Cost of Buying a House in Japan｜How much do I need to prepare for buying a house in Japan? What are the initial costs? What is the cost of holding the property after purchase?

Can I apply for a loan to buy a house in Japan?

There are not many restrictions for foreigners to buy Japanese real estate in Japan! In some countries, you may have heard that foreigners only have the right of use or superficial right to purchase real estate in that country, or foreigners have many restrictions on the purchase conditions themselves, making it not easy to invest. In Japan, anyone, regardless of nationality, can own their own house and land as long as they pay fees and taxes properly. However, although there are no major restrictions on purchase eligibility in Japan, for investors who lack funds and need to apply for a loan from the bank, the Bank of Japan will not easily approve the loan without a permanent residence certificate, so in this paragraph, we will explain how to increase the chances of investors who do not have a permanent residence certificate in Japan to get a loan!

Japanese spouse guarantor

Some Japanese banks may offer mortgages to foreigners who do not have permanent residency. By having a spouse with Japanese or permanent resident status as a guarantor, you can increase your chances of applying for a mortgage. For applicable interest rates and details, please consult the financial institution that offers foreign mortgage loans.

Bank Loan in Applicant’s Country

If the bank of the loan applicant’s country has a branch in Japan, the probability of a successful loan application will increase! Banks that have established branches in Japan can track the loan history and loan status of loan applicants, and the terms of both parties are relatively clear and guaranteed, so the success rate of loan applications can also naturally improve. When Taiwanese apply for a loan, Taiwanese banks with branches in Japan have the following:

• Bank of Taiwan
• First Bank
• Megabank
• China Trust
• Changhua Bank
• Taishin Bank
• Yushan Bank

The conditions for loan applications are broadly as follows:

• Housing Age Within 20 years
• The winning bid price of a house is 35 million yen or more.
• Residential area of 50 square meters (about 15.125 tsubo) or more
• No grace period
• The loan rate is about 50-70%
• Annual income NT $1 million or more

Prepare for a larger down payment

If the loan applicant is a foreigner who is not a permanent resident, he will be subject to relatively strict screening criteria. Therefore, preparing a large down payment can prove to Japanese financial institutions that your income is stable and the probability of repayment is high, and it is also a good way to increase the probability of successful application.

Initial cost of buying a house in Japan

The initial fees to pay when purchasing a house in Japan are real estate brokerage fees, judicial scrivener fees, stamp duty, registration exemption fees, and real estate acquisition tax, which will be introduced in this paragraph.

Japanese real estate agent fees: Japanese real estate agent fees

The Japanese real estate brokerage fee is 3% of the total transaction amount +60,000 yen + consumption tax. Japan’s real estate buying and selling system is already quite mature, ensuring the process and interests of housing buying and selling through qualified intermediaries, ensuring that each stage is all in compliance with Japanese laws and regulations, helping consumers manage the eyebrow eyebrow corner corner of Japanese housing purchase that are easy to overlook!

Cost of buying a house in Japan: Judicial scrivener’s fee

Simply put, the cost of a judicial scrivener in Japan is the same as the cost of writing in Taiwan, and the content is to cooperate with both parties in the process of changing the name of real estate. On the other hand, the method of collecting fees for judicial scriveners in Japan varies depending on the regional market price, the content of the procedure, and the difficulty, and the approximate market price falls between 100,000 and 200,000 yen.

Cost of buying a house in Japan: stamp duty

Stamp duty is charged on real estate sales contracts in Japan. Please refer to the tax price by step in the figure below. If you buy 10 million yen real estate today, you will need to pay 20,000 yuan in stamp duty, but you must be especially careful because Japan is currently halving the price. Therefore, only 10,000 yen will be paid, and this preferential measure is scheduled to be implemented until 2027.

Contract amount		Original tax amount	Privilege relief
Real estate transfer agreement	Construction contract
100,000 ~ 500,000 yen	1-2 million yen	400 yen	200 yen (-50%)
500,000 yen to 1 million yen	2-3 million yen	1,000 yen	500 yen (-50%)
1-5 million yen	3-5 million yen	2,000 yen	1,000 yen (-50%)
5-10 million yen		10,000 yen	5,000 yen (-50%)
10 million yen to 50 million yen		20,000 yen	10,000 yen (-50%)
50 million yen to 100 million yen		60,000 yen	30,000 yen (-50%)
100 million yen to 500 million yen		100,000 yen	60,000 yen (-40%)
500 million yen to 1 billion yen		200,000 yen	160,000 yen (-20%)
1 billion yen to 5 billion yen		400,000 yen	320,000 yen (-20%)
5 billion yen or more		600,000 yen	480,000 yen (-20%)

Source: Ministry of Land, Infrastructure, Transport and Tourism

Cost of living in a Japanese house: Login permission free

When purchasing real estate in Japan, the purchaser registers the ownership of the land or building, which is a procedure that shows the ownership of the land or building to the outside world. The registration exemption fee is a fee incurred in the process of transferring this registration, and the calculation method is calculated by multiplying the assessed value of land and buildings (fixed property tax assessed value) by the tax rate. The calculation method varies depending on the type of registration, with 2% for land ownership transfer, 0.4% for new housing and 2% for second-hand house transfer.

Cost of Purchasing a House in Japan: Real Estate Acquisition Tax

Real estate acquisition tax is one of the taxes that must be paid when acquiring real estate in Japan. It includes the purchase, gift or construction of land or houses, and is paid regardless of whether registration is completed or not. However, in some cases, such as inherited real estate, you may not pay this tax.

The real estate acquisition tax amount is calculated as the tax base x the tax rate, and the tax base adopts the official appraisal price rather than the price at the time of actual sale, so it is lower than the market price. The tax rate was normally 4%, but due to the introduction of tax incentives in Japan in 2027, it was reduced to 3%, and it is not necessary to meet other conditions, and it is possible to apply for land or houses.

Cost of Owning a Home in Japan

After successfully purchasing Japanese real estate, the most important information of interest is the cost of ownership after purchasing the house! In this paragraph, we will introduce the cost of ownership after purchasing a house in Japan. Property tax, city planning tax, repair reserve, building management fee, and rental agency management fee.

Property tax

Fixed assets are land and houses, and the owners must pay fixed property tax on January 1 each year. Since the general tax rate is 1.4%, the tax amount is calculated by the government’s appraisal value of fixed assets × 1.4%.

City planning tax

Real estate owners in areas with city plans in Japan must pay city planning tax, and the tax rate is set by each municipality, but it does not exceed 0. 3% by law, so the tax calculation method can be calculated by the government’s assessed value of fixed assets x 0. 3%.

Repair reserve

Repair reserve Now also known as repair reserve, it means the money a landlord pays to the community management board every month, which is used for building maintenance work, such as replacing exterior walls, public repairs and elevator maintenance.

Building management fee

Building management fees are money that homeowners pay to the local management board each month and are primarily used to pay for property management, cleaning costs, and public hydroelectric power.

Lease escrow fee

The fee situation of agency rental escrow of each management company is different. The main fee items of an agency rental escrow company include rental management fees (generally 5% of the monthly rental fee + consumption tax), management and repair fees, agency payment management and repair fees, and remittance fees. It is advisable to understand the strengths and weaknesses of the company from multiple aspects before deciding.

Lazy bag of home purchase cost in Japan

Initial cost of buying a home
Name	Calculation method	Remarks
Real estate brokerage fee	Total 3% + 60,000 yen + consumption tax
Judicial scrivener fees	There is a fee for each case, but it is usually 100,000 to 200,000 yen.
Stamp duty	Calculate based on house prices	Tax relief until 2027
Login Free	Land ownership transfer registration 2%, new housing registration 0.4%, used housing transfer registration 2%
Real estate acquisition tax (Local tax)	Tax base x 3%	Tax relief until 2027
Home purchase and ownership cost
Name	Calculation method	Remarks
Property tax (Local tax)	Government valuation of fixed assets x 1.4%	Disposable
City planning tax (Local tax)	Government valuation of fixed assets x 0.3%	Disposable
Repair reserve	According to the regulations of the Management Committee	Pay monthly
Building management fee	According to the regulations of the Management Committee	Pay monthly
Lease escrow fee	Based on the company’s management regulations	Based on contract term