Nomae Expats
Wealth

Wealth — 4.2

Real Estate

Foreigners can buy property in Japan with fewer restrictions than nearly any other developed country. The mechanics are specific — and the opportunity is real.

None

Ownership restrictions for foreigners

2–4 weeks

Mortgage approval timeline

6–9%

Transaction costs

1.4%

Property tax rate (annual)

The Ownership Reality

Japan has no restrictions on foreign property ownership. You can buy land and buildings as an individual or through a corporation without any visa or residency requirement. This is unusual among major real estate markets.

The market has distinct characteristics worth understanding before making decisions:

  • Buildings depreciate in value rapidly — the standard 47-year depreciation schedule for reinforced concrete means a building's book value reaches zero. Land is what appreciates (in urban areas).
  • New construction commands a significant premium — and then depreciates immediately. For investment, buying established properties on land with strong fundamentals is typically superior.
  • Tokyo residential has been one of the better-performing major real estate markets globally over 2015–2025, primarily driven by land value appreciation in key wards.
  • Rural and regional properties can be acquired for prices that seem implausibly cheap — sometimes under ¥5,000,000. The catch is liquidity: exit is extremely difficult.

Buying as a Foreigner

What you need

  • Passport — no residency required for purchase
  • Registered seal or equivalent signature verification (foreigners use signature instead of hanko)
  • Japanese bank account — for the transaction flow
  • Tax ID (if resident) or Individual Number (if non-resident, arranged through tax representative)
  • A bilingual real estate agent or buyer's agent (necessary — all documentation is in Japanese)

Transaction costs (buyer)

CostAmountNotes
Agency fee3% + ¥60,000 + taxPaid to buyer's or seller's agent
Stamp duty¥10,000–600,000Based on purchase price
Registration tax0.4% (land) / 0.4% (building)At time of ownership transfer
Judicial scrivener (司法書士)¥100,000–200,000Handles title transfer
Real estate acquisition tax3–4% of assessed valuePaid 3–6 months after purchase
Fire/earthquake insurance¥100,000–300,000/yearStrongly recommended; earthquake coverage separate

Total transaction cost: 6–9% of purchase price. Budget the top end.

Mortgage Reality

Japanese mortgage rates remain among the lower end of developed markets, though BOJ rate hikes in 2024–2025 have moved them upward. Current ranges: approximately 0.5–2.0% for variable rate, 2.0–3.0% for fixed.

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Mortgage Reality

Japanese mortgage rates remain among the lower end of developed markets, though BOJ rate hikes in 2024–2025 have moved them upward. Current ranges: approximately 0.5–2.0% for variable rate, 2.0–3.0% for fixed. Confirm current rates with your lender — these shift with BOJ policy.

For foreigners, however, mortgage access is more restricted:

  • Permanent residence visa (PR) dramatically expands your mortgage options — most major banks (SMBC, Mizuho, Sumitomo Real Estate) require PR or a Japanese guarantor
  • Without PR: SMBC Trust Bank, SBI, and Suruga Bank have programs for non-PR foreigners, but with stricter income requirements and lower LTV ratios
  • Typical LTV: 70–80% for foreigners without PR; up to 90% with PR
  • Income documentation: 2–3 years of Japanese tax returns are typically required
  • Loan tenure: typically up to age 80. If you are 45 with a 35-year mortgage, the bank calculates repayability to 80.

The PR unlock

Obtaining Japanese Permanent Residency opens full mortgage market access. This is one of the concrete financial benefits of the PR path — not just a status symbol.

Urban vs Resort Property

Urban (Tokyo, Osaka, Fukuoka)

  • Strongest liquidity — exit market is active
  • Tokyo: Minato, Shibuya, Shinjuku wards have performed best historically. Price range: ¥50,000,000–200,000,000+ for a decent apartment in prime areas.
  • Rental yield: 3–5% gross in central Tokyo. After management fees, property tax, and vacancy, net yield: 2–3.5%.
  • New-build condominiums (マンション): convenient but depreciate quickly; established properties on smaller lots can offer better value
  • Pre-owned market (中古): significantly lower prices than new-build, especially for buildings over 20 years old. Often structurally sound — Japan's earthquake building codes are excellent.

Resort (Niseko, Hakone, Karuizawa)

  • Niseko: most liquid resort market in Japan, significant international buyer base. Hirafu Village has seen consistent appreciation. Price range: ¥30,000,000–200,000,000+ for ski-in/ski-out.
  • Rental yield: 5–10% gross during peak season (December–March). Off-season occupancy is the challenge.
  • Karuizawa: summer retreat town 70 minutes from Tokyo by Shinkansen. Upper-class Japanese buyer market dominant. Less accessible to foreigners without Japanese connections.
  • Hakone: strong domestic market, smaller international presence. Ryokan conversion opportunities for operators with hospitality interest.

Property Tax

Annual property tax (固定資産税) is levied at 1.4% of the assessed value (公示価格). The assessed value is typically 60–70% of market value, so the effective rate on market value is approximately 0.8–1%. Urban land taxes also include a city planning tax (都市計画税) of up to 0.3%.

Important

Japan's assessed property values (路線価, road-side land price) are publicly available and used for inheritance tax calculations. If you hold significant real estate, this figure will affect your estate planning — work through the implications with a tax advisor before purchase.

Consulting

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