Buying Real Estate in Japan: A Guide

Buying Real Estate in Japan: A Guide

Planning to purchase real estate either for private use or as an investment? What should you know about the inner workings of the real estate market?

Here's a comprehensive guide on what to know upfront.

Can a non-Japanese buy a property in Japan?

Non-Japanese can purchase land or property in Japan, and there are no visa requirements or citizenship requirements in order for you to make this purchase.

However, you cannot acquire a residence visa or investor visa by purchasing a property in Japan.

The same rules and legal procedures apply to Japanese and non-Japanese buyers alike.

Since the dollar is strong, it’s a good time for foreign nationals to buy real estate in Japan. Note: If you have permanent residence status, 20% of the real estate must be paid in cash. So, if you have cash abroad, it’s a good time to buy properties in Japan.

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Types of property that foreigners cannot purchase

There are two bills that restrict certain property purchases for specific land designations. These are as follows:

Property around Self Defence Force bases

The Japanese government imposed restrictions on the purchase of real estate by foreigners in March 2021 on the purchase of land around Self-Defense Forces locations, remote islands near the national borders, and nuclear plants in order to mitigate risk to Japan's national security.

Property designated as “forest” or “agricultural”

The Foreign Exchange and Foreign Trade ACT (FEFTA) prohibits foreign nationals from buying land with the destination of “forest” or “agricultural” without approval from the government.

Is investing in property in Japan a good decision?

It is possible for foreign nationals to invest in and buy property in Japan, even if they do not reside in the country. Many overseas investors opt for purchasing real estate in Japan to diversify their property portfolio and benefit from the country's stable economy and comparatively affordable property prices.

Foreign investors looking to buy property in Japan from outside the country should work with a local real estate agent or attorney who can help them navigate through the legal and financial aspects of the transaction. This may include securing financing from a Japanese bank or working with a guarantor company to obtain a loan. It is highly recommended that you build your team with a Japanese real estate agent as they can provide crucial assistance to your investment.

It's important for foreign investors to keep in mind the tax implications of owning property in Japan, as well as any fees or expenses related to managing the property from abroad. While cash is typically preferred in Japan, it may be necessary to obtain a mortgage in order to have enough funds to purchase a particular property.

Working with a reliable local professional can help foreign investors navigate these complexities.

How to find a Japanese real estate agent

When researching property in Japan, it is essential to seek advice from local real estate professionals to ensure legal safety, accurate documentation translations, advisory services on price levels, market trends, and transaction activities, property requirements, local knowledge about neighborhoods, assistance in property viewing, etc.

Enlisting a real estate agent will require drafting and signing a commission agency/broker agreement. Note: brokerage commission fees are on average 3% in Japan.

There are more than 120,000 real estate companies in Japan, yet only a few of these companies support real estate purchases by foreigners. Such companies are mostly based in Tokyo and some other major cities.

Asking a real estate company with experience in transactions with foreign nationals, as it is different from that with Japanese nationals. Agents are required to prepare extra documents and handle overseas remittances.

You can check online real estate platforms to find a real estate agent in Japan. You can also ask friends and other contacts you know or contact your Chamber of Commerce for recommendations.

Remember, choosing the right real estate agent can make a significant difference when investing in a property in Japan.

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What's the process for purchasing property in Japan? A step by step overview

Japan's real estate market presents unique practices and a distinct buying and selling process compared to other countries. This section will provide an overview of the industry, explain the role of real estate companies, discuss the use of network systems, and provide a step-by-step breakdown of the process for purchasing a newly built condominium apartment.

1. Find and contact a realtor

Here are some reasons why working with local real estate professionals is important.

  • Market knowledge—Local professionals have in-depth knowledge of the local market, including current trends, property values, and potential investment opportunities.

  • Legal expertise—They are well-versed in Japan's legal requirements and regulations governing real estate transactions. This ensures that your purchase is compliant with local laws and regulations.

  • Cultural understanding—Local professionals understand the cultural nuances that can impact real estate transactions, such as negotiation customs and local customs related to property ownership.

  • Property selection—They can help you find properties that match your specific investment goals, whether a residential property, commercial space, or an investment property for rental income.

  • Negotiation skills—Real estate professionals can negotiate on your behalf to secure possible deals, helping you avoid overpaying for a property.

  • Administrative assistance—They can assist with the administrative aspects of the transaction, including paperwork, permits, and coordinating with relevant authorities.

  • Network of contacts—Local professionals often have a network of contacts, including property developers, contractors, and legal experts, which can be invaluable during the buying process.

  • Risk mitigation—They can help you identify and mitigate potential risks associated with your investment, ensuring that you make an informed decision.

 When investing in property abroad, it’s essential to do thorough research and work with professionals who have a track record of success and a reputation for trustworthiness. By partnering with local real estate experts, you can increase the likelihood of a successful and financially sound property investment in Japan.

2. Consult with a bank

Consulting with a bank or a financial institution is a wise step when considering buying real estate for the following reasons:

  • Determine your budget—Talking to a bank can help you determine how much you can afford to spend on a property. They can assess your financial situation, including your income, credit score, and debts, to provide a clear budget range.

  • Pre-approval—You may also want to seek pre-approval for a mortgage or home loan. This pre-approval letter can be valuable when making an offer on a property because it demonstrates to sellers that you are a serious and qualified buyer.

  • Interest rates and loan options—The Bank can inform you about the current interest rates and various loan options available to you. Understanding the financial landscape can help you make informed decisions about your investment.

  • Negotiating power—When you know your financing options and have pre-approval, you have stronger negotiating power. Sellers may be more willing to work with buyers who have their finances in order.

  • Hidden costs—The Bank can advise you on any hidden or additional costs associated with buying a property, such as property taxes, insurance, and closing costs.

3. View and assess the property

Property features and standards in Japan are different from those in the US or Europe. For example, finding a house over 100 square meters with more than two bathrooms will be close to impossible.

4. Express your interest

Clearly express property purchase interest through sending a Letter of Intent or purchase application.

5. Negotiate with the seller

The next step is negotiation concerning the purchase price, etc. This can take from 7 days to 4 weeks.

6. Close the deal

Your real estate agent provides documents that include the title deed, description of the property, and provisions.

When purchasing a property in Japan, it is customary to make a cash deposit to the seller. This deposit typically amounts to 10% of the property's value and is paid to a third-party service, such as an escrow service.

Buyers purchasing real estate in Japan via a mortgage must pay a cash deposit.

7. Finalize the settlement

Once the final settlement has been reached, the transfer of ownership will take place at the buyer's bank, which is managed by a judicial scrivener. The buyer is required to pay the remaining balance to the seller's account, after which the property title will be transferred to the buyer. The seller will then deliver the keys to the property, signifying that the transfer of ownership is now complete.

Necessary documents for foreign residents of Japan purchasing real estate in Japan

If you are an expat living in Japan as a resident, the following are required documents to prepare in order to purchase real estate.

Certificate of residence

Check out our guide on how to obtain your certificate of residence, juminhyo.

Residence card (Zariryu Card)

Foreign nationals who live in Japan are required to have a valid residence card, which is called zairyu card. Buying property in Japan without a valid residence card is challenging for certain legal, financial and administrative requirements such as obtaining a tax identification number and registering the property with the local government.

Registered seal (Jitsuin)

A registered seal is used in place of a signature on official documents in Japan. So you will have to have a registered seal or jitsuin to buy property. The registered seal needs to be registered with the municipal office of a city, ward, town or village.

Certificate of seal impression (Inkan Shomei)

Once you register your seal, you can obtain a certificate of your seal impression (Inkan Shomei). This is similar to a notarized signature in the West.

Japanese Bank account information

Opening a bank account in Japan can be challenging for foreign nationals because of the language barrier and Japan’s strict banking document requirements. Still, foreign nationals can open one in Japan with the right preparation and documentation.

Few bank employees speak English fluently, and you will need to have a Japanese-speaking interpreter go with you to the bank when opening an account. However, there are some banks in Japan that provide services to foreigners, so they can conduct all business in English.


A valid ID such as a passport and driver’s license.

Bank loan information from a Japanese Bank

If you’re paying in cash, this is not always required.

The necessary documents for non-residents of Japan

 If you are not a resident of Japan, you will need the following documents for a real estate purchase in Japan:


You will need proof of address and a signature and must have it notarized by a notary public. An affidavit is a certificate that the writer of private documents signed by the writer has sworn that the description of the document is accurate and has a signature and affixed a seal obtained from the notary public.

 For example, an affidavit is used to prove the address of a non-resident in Japan and the signature of a person who hasn’t registered his or her seal. Affidavits need to be certified by a notary public in their home country but may also be certified by the consular section of their country. So, preparing an affidavit in your home country is a good idea before coming to Japan. 

Can foreign residents/expats get a bank loan in Japan?

A frequently asked questions is if non-Japanese buyers can get a bank loan in Japan. As Japanese bank loan interest rates are known to be low and are therefore attractive to foreign investors.

There are a few requirements to get a bank loan in Japan.

  • Permanent residence in Japan or holding a working visa

  • You must have lived in Japan at least one year.

  • You can get a loan if you have lived in Japan for more than three years and worked for more than five years.

Additionally, you are most likely to be regarded favorably by a lender if you have permanent status or are married to a Japanese citizen and some banks also lend to foreign nationals with long-term work experience in Japan.

Japanese banks that have house loan offerings, such as Mizuho and Shinsei, conduct a personal assessment by checking the following:

  • Current employment and work history

  • Financial situation

  • Current salary

  • Age

  • What mortgages you currently have

What are property purchase costs in Japan?

The following are some of the major costs to keep in mind when considering purchasing real estate in Japan.

  • Real Estate Broker Fee: 3% + 60,000 yen + Consumption Tax

  • Registration & License Tax: 0.4 % to 2% of the assessed value of land and building.

  • Down Payment: 10% of the property price

  • Stamp Duty: 10,000 yen for 10 million to 50 million yen; 30,000 yen for 50 million to 100 million yen; 60,000 yen for 100 million to 500 million yen

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