Q＆A
01
About buying real estate
Can foreigners buy real estate in Japan?
Yes, they can buy.
Even foreigners can acquire ownership of real estate in the same way as Japanese. Unlike many other countries, ownership is granted not only to rooms in buildings or condominiums, etc., but also to land.There is no expiration date for ownership, and property can be bought and sold freely. It can also be inherited. There is no difference in taxes paid at the time of purchase between foreigners and Japanese.
In addition, there are no restrictions by the presence of permanent residency or nationality in Japan, or visa status.
However, purchasing real estate in Japan does not mean you can get permanent residency or no visa is required.
02
Acquiring land ownership
What are the benefits of acquiring ownership of land?
The land never disappears. In the unlikely event that a large earthquake strikes and the city collapses, the location of the land can be confirmed by GPS, so the boundaries will not be lost. Therefore, it has a high asset value.
03
Properties handled by SSP
How many properties does SSP handle?
We handle more than 100,000 properties.
We utilize a computer network system for exchanging property information.
The system is called REINS, or Real Estate Information Network System.
REINS is operated by four public interest incorporated associations and public interest incorporated foundations across the country, which are "designated distribution organizations" designated by the Minister of Land, Infrastructure, Transport and Tourism based on the Building Lots and Buildings Transaction Business Law. 133,000 real estate companies across the country (as of the end of 2015) have joined and shared information there.
Information on properties for sale received at real estate agents across the country is registered with REINS and immediately disclosed to other real estate companies through the network. As a result, the real estate company who knew such information can immediately provide it to its customer who is regularly looking for property and can speed up agreement of contract (sale / purchase).
The real estate company who received a request to sell property is obliged to register the property with REINS. The property information registered with REINS will be immediately shared with the real estate companies who received a request to purchase property. This makes it possible to handle properties for sale and on the market.
Please see REINS http://www.kinkireins.or.jp/
04
Process of real estate purchase
What kind of process is necessary when foreigners buy real estate in Japan?
When a foreigner buys real estate in Japan,
①Find property to buy,
②Conclude a Brokerage Service Agreement with a real estate company,
③Negotiate trading conditions such as price with the seller.
④If the agreement is reached,
⑤Conclude a sales contract,
⑥Settle the trading value,
⑦Receive handover of the property,
⑧Carry out the registration procedure.
That is not much different from the case where a Japanese buys real estate.
However, there are cases where foreigners need to report to the Minister of Finance when purchasing real estate in Japan.
05
Documents required when foreigners purchase real estate in Japan
The documents required to purchase real estate in Japan are different between foreigners residing in Japan and those living abroad. In practice, it depends on whether you have a status of residence.
・In the case where you have a status of residence
①Residence certificate
②Residence card
③Seal registration certificate issued within the past three months and the seal
Seals are rarely used overseas, but if a foreigner living in Japan purchases real estate, having one will make the procedure smoother.
・In the case where you do not have a status of residenceA substitute document for the residence certificate, a substitute document for the seal registration certificate, passport, and seal are required.
As a substitute for the residence certificate in Japan, an affidavit by a notary public in the buyer’s country or an affidavit certified by the Embassy or Consulate in Japan is often used.
As a way to prepare a substitute document for the seal registration certificate,
（ア）When the buyer comes to Japan, it is common to use a signature certificate by the government office of the buyer’s country, or the Embassy or Consulate in Japan. When registering the transfer of ownership, there is also a way to have the power of attorney for registration prepared by a judicial scrivener certified by the Embassy in Japan.
（イ）If the buyer does not come to Japan, there is a way to have the signature on the affidavit certified by a notary public in the buyer’s country, or to have the signature certificate by the government of the country returned to Japan. In addition to this, a seal registration certificate and ID card of the agent are required.
06
About using a mortgage
Can foreigners use a mortgage to buy real estate?
Available financial institutions are different depending on whether or not you have permanent residency.
・Ease of getting a loan for those with permanent residency
Many financial institutions in Japan require that you have Japanese nationality or permanent residency as a condition for getting a mortgage. If you have permanent residency, you can get a mortgage under the same conditions as Japanese.
・The case where you can get a loan without permanent residency
Some financial institutions offer loans to foreigners without permanent residency. Specific conditions depend on the financial institutions.
Even if you do not have permanent residency, we will support you in consulting with a financial institution to see if you are eligible to obtain a mortgage. If your spouse has Japanese nationality and has a stable income, you may also choose to buy real estate in the name of your spouse and take out a mortgage.
It's true that getting a permanent residency makes it easier to get a mortgage on favorable terms. If you buy real estate and settle in Japan, you may want to consider getting a permanent residency.
07
Costs of purchasing real estate
When purchasing real estate, what kind of expenses (incidental expenses) including taxes will be incurred in addition to the purchase cost?
Incidental expenses vary depending on whether you buy only land, land and buildings, condominiums, or get a mortgage, but it is generally said that it costs 7% to 10% of the purchase cost.
10% Consumption Tax will be levied on the purchase cost and incidental expenses excluding tax.
When you decide on property to buy, we will offer details including incidental expenses.
08
Taxes on holding real estate
Fixed Asset Tax and City Planning Tax are taxes levied on those who own land and buildings as of January 1st of each year by the municipalities or the Tokyo Metropolitan Government in the 23 wards of Tokyo.
Fixed Asset Tax applies to land and buildings in all areas, while City Planning Tax applies to land and buildings in urbanization promotion areas designated in the City Planning Act. The standard rate of Fixed Asset Tax is 1.4% of the assessed value of fixed assets and the rate of City Planning Tax is 0.3% of such value, but the actual tax rate depends on each municipality.
09
Taxes on investment property
If you rent your property that you own as investment property, the rent income will be taxable as income from real estate.
If you have other income such as employment income, those will be added together, and income tax and residence tax will be levied.
If your total income exceeds 200,000 yen, you will need to do tax returns.
We will support you in the procedures.
10
About maintenance
I am worried about property maintenance after purchase.
If it is a condominium, you can get a long-term repair plan, investigation report on important matters, etc., and also can know the history and plan of repair after construction through prior communication with the management company, so you can rest assured.
We do not recommend self-managed properties or old properties.
We will offer you support in the management after purchase as well.
11
About the earthquake
I am worried that there are many earthquakes in Japan.
The Building Standards Law has been revised many times for Japanese buildings, and now they are structures that will not collapse unless an unprecedented disaster happens.
Many of the Japanese Building Standards are highly appreciated.
In addition, we will check the property structure firmly after conclusion of the contract, so you can rest assured.
12
Points to be noted when foreigners buy real estate in Japan
The flow of foreigners purchasing real estate in Japan is not much different from that of Japanese.
・Choose a real estate company that is accustomed to handling purchase of real estate by foreigners.
It is often difficult for a general Japanese real estate agent to provide service in foreign languages. On the other hand, even foreign people who can understand Japanese at the daily conversation level may find it difficult to understand matters related to contracts.
Also, due to differences in the documents required for sales contracts and registration procedures, it is difficult for a real estate agent who is not accustomed to working with foreigners to proceed smoothly.
In particular, foreigners who do not live in Japan need to understand documents that can be used as substitutes for residence card and seal registration certificate. We will support you so that the procedure leading up to the conclusion of contract and delivery can proceed smoothly.