You’ve been considering buying property in Japan, but up until now, it may have seemed like a pipe dream. Where do you start looking? Can you get a mortgage? And more importantly, can foreigners buy property in Japan?
Well, the answer is yes! You can. It may require a little bit more work than buying the house just down the street, but it is most definitely possible.
In this article, we’ll provide you with all of the answers you need, as well as some very handy tips to secure your dream akiya in Japan. Are you ready to find out more? Read on to discover how your Japanese dream is possible.
Can I Buy A Property In Japan?
Japan is not only considered one of the most developed countries in APAC, but it is also one of the most popular investment locations for international property buyers. This was proven in 2019 when an estimated 2.93 million ex-pats were living in Japan.
This incredibly liveable country is the perfect destination if you are looking to get the most for your money, or even if you are simply looking for vacation and rental properties. But don’t be fooled. Buying property here definitely comes with its challenges.
The good news is that when it comes to purchasing property or land in Japan, foreigners have nearly the same rights as citizens of Japan. The really good news? There are no extra taxes you’ll have to pay either.
What Should I Consider Before Buying A House?
Buying Property In Japan Won’t Give You A Visa
The residency process in Japan is the same, whether you own a property or not. But on the plus side, you don’t have to have permanent residency to purchase a property, which you can still do even on a tourist visa.
The only downside is that you will be limited when it comes to the amount of time you are allowed to spend in the country. Officially, the limit is 180 days per calendar year, however, it can vary slightly from person to person.
The Language Barrier
Most sellers in Japan do not speak English, so unless you can speak and understand the language, your options will be limited.
However, there are estate agents who will always be on hand to negotiate terms and communicate issues on your behalf. This does come at a cost, so bear this in mind when looking for property.
Taking Care Of Your Property
Unless you have permanent residency, you will likely be spending some time away from your home in Japan and will therefore need someone to look after it for you.
Luckily, there are companies set up to do this exact thing for you but just remember to factor this into your overall budget.
How To Get A Loan/Mortgage
To qualify for a mortgage, you have to fall into one of the following categories; you must hold permanent residency status in Japan, or you must have a spouse who is a Japanese citizen/permanent resident.
If you fall into the latter category, your spouse will be required to sign the contract as a joint guarantor.
Foreigners and Japanese nationals must also meet the following criteria:
- Must be aged between 20-65 years old, and pay the entire loan off before reaching the age of 80.
- Must be in full-time employment or contract work for at least 2-3 years.
- Your yearly income must be at least 3-5 million yen (roughly $26,000 – £43,000).
- Must own a group credit life insurance.
You must also ensure that the property you are interested in purchasing was built in accordance with the Building Standard Act and that it comes with land ownership. This is a very important point to check when browsing for properties.
Depending on which bank you decide to take your mortgage/loan out with, they may also require you to be fluent enough in Japanese to understand your contract details and discuss them.
You should also be able to write your name and address in Japanese. If you can’t, then your loan/mortgage options may become limited.
The Buying Process
Step 1: Online Search
To discover properties you will have to do a lot of the research through independent estate agents as Japan doesn’t have one single database to manage all real estate.
You’ll come across a lot of bargains and should quickly be able to gain an understanding of which estate agents are best suited to your needs. You should also keep an eye out for any English-speaking realtors which will make the process much easier for you.
Step 2: Visit The Property
With estate agents only updating their properties once or twice a month, make sure you get in touch to check if your shortlisted properties are still available. If so, the next step is to arrange a visit.
It may be a long way to travel to view a property, but checking it in person allows you to see any issues that may be kept hidden from you as well as the neighborhood. Writing a checklist beforehand of what to look out for is a great way to make sure everything is covered.
Step 3: Make An Offer
If you’re happy with everything you’ve seen, the next step is to make an offer. Your estate agent will provide you with a purchase application form to submit to the seller which includes your offer price, payment method, and any sale conditions you might have.
This is typically a relatively painless process, however, there may be a bit of back and forth regarding specific terms.
Step 4: Signing The Contract
Once your offer is accepted it’s time to sign your contract. You will need to gather the following documents at this point which can differ depending on your residency status.
For those with residency in Japan you’ll need:
- Residence card
- Certificate of residence
- Seal/certificate of seal
For those without residency:
An affidavit from your home country’s government
Step 5: Payment & Receiving Keys
The final sum of the property sales price will be paid to the seller and the keys will be handed over to you. As well as keys, you’ll also receive all the documents that come with the property including any warranties, instruction manuals, and any management rules.
The estate agent will provide you with all other information you need to know regarding your property and any necessary tax documents will be sent to you from the tax office.
One important thing to note is that if you don’t have residency and are not planning on living in your property permanently, you have to abide by the ‘Obligation of Notification due to the Foreign Exchange and Foreign Trade Control Act’.
You only have 20 days to fill in one of these forms and notify the Minister of Finance via the Bank of Japan so getting this done straight away is important.
Owning a property in Japan may have once seemed like a short-lived dream, but as this article points out, it can most definitely be done.
With thorough research, a clear idea of what you want, and the ability to communicate with estate agents and sellers, you will be owning your very own slice of Japanese heaven before you know it.