitting a Letter of Intent, known locally as a kaiuke shomeisho. Think of this less as a binding contract and more as a formal "dibs." It tells the seller you're serious and positions you as the primary negotiator, allowing your agent to start working on the final price and terms on your behalf.

This is the point where the process gets very structured. This visual gives you a great overview of the path from expressing your intent to finally getting the keys.

As you can see, it's a step-by-step journey with key professionals guiding you along the way, making sure every detail is buttoned up before moving forward.

Understanding the Most Important Meeting

Before you sign anything binding, you’ll sit down for what is arguably the most critical meeting in the entire process: the Explanation of Important Matters, or juuyou jikou setsumeisho. A licensed real estate professional is legally required to walk you through this document, which covers every conceivable aspect of the property.

This is your prime opportunity to get clarity. No question is too small. The document will detail things like:

• Title Registration Details: Who legally owns the property right now.
• Property and Land Descriptions: The exact boundaries, shared walls, and any access rights.
• Zoning Regulations: What you can—and more importantly, can't—do with the property.
• Building Management Rules: For apartments and condos, this covers everything from pets and renovation policies to monthly fees.
• Cancellation Provisions: The specific conditions under which either you or the seller can back out of the deal.

Treat this as your final due diligence. If you're worried about that new construction planned next door or have a question about a quirky rule in the condo bylaws, this is the time to bring it up.

The Role of the Judicial Scrivener

While your agent is your guide through the sale, another expert is crucial for the legal side: the judicial scrivener, or shihoshoshi. This legal professional handles the critical task of registering the property title in your name with the Legal Affairs Bureau.

They act as a neutral third party, ensuring the title is clean of any liens, all taxes are calculated correctly, and your ownership is officially recorded. You simply can't finalize a purchase without one. Your real estate agent will almost always have a trusted shihoshoshi they work with to manage the final settlement.

A key cultural point to understand is how earnest money is handled. The deposit, usually 5% to 10% of the purchase price, is often paid directly to the seller, not into an escrow account. This is a standard practice rooted in Japan's high-trust society and serves as a powerful symbol of your commitment.

Preparing Your Documents as a Foreign Buyer

Getting your paperwork in order ahead of time is the single best way to prevent delays. The exact requirements can differ based on your visa status, but foreigners generally need a few specific documents.

For a complete walkthrough of the entire transaction, you can find more detail in our comprehensive guide on https://www.mapdomo.com/blog/how-to-buy-property-in-japan.

If you live outside of Japan, your most vital document will be an affidavit. You can get this sworn statement from your home country's embassy or consulate in Japan, or from a notary public in your home country. It functions as your official proof of identity and address, taking the place of the certificate of residence (juminhyo) that Japanese residents use.

Essential Document Checklist

1. Passport: Your main form of photo ID.
2. Affidavit (for non-residents): This notarized document legally confirms your name, address, and signature.
3. Personal Seal (Inkan) or Signature: Signatures are widely accepted for foreign buyers now. While having a registered inkan (personal seal) was once common, it's much less of a strict requirement these days.

It might seem like a lot, but this is a well-established process. By understanding each step and knowing who does what, you can move through the paperwork with confidence.

Financing Your Purchase and Hidden Costs

When you start browsing property listings, it’s easy to focus on the big sticker price. But that number is really just the beginning of the story. The final figure you'll actually pay includes a handful of necessary fees and taxes that can catch unprepared buyers by surprise. Getting these on your radar from day one is the secret to a smooth, predictable transaction.

A good rule of thumb is to budget an extra 6% to 8% of the property’s value for these closing costs. For a ¥30 million home, that means setting aside an additional ¥1.8 to ¥2.4 million. It’s a significant chunk of change, so let’s break down where it all goes.

Breaking Down the Closing Costs

These aren't just random fees; each one covers a critical legal or administrative step in making the property legally yours. Think of them as the cost of ensuring your ownership is rock-solid and properly recorded.

Here are the main expenses you should expect to see:

• Brokerage Commission (Chukai Tesuryo): This is what you pay your real estate agent for their hard work. The standard formula is 3% of the property price + ¥60,000, plus consumption tax.
• Stamp Duty (Inshi Zei): A tax paid on the official purchase contract itself. The amount is tiered based on the sale price, running from ¥10,000 for properties between ¥10-50 million up to ¥60,000 for homes over ¥100 million.
• Registration and License Tax (Toroku Menkyo Zei): This is for officially registering the title transfer into your name. It’s a percentage of the property's assessed value and is paid to the judicial scrivener who handles the legal filings.
• Judicial Scrivener's Fee: You’ll need a legal expert to manage all the title transfer paperwork. Their professional fee typically lands somewhere between ¥100,000 and ¥150,000.
• Property Acquisition Tax (Fudosan Shutoku Zei): Don't forget this one! It’s a one-time tax from the prefectural government that usually shows up in your mailbox three to six months after you’ve moved in. It’s calculated as 3% of the building's assessed value and 1.5% of the land's assessed value.

A key thing to remember is that these taxes are based on the government's assessed value, not the market price you paid. This official valuation is almost always significantly lower, which definitely works in your favor.

The Big Hurdle: Securing a Mortgage

For most foreign buyers, this is where things get tricky. While Japan welcomes foreigners to own property without restriction, getting a loan from a local bank is a completely different ballgame. Your residency status is the single most important factor.

If you don’t have permanent residency (eijuken), getting a mortgage from a major Japanese bank is next to impossible. From their perspective, a lack of long-term commitment to Japan is a major risk, and your application will almost certainly be denied.

This tough reality means many non-resident buyers need to be prepared for a cash purchase. If that's not in the cards, you might explore securing a loan from a bank in your home country that handles international property financing, though that path has its own complexities. For a deeper look into the entire process, our guide on how to buy a house in Japan breaks down every stage in detail.

What Japanese Lenders Look For

For foreigners who do have residency status in Japan, the door to financing opens up, but you still have to meet some very strict criteria. Lenders will put your financial life under a microscope to make sure you're a low-risk borrower.

Here’s what they’re really looking at:

Some banks, like Prestia (SMBC Trust Bank), have a reputation for being more open to working with foreign clients, but even their standards are high. The best approach is to be realistic, get your financial documents in perfect order, and understand that the bar is set higher for non-Japanese applicants.

Closing the Deal and Taking Ownership

You’ve made it through the viewings, the back-and-forth of negotiations, and signing the initial purchase agreement. Now for the final hurdle: the closing meeting, known in Japan as the kessai (決済). This is where everything becomes official, and ownership finally changes hands.

This meeting is a well-orchestrated event. It usually takes place at your bank if you're financing the purchase, or perhaps at the real estate agent's office if it’s a cash deal. You'll be in the room with your agent, the seller and their agent, and the most important person of the day—the judicial scrivener.

The scrivener is in charge. They’ll meticulously verify everyone’s identity and give the final documents one last review before you sign everything needed to transfer the title.

The Final Payment and Title Registration

Once the paperwork is confirmed, it's time to make the final payment. You’ll transfer the remaining balance of the purchase price, plus all the closing costs you’ve calculated, directly to the seller's account.

This part is a masterclass in Japanese efficiency. As soon as the bank confirms the funds have landed in the seller's account, the judicial scrivener physically leaves the meeting and heads straight to the local Legal Affairs Bureau. Their job is to file the paperwork that registers the property title in your name, effective immediately.

This simultaneous process is designed to protect both you and the seller, ensuring the money and the title change hands at the exact same moment.

The second that scrivener files the paperwork, the property is legally yours. The seller will then hand over the keys, and you can finally celebrate. Congratulations!

Life as a New Property Owner

Getting the keys is a huge moment, but your journey as a homeowner is just beginning. There are a few key documents and ongoing responsibilities you need to be aware of as you settle in.

First up is your official title deed. It’s called a kenri-sho (権利証) or, in more formal terms, a toki shibetsu joho (登記識別情報). This is your ironclad proof of ownership. The judicial scrivener will mail this to you via registered post a couple of weeks after the closing day. Keep it safe!

Then come the recurring costs. Every property owner in Japan has these, so it’s best to budget for them from day one:

• Fixed Asset Tax (Kotei Shisan Zei): This is an annual tax from the local municipality, generally calculated at 1.4% of your property's assessed value (not the purchase price).
• City Planning Tax (Toshi Keikaku Zei): If your property is in a designated urban planning area—which many are—you’ll also pay this tax, which is around 0.3% of the assessed value.
• Building Management Fees (Kanri-hi): For anyone buying a condominium (manshon), this monthly fee covers the upkeep of common areas like lobbies and hallways, security, and any building staff.
• Repair Reserve Fund (Shuzen Tsumitatekin): Another one for condo owners. This is a mandatory monthly payment into a collective fund for major future repairs—think roof replacements, elevator overhauls, and exterior work.

It's also a smart move to keep a finger on the pulse of the market. Things can change quickly. For example, in March 2025, the average price for new apartments in the Greater Tokyo area skyrocketed to about 104.85 million yen, a massive 37.5% increase from the previous year. But just one month later, in April, the average in Tokyo’s central 23 wards had settled back down to around 90 million yen. You can find more up-to-date analysis on Japan's property market on Japan-Property.jp to stay informed.

Common Questions from Foreign Buyers

Even with a clear roadmap, specific questions always pop up, especially when you're navigating a new country's real estate market. This is where we tackle the most common uncertainties head-on, giving you direct answers to the things that might still be on your mind after learning the main process of buying property japan.

Think of this as your quick-reference guide. We’ll clear up the complexities around financing, ongoing costs, and the practical realities of making a purchase from overseas or as a resident foreigner.

Can I Get a Mortgage as a Non-Resident?

This is, without a doubt, the number one question I get asked, and the answer isn't a simple yes or no. Securing a mortgage from a Japanese bank without permanent residency (eijuken) is exceptionally difficult. From their perspective, non-permanent residents are a higher risk, which makes loan approval a significant hurdle.

For most non-residents, this means you should be prepared to be a cash buyer. While not entirely impossible, getting financing from a Japanese institution is a long shot.

However, there are a few avenues worth exploring:

• International Banks: Some banks with a global footprint, like Prestia (SMBC Trust Bank), are known to be more open to working with foreign nationals, but their requirements remain quite strict.
• High-Net-Worth Individuals: If you have significant assets, private banking divisions might offer more flexible solutions.
• Financing from Your Home Country: I've seen buyers successfully secure financing from a bank in their home country that was willing to lend against an overseas property.

If you have a work visa and a stable income in Japan but lack permanent residency, your options are slightly better but still limited. You can expect to face demands for a much higher down payment, often 20% or more, compared to what a Japanese national might pay.

What Annual Taxes Will I Pay?

Once you own the property, your financial obligations don't stop. As a homeowner in Japan, you'll be responsible for two primary annual taxes, which are conveniently billed together by the local municipal office.

The first is the Fixed Asset Tax (Kotei Shisan Zei). This is typically calculated at a rate of 1.4% of the property's officially assessed value. It's important to know that this assessed value is almost always lower than the market price you actually paid.

The second is the City Planning Tax (Toshi Keikaku Zei). This tax only applies to properties located within designated urban planning zones and is levied at a rate of around 0.3% of the assessed value. And, of course, if you decide to rent out your property, remember that the rental income is taxable and must be declared on your annual tax return.

Understanding the full financial picture is crucial. If you're planning to buy, it's wise to list out every potential cost. Our guide on the essential questions to ask before buying a home in Japan offers a helpful checklist to ensure you don't miss anything.

Do I Need to Speak Japanese?

While you could theoretically complete a purchase without speaking a word of Japanese, it would be incredibly risky. Every single legal document—from the initial offer to the final contract and the critical Explanation of Important Matters—will be exclusively in Japanese. Only the Japanese versions of these documents have any legal standing.

A simple misunderstanding can lead to serious financial consequences. To avoid this, you absolutely need a team you can trust implicitly.

This team should include:

1. A Bilingual Real Estate Agent: This person is your primary guide, translating and explaining every document and conversation.
2. A Trusted Translator: For critical meetings, having an independent translator can provide an extra layer of security.
3. A Knowledgeable Legal Advisor: The judicial scrivener handles the legal registration, and your agent will facilitate communication with them.

Some real estate firms specialize in helping foreign buyers and can provide these services in a single package, making the process much smoother.

Freehold or Leasehold: What Is the Difference?

This is a fundamental concept that directly impacts what you actually own. The great news is that the vast majority of property for sale in Japan is freehold (shoyuken), which is the most complete form of ownership you can have.

When you buy a freehold property, you own both the building and the land it sits on outright, forever. You can pass it down to your heirs or sell it without any time-based restrictions.

Leasehold (shakuchiken) is much less common, especially for residential homes. With a leasehold, you own the building but are only leasing the land for a fixed term, like 50 or 60 years. You'll pay ground rent to the landowner, and at the end of the term, the future of the property can get complicated. For true peace of mind and long-term security, always confirm you are purchasing a freehold property.

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