Buying Guide

Steps for Purchasing Property in Japan

1. Finance

Speak to your bank about finance.  Housing Japan is able to help with introductions to expatriate friendly lenders.

2. Search

Get to know the market.  Spend time searching the web-site and talking to your agent about properties. Look at the recent sales and understand the values and relative prices of properties in your target range.

3. Inspections

The more you see the better you will understand the market and the easier it will be to make the decision to buy when you find the right property.

4. Application

When you find the right property submit an “application to purchase”.  This is a non-binding written expression of your interest to purchase the property at certain price. An application shows the seller you are serious and will start the negotiation process.

5. Explanation of Important Matters

Once the price is agreed your agent will start the contract process.  The agent is required to investigate the details of the property and provide you with an “Explanation of Important Matters”.  This document defines all the important terms of the contract.  You should read and fully understand this document before executing the contract.

6. Executing the Contract

The contract execution usually takes place at the agent’s offices and takes about 2 hours to complete.  It is typical to pay the owner a deposit of 10% or JPY 10 million at the time of the contract.

7. Loan Application

While you may have pre-approval from a lender, once the contract is complete you can make the formal loan application.  It usually takes a month to six weeks for final approval after which the final closing date can be set. If you using finance, the contract will have a clause saying that you are applying for a mortgage from a particular bank with a proposed approval date. If, for some reason, the mortgage is not approved the contract will be terminated at no cost.

8. Final Settlement

The final settlement usually takes place at the buyer’s bank and is handled by a judicial scrivener. The buyer will transfer the remaining balance to the sellers account and the title of the property will be transferred to the buyer. On completion the seller delivers all the keys to the property and the transfer of ownership is complete.

Summary of Transaction Costs and Taxes

1. Acquisition Tax (取得税)

Buyers of residential property are subject to one-time acquisition tax of 1.5% of the government valuation of the land and 3% of the value of the building. The government valuation is usually about 60-80% of the market price of the property. This tax is paid to the local government and is usually due within six month of the purchase.

2. Registration Tax (登録免許税)

The transfer of a property incurs registration tax.  Currently the tax is 2% of the government valuation of land and 1.3% of the value of the building. Registration Tax is also payable on mortgages at a rate of 0.4% of the loan amount.

3. Stamp Duty (印紙税)

Stamp duty is levied on the sale contract and mortgage agreement and varies on the contract type and amount.

4. Judicial Scrivener Fees (司法書士手数料)

The Judicial Scrivener acts like a solicitor to settle and register the property transaction.  The fees vary depending on the size and complexity of the transaction. As an indication, for a property of ¥100,000,000 the fee will be about ¥100,000

5. Agents Fees (仲介手数料)

Agent  fees are set at 3.15% of sale price + ¥63,000


For more information about buying property in Japan contact the sales division at Housing Japan.
+81 (0)3-3588-8861

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