We would like to share with you some frequently-asked questions when considering to buy a property in Japan. Hope this will give some helpful information.

image2.jpg

Q1. Do I need to buy insurance for my Japanese property?

Ans: In general, Japanese will usually buy fire insurance for their properties which is equal to the home insurance in Hong Kong. A 5-year fire insurance and earthquake insurance [1] cost around JPY¥100,000 - 150,000.

Q2. Can foreigners buy property and land in Japan?

Ans: Yes. Currently, there are no Japanese laws or legal restrictions on buying a property in Japan for foreigners. In fact, the same rules and legal procedures apply to both Japanese and non-Japanese buyers.

There is no need to possess Japanese citizenship or residency to buy a house in Japan. However, buying a property in Japan will not grant the purchaser a Japan residence visa.

On 26 March 2021, Japan’s parliament enacted Land Use Restriction Bill. Increase of land purchases (by foreigners) in Hokkaido and remote islands, has been an issue in the recent years. [2]

Q3. What is the percentage of mortgage I can apply for purchasing Japanese property?

Ans: Foreign investors can apply for 50 - 60% mortgage. The interest rate can be as low as 2.7% per annum and loan period can be maximum 20 years. (Terms and conditions may vary by time.)

Here are references from a few financial institutes:

  • UOB - International Property Loans [3]

  • PRESTIA (SMBC Trust Bank Ltd.) [4]

Q4. What documents are necessary when buying a property in Japan?

Ans: An affidavit must include your name, address, date of birth, nationality, and signature. Furthermore, the document must be notarised.

Q5. Joint Ownership of real estate in Japan? [5]

Ans: You will need to decide whether to own the property fully in your own name, or jointly with a spouse or partner when purchasing Japan real estate. The share of ownership will be stated on the property title.

It is very important to consider the ratio of ownership. Adding the wrong ratio could result in a tax bill for one or both parties. The ownership ratio must accurately reflect the funds shared by each party contributed to the purchase of the property. It’s not advisable to have a 50/50 share if one party only contributed 1% to the purchase as this would be considered as a gift to the tax office and the recipient is liable for the gift tax.

image1.jpg

Q6. How are property rights registered? [5]

Ans: From the day of settlement, the ownership will belong to the buyer. However, before the keys are given, the Judicial Scrivener (who will be on the day of closing) will have to register the owner and property in documents such as the Certified Copy of Registry.

Q7. What are L, D, K stand for on the layout?

Ans: L (Living Room), D (Dining Room), K (Kitchen)

Q8. What is the average real estate agent fee?

Ans: The maximum real estate agent fee is 3% + ¥60,000. Most agents abide by this amount.

Should you wish to find out more about investing in off-plan properties in Japan (Osaka), our friendly consultants will be happy to have a thorough discussion session with you. Simply leave your details in the form below and we will arrange a call-back for you.