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Buying Property in Japan as a Foreigner
Japan permits foreigners to own real estate without restrictions, but mortgages and tax incentives often require local residency. This guide explains your options based on your visa and tax status.
Quick summary
- Foreigners can own property freely — no residency required for purchase, no special permission.
- Mortgages: Permanent Resident (PR) or long-term visa typically required. Working visa holders may qualify with 3+ years employment history at most major banks.
- Total transaction costs: ~5-10% of purchase price (taxes, fees, agent commission).
- Annual property tax: 1.4% of assessed value + 0.3% city planning tax (if applicable) — lower than the US, similar to UK.
- Housing Loan Deduction: up to ¥273,000/year for 13 years (must be your primary residence) — available to foreign residents.
Who can buy?
- Anyone — Japan has no nationality or residency restrictions on property ownership.
- Non-residents (overseas): yes, can buy. But you'll need a Tax Representative in Japan to handle ownership tax matters.
- Working visa holders: yes, can buy. Mortgage availability depends on visa stability and employment history.
- Spouse of Japanese / PR: easiest mortgage access if Japanese spouse co-signs.
- Permanent Resident / Japanese citizen: full mortgage access at competitive rates (0.5-1.5% for variable, 1.5-2% for fixed).
Mortgages for foreigners
Banks vary widely in their foreign-friendliness:
| Bank type | Best for | Typical rate |
|---|---|---|
| Shinsei Bank / SBI Net Bank | English support, PR or 1+ year employment | 0.4-0.6% variable |
| SMBC Trust / Prestia | High-income foreigners, English service | 0.7-1.0% |
| Local banks (e.g., Suruga) | Risk-tolerant lending, higher rates | 2-3% |
| Mega-banks (MUFG, SMBC, Mizuho) | PR or Japanese spouse co-signer typically required | 0.4-0.7% |
Documents typically required
- Residence Card (Zairyu Card)
- My Number certificate
- Income certificates for 2-3 years (Gensen Choshu-hyo)
- Tax payment certificates (Nozei Shomeisho)
- Bank statements
- Resident Registration (Juminhyo)
- Health insurance card
- Property documents (sales contract, register copy, building permit)
Transaction costs (one-time)
| Cost | Typical amount | Who collects |
|---|---|---|
| Real estate agent commission | 3% + ¥60,000 (+ 10% tax) | Agent |
| Acquisition Tax (Fudosan Shutoku-zei) | 3% of assessed value (with deductions) | Prefecture |
| Registration Tax (Toroku Menkyo-zei) | 0.4-2% of assessed value | National (Ministry of Justice) |
| Stamp duty (Inshi-zei) | ¥10,000-60,000 on the contract | National |
| Mortgage origination fees | ~2% of loan amount | Bank |
| Mortgage life insurance (Dantai Shinyo) | Usually included in rate | Bank |
| Judicial scrivener fees | ¥100,000-200,000 | Scrivener |
Total: about 5-10% of purchase price in addition to the home price itself.
Annual ownership taxes
- Property Tax (Kotei Shisan-zei): 1.4% of assessed value. Land for housing gets 1/3 - 1/6 reduction.
- City Planning Tax (Toshi Keikaku-zei): up to 0.3% if in a designated urban planning area.
- Earthquake / Fire insurance: ¥30,000-100,000/year typically (often required by mortgage lender).
- Management fees (condo): ¥10,000-30,000/month for repair fund + management.
Housing Loan Tax Deduction
If you buy a property as your primary residence and have a qualifying mortgage, you can deduct from your income tax:
- Standard houses: 0.7% of outstanding loan balance × 13 years (max ¥182,000-273,000/year)
- Cert. low-carbon / long-life housing: higher limit
- Used homes: 10 years instead of 13
- Eligibility: must be your residence within 6 months of purchase, hold for 10+ years, annual income ¥20M or less
- Foreign residents: yes, eligible if you have Japanese income tax obligation and live in the home as primary residence
Selling property: capital gains tax
| Holding period | Tax rate |
|---|---|
| Under 5 years (Short-term) | 39.63% (income 30% + resident 9% + reconstruction 0.63%) |
| 5 years or more (Long-term) | 20.315% (income 15% + resident 5% + 0.315%) |
| Primary residence + 10+ years | 14.21% (with further reductions) |
- Primary Residence Exemption: ¥30M deduction from gain on sale of primary residence
- Reinvestment Roll-over: defer tax by buying another property within 1 year
- Non-resident sellers: 10.21% withholding tax at sale; reclaim excess via Tax Representative
Buying as a non-resident (from abroad)
- Allowed: yes, fully. No special permission needed.
- Bank account: very difficult to open as non-resident. Most buyers use a property management firm with their own escrow.
- Tax Representative (Nozei Kanri-nin): required to handle property tax, sale tax declarations.
- Mortgages: extremely limited. Most non-resident buyers pay cash.
- Rental income: 20.42% withholding tax at source; taxable in Japan with annual filing required.
When you leave Japan
- Selling before leaving: cleanest option; capital gains tax handled in Japan
- Rent out: appoint Tax Representative; rental income subject to Japanese tax
- Keep empty: still pay property tax + maintenance; risk if no caretaker
- If you owned 5+ years and lived in it: long-term capital gains rate + primary residence ¥30M exemption may apply
- Repatriating proceeds: use international wire (high fees) or Wise (cheaper). Report to home country tax authority if required.
Common questions
- Q. Can I get a mortgage on a working visa?
- Possibly. Shinsei Bank, SBI Net Bank, and some local banks lend to working visa holders with 1-3+ years of stable employment in Japan. PR or Japanese spouse co-signer makes it much easier.
- Q. Are condos a good investment?
- Tokyo central condos have appreciated significantly since 2014. Older single-family homes typically depreciate. Buy for your own use; investing in real estate is a separate skill set.
- Q. What about earthquake risk?
- Buildings constructed after 1981 (and especially 2000) have strict earthquake-resistant standards. Earthquake insurance is optional but recommended. Inspect for structural issues during purchase.