Are you drawn to Japan’s rich culture and stable property market?
The dream of buying a house or property in Japan can be yours, but the journey involves navigating unique property laws, taxes, and processes tailored for foreigners.
This comprehensive guide will walk you through each step, equipping you with all you need to make a confident purchase in Japan.
Japan’s real estate market has grown, particularly in Tokyo, Osaka, and Kyoto.
Source: Global Property Guide & Land Institute of Japan
According to Global Property Guide and Land Institute of Japan's data, as of Q1 2024, the nationwide residential property price index rose 2.65% from a year earlier, although inflation-adjusted prices remained steady.
Japan remains one of the few countries with robust property market conditions due to the yen’s depreciation and low interest rates, offering unique opportunities for foreign investors.
Yes, foreigners can buy houses and land in Japan, as there are no legal restrictions on property ownership.
Both real estate ownership and the purchase property process are transparent, with the same legal procedures applying to locals and non-Japanese buyers.
However, buying property does not grant a permanent resident status or a Japan residence visa.
Japan is one of the few Asian countries where foreigners buy property on a freehold title basis, making it highly attractive to foreign investors.
Owning property here, such as a house or land, offers the potential for capital appreciation, mainly in lifestyle destinations like Niseko and Hokkaido.
When acquiring land, you can buy on a freehold or a leasehold basis.
Freehold ownership, or Shoyuken (所有権), is ideal for long-term investors as it includes land and property ownership. You gain complete control, allowing you to sell, gift, or lease the property without restrictions. This option, however, requires paying property and urban planning taxes regularly.
Leasehold, or Shakuchiken (借地権), gives you rights to the building but not the land it sits on. This arrangement can be typical in dense urban zones, offering a more affordable entry point but requiring ground rent to be paid to the landowner. Leasehold rights can also vary:
| Ownership Type | Freehold |
| Initial Cost | Higher |
| Control Over Land | Complete control (Permanent) |
| Long-Term Value | High |
| Taxes | Property, urban planning |
| Ideal For | Long-term investment, full autonomy |
| Benefits | Ownership of land outright
Profit from land appreciation Faster buying process |
| Drawbacks | More expensive
Higher property taxes Additional purchase costs |
| Ownership Type | Leasehold |
| Initial Cost | Lower |
| Control Over Land | Limited control (ranging from 30 to 99 years) |
| Long-Term Value | Moderate |
| Taxes | Ground rent, lease taxes |
| Ideal For | Short-term investment, lower entry costs |
| Benefits | 30-40% cheaper than freehold
No property tax Higher rental yields |
| Drawbacks | Monthly rents to the landowner
Harder to resell Sometimes, applying for property loans is more challenging, making it harder to purchase property. |
Several factors back the appeal of Japan’s real estate market:
Japan’s property market varies widely based on location, property type, and size.
Here are the average prices of 70-80 square meter apartments in key cities:
| City | JPY Price | USD Price |
| Tokyo | ¥70 million | $686,000 |
| Kyoto | ¥62.2 million | $568,000 |
| Yokohama | ¥47.4 million | $433,000 |
| Osaka | ¥42.6 million | $389,000 |
| Fukuoka | ¥37.1 million | $338,000 |
| Hiroshima | ¥35.5 million | $324,000 |
| Sapporo | ¥35.3 million | $322,000 |
| Sendai | ¥34.2 million | $312,000 |
Source: Tokyo Portfolio, price subject to change
In major cities, smaller apartments may range from ¥50-100 million ($455,000-$910,000 USD), while larger homes in desirable locations can exceed ¥100 million ($910,000 USD).
Buying property as a foreigner in Japan involves specific legal and regulatory steps.
Here’s a streamlined step-by-step guide:
Begin by defining your budget and investment goals.
Utilize Japan-coverage property platforms like Juwai Asia and IQI to explore options.
Popular real estate locations for foreign investors include Tokyo for high returns and Kyoto for cultural appeal.
For such a big decision as buying property in Japan, a qualified real estate agent can guide you through local market norms and the purchase process.
A local real estate agent can assist with legal safety documentation translations, property requirements, and the buying process.
There are many aspects they can help you with, including:
Your second step should always be consulting an agent and outlining your preferred location, property requirements, and budget.
This will require signing a commission agency/broker agreement.
The brokerage commission in Japan is 3%.
To find a real estate agent, you can:
Submit an LOI to the seller to formalize your intent to buy. Although non-binding, it establishes terms.
Seek pre-approval from banks like SMBC Trust or UOB, which cater to foreign investors with various financing options.
If you are buying a new house or condo, you'll need to fill out an Application to Purchase (購入申込書, kounyuu moshikomisho) created by the developer or real estate company.
For new properties, a lottery is often carried out depending on the number of applications received, so please consider the chance that your offer to purchase may not be accepted.
There is an application fee of up to ¥100,000.
If you are buying a pre-owned residence, you may like to submit a Letter of Property Purchase Intent (買付証明書, kaitsuke shoumeisho) to the seller.
This document shows your seriousness about purchasing real estate in Japan.
Once you've defined your preferred location and property requirements, it's time to shop around.
Arrange a professional inspection. In Japan, inspections cover aspects like structural safety, earthquake resilience, and pest control.
Reviewing the Explanation of Important Matters document is crucial, as it outlines all property details, restrictions, and potential risks.
Source: Leon Works
Before finalizing your purchase agreement, review the Explanation of Important Matters, which details any existing mortgages and other legal concerns.
This vital document ensures you're fully informed before proceeding.
The Explanation of Important Matters (重要事項説明書, juuyoujikou setsumeisho) is one of the most important documents that you should review carefully before you finalize the purchase.
As a legal disclosure document prepared by the seller’s agent, it is supposed to contain all of the information any buyer would need to make an informed purchase decision, for instance:
Under Japanese law, this comprehensive document, often 20 – 100 pages, must be delivered to the buyer (and also explained verbally) before the buyer executes the purchase agreement.
The next step is to sign a purchase agreement and pay a deposit, known as earnest money (手付金, tetsukekin), to the seller.
Sign the Purchase and Sales Agreement (PSA) after both parties agree to the terms.
Freehold contracts in Japan are non-negotiable once signed.
This legally binding document should include all necessary information, such as the registration certificate, down payment terms, and inspection report findings.
Some of the documents and information to include are:
Seal the deal: The Japanese use a seal to stamp official documents to verify personal or business transactions.
Then, pay a down payment, typically 5-10% of the property price. Japan lacks escrow services, so funds may go directly to the seller or held by your agent.
Getting a home loan in Japan can be challenging for foreigners, especially if you're not a permanent resident.
However, some Japanese banks offer loans to foreigners with permanent residency status or those married to Japanese citizens.
When you’ve submitted your Letter of Intent, it’s time to negotiate your loan options with your bank.
The bank will make an individual assessment of your records and request documents, such as:
Remember that it is difficult for foreigners to get a property loan in Japan unless they are permanent residents. We will discuss the details later in this article.
The final settlement typically occurs at your bank and involves a judicial scrivener (司法書士, shihoushoushi).
Complete the payment balance, pay the final fees, and sign the transfer documents. At this stage, the property officially transfers to your ownership.
When purchasing property in Japan, you must account for various costs, including the acquisition, property, consumption taxes, etc.
Understanding Japan’s tax obligations is essential to avoid unexpected expenses.
Engaging a local real estate agent or company can help you navigate these expenses.
| Taxes and Fees | Description |
| Real Estate Acquisition Tax (不動産取得税, fudōsan shutoku zei) | A one-time tax of 3% on residential land/building purchases, applied within six months to a year post-purchase |
| Registration License Tax (登録免許税, touroku mankyozei) | Charged at 2% of the property’s assessed value, this fee covers the transfer of property ownership registration. Reductions apply for new acquisitions. |
| Annual Fixed Asset Tax (固定資産税, kotei shisan zei) | Property owners are taxed annually on January 1st at approximately 1.4% of the property's assessed value, determined by location, size, condition, and market trends. |
| City Planning Tax (都市計画税, toshi keikaku zei) | A tax of 0.2% to 0.4% of the property's value is imposed to support city planning incentives. |
| Stamp Duty (印紙税, injizei) | Stamp duty ranges from ¥10,000 to 480,000 depending on the property’s value:
Up to 10,000 JPY for a property valued between 10 million to 50 million JPY Up to 60,000 JPY for a property valued between 100 million to 500 million JPY |
| Consumption Tax (消費税, shōhizei) | applied to newly-built properties, is 10% of the building cost (land is exempt) |
| Judicial Scriveners Fees |
JPY 100,000 and JPY 150,000 |
Source: Mailmate & E-housing, taxes and fees are subject to change
Securing a home loan in Japan as a foreigner can be easier if you have permanent residency or are married to a Japanese citizen.
Japanese banks also offer loans to those with long-term employment in Japan.
If you’re a non-resident and require financing, we recommend looking for a bank in your home country with local branches in Japan.
These banks will conduct a personal assessment and check your:
Next, decide whether you want a fixed- or variable-interest loan. Fixed-interest loans are favorable in Japan because interest rates are at historic lows.
Foreigners may be eligible for home loans from Japanese banks, especially if they hold resident status. Here are some options:
Japanese trust banks extend home loan offerings to residents of Japan.
| Bank | SMBC Trust Bank PRESTIA |
| Max LTV | Depends on residence status |
| Currency | JPY |
| Term | Up to 30 years (must be repaid by age 80) |
| Amount | ¥10,000,000 – ¥500,000,000 |
| Requirements | Resident status required |
A Korean commercial bank that has been operating in Japan since 1986.
| Bank | SBJ (Shinhan Bank Japan) |
| Max LTV | up to 60% |
| Currency | JPY |
| Term | 25 years |
| Amount | Min. ¥20,000,000 |
| Requirements | Investment purposes |
Japanese financial institution with English language services
| Bank | SBI Shinsei Bank |
| Max LTV | Inquire |
| Currency | JPY |
| Term | 35 years |
| Amount | ¥5,000,000 – 300,000,000 |
| Requirements | Japanese citizen or permanent resident (conditions apply for non-permanent residents – spouse must be a Japanese national or permanent resident and will be appointed mortgage guarantor). |
A multinational bank headquartered in Singapore, founded in 1935, operates in 19 countries, including the United States, Australia, Canada, and Hong Kong.
It is ideal for overseas investors as no Japanese residency is required.
Currently, it offers the most extensive international property loans for the Kanto, Kansai, and Kyushu regions (Tokyo, Yokohama, Kyoto, Osaka, and Fukuoka).
| Bank | UOB (United Overseas Bank) |
| Max LTV | up to 70% |
| Currency | JPY or SGD |
| Term | up to 35 years |
| Amount | min. $200,000 |
| Requirements | Investment purposes |
A leading global bank headquartered in Beijing and state-owned, it offers home loans through its Japan branch to both Chinese and foreign nationals.
Loan eligibility is evaluated case-by-case basis, with factors such as Japanese residency considered.
| Bank | Bank of China (BOC) |
| Max LTV | up to 50% |
| Currency | JPY |
| Term | up to 20 years |
| Amount | Consultation required |
| Requirements | N/A |
The bank is headquartered in Taipei and offers commercial banking services in North America, Europe, and Asia.
| Bank | Bank of Taiwan |
| Max LTV | up to 70% |
| Currency | JPY |
| Term | Inquire |
| Amount | ¥30,000,000 – 100,000,000 |
| Requirements | N/A |
Orix, a Japanese investment bank with a global presence in 24 countries, provides overseas real estate loans for residential and commercial properties in Greater Tokyo and Osaka.
These loans are suitable for both personal and investment purposes.
| Bank | Orix |
| Max LTV | Up to 70% of the purchase price or 100% of Orix’s valuation (whichever is lower) |
| Currency | JPY |
| Term | Up to 15 Years |
| Amount | min. ¥30,000,000 |
| Requirements | Hong Kong citizen (ID holder) or own a Hong Kong-incorporated company |
OCBC, a Singaporean multinational bank with a strong presence in the Asia-Pacific region, operates branches in Thailand, Hong Kong, and Malaysia, and it provides overseas property loans for newly constructed properties in Tokyo.
| Bank | OCBC (Oversea-Chinese Banking Corporation, Limited) |
| Max LTV | Up to 70% (JPY), up to 60% (SGD) |
| Currency | JPY or SGD |
| Term | Up to 30 years |
| Amount | ¥25,000,000 or S$200,000 |
| Requirements | Singaporean national, Singaporean PR, Singaporean resident |
Source: Housing Japan, value subject to change
These areas offer higher property prices but deliver reliable rental yields, particularly in centrally located apartments.
The rental yield in Tokyo’s districts averages 4.17%, with occupancy rates above 96%.
Rural properties are more affordable and attract buyers seeking cultural immersion or vacation rentals.
However, they may have slower appreciation rates and limited rental demand.
Yes, Japan places no restrictions on foreign property ownership, even for land.
Freehold ownership indefinitely includes the property and land, while leasehold offers building rights but requires ground rent.
Taxes like the acquisition tax (3%) and annual fixed asset tax (1.4%) apply equally to all owners, local or foreign.
Rental yields vary but average 4.4% in Tokyo and can reach 5-10% in cities like Fukuoka and Sapporo.
Some banks like SMBC Trust provide loans to non-residents, though requirements may differ.
Agents in Japan charge 3% of the property price plus additional fees.
After purchase, register with the local government office and pay registration and license taxes to finalize ownership.
Japan’s real estate market holds unique opportunities for foreigners, offering potential returns and cultural connections.
You can secure a profitable and satisfying investment by navigating the property laws, taxes, and financing options.
Let us provide comprehensive support throughout your real estate transactions in Japan. Fill in the form below to start your journey to property ownership in this incredible country.
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