5 Common Questions Overseas Buyers Ask About Purchasing Property in Tokyo

I receive a wide range of questions from international clients considering buying property in Tokyo. In this article, I answer five of the most common questions, together with some practical points that overseas buyers should understand before beginning their property search.

1. Can Foreigners and Non-Residents Buy Property in Japan?

Yes. In principle, foreign nationals and non-residents can purchase land, houses and condominiums in Japan, and permanent residency is generally not required.

However, owning property does not give you the right to live in Japan. Property ownership and immigration status are separate, and purchasing real estate does not grant a visa or permanent residency.

2. Can I Obtain a Mortgage in Japan?

Some Japanese lenders accept mortgage applications from foreign nationals without permanent residency, although the available options are more limited and lending criteria vary.

Banks typically assess the applicant’s residency status, income earned in Japan, employment history, Japanese-language ability, available funds, credit profile, and the property’s type and value.

Financing also depends on the property’s intended use, as primary-residence, second-home and investment-property loans have different criteria. Non-residents living overseas have far fewer financing options and may be required to contribute more of their own funds. In some cases, a cash purchase may be the most practical option.

3. Can I Complete the Purchase Without Coming to Japan?

In many cash-purchase transactions, overseas buyers may be able to complete the process without travelling to Japan. I generally coordinate the following steps:

* Confirming the buyer’s objectives, budget and property criteria

* Introducing suitable properties and conducting live online viewings

* Investigating the property, building management and relevant legal matters

* Negotiating the price and other conditions with the seller

* Coordinating the contract, settlement, registration and transfer of ownership

Depending on the transaction, contracts and other documents may be signed overseas and returned to Japan. A judicial scrivener will also verify the buyer’s identity and prepare the documents required for registration.

However, requirements vary, and a visit to Japan may still be necessary in some cases, particularly when using a Japanese mortgage.

4. How Long Does It Take to Buy a Property in Japan?

Once a property has been selected and the seller has accepted the offer, a purchase agreement may be signed within 1–2 weeks in a straightforward transaction.

For a well-prepared cash buyer, settlement, handover and transfer of ownership may follow 2–4 weeks after signing the contract. The entire process can therefore often be completed within 3–6 weeks after the offer is accepted.

A mortgage purchase typically takes around 2 months, although the schedule may vary depending on the lender, the required documentation and the buyer’s circumstances.

5. What Additional Costs Should I Expect?

When purchasing a resale property through a real estate agent, buyers should generally budget an additional 7–9% of the purchase price for acquisition costs. The actual amount will vary depending on the property and the financing method.

Typical costs include:

* Real estate brokerage fees

* Stamp duty on the purchase agreement

* Registration and licence tax and judicial scrivener’s fees

* Real estate acquisition tax

* Fire and earthquake insurance

* Prorated adjustments for fixed-asset tax, city-planning tax, condominium management fees and repair reserve fees

When using a mortgage, bank administration fees, mortgage registration costs and other related expenses will also apply. Non-resident buyers may incur additional costs for international transfers, notarisation, translation, tax procedures and post-purchase property management.