Foreigners Buying Property in Japan
A Complete, Updated Guide with Trends, Costs, and Buying Steps
1. Japan’s Real Estate Market Continues to Attract Global Investors
Japan has long been one of the most attractive real estate markets in Asia, known for its economic stability, clear legal system, and world-class infrastructure.
In recent years, its appeal has grown even further — driven by steady economic recovery, the perception that Japanese property remains relatively affordable compared with other major global cities, and the weakened yen, which makes assets in Japan even more enticing for foreign investors.
According to CBRE’s Japan Investment Market Report (2024), foreign investors accounted for roughly 30% of all property transactions in Japan, up from about 24% before the pandemic.
A March 2025 survey by Mitsubishi UFJ Trust and Banking Corporation found that in Tokyo’s 23 wards, between 20% and 40% of newly built condominium units were purchased by foreign buyers — including individuals, institutional funds, and high-net-worth investors (HNWIs).
This international interest reflects Japan’s strong fundamentals: stable prices, low interest rates, high-quality infrastructure, and a safe, comfortable living environment.
2. Rising Concerns and Potential Regulations Ahead
Japan’s growing foreign demand has sparked debate that it may be contributing to rising real estate prices, particularly in central Tokyo and Kyoto.
Countries such as Singapore, South Korea, Canada, China, and more recently Australia have all introduced strict regulations limiting or prohibiting property purchases by foreign nationals.
In contrast, Japan currently allows foreigners to freely buy real estate, whether for residential or investment purposes, without any visa or residency requirement.
This open policy is one reason Japan continues to attract overseas investors seeking both stable returns and lifestyle benefits.
However, as international scrutiny grows and housing affordability becomes a public concern, Japan may eventually follow the trend of tightening rules.
Indeed, the October 2025 revision of the Business Manager Visa requirements signals a more cautious stance toward inbound investment overall.
For now, foreigners can still purchase and own property in Japan with few restrictions, but staying informed about future policy shifts is increasingly important.
3. Step-by-Step Guide: How to Buy Real Estate in Japan as a Foreigner
The buying process depends on whether you are purchasing a new development (sold in lots) or a pre-owned property (through a brokerage).
3.1 How to Find a Property in Japan
Foreign buyers in Japan typically follow a similar process, whether purchasing a newly built condominium (from a developer) or a pre-owned property (through a brokerage).
While transaction channels differ slightly, the overall flow remains largely the same.
Step 1: Find a Property and Choose an Agent
Properties in Japan can be found through:
- Online listing sites such as SUUMO, Realestate Japan, or At Home
- Newspaper or magazine advertisements
- Licensed local real estate agents
Japan operates a mandatory listing system called REINS, a database that all licensed real estate agents can access.
This ensures transparency—every agent sees the same listings.
However, negotiation skills, communication quality, and responsiveness differ greatly between agents, so selecting a proactive one can make a big difference.
Step 2: View the Property and Plan Your Finances
Once you’ve identified promising properties, schedule viewings.
Agents can arrange both in-person and virtual tours.
During this stage, you’ll also plan your financing—especially important if you intend to apply for a mortgage (though, as explained later, foreign buyers without residence in Japan often need to purchase in cash).
Step 3: Make an Offer
If you wish to buy, you’ll submit a written purchase offer.
For new developments, this is usually done directly with the developer; for resale properties, it’s submitted through your broker.
Step 4: Legal Explanation and Contract
Before signing, the agent or developer must provide a legally required document called the Explanation of Important Matters (Jūyō jikō setsumeisho).
This outlines ownership rights, property conditions, taxes, and any potential risks.
After reviewing and accepting the terms, you’ll sign a sales contract and pay a deposit (Tetsuke-kin), usually 10–20% of the purchase price.
Step 5: Mortgage Screening (if applicable)
Buyers seeking financing must undergo bank and guarantor company screening.
This process can take from a few days to several weeks, depending on your visa status and income source.
Step 6: Final Payment, Handover, and Registration
After final payment, ownership is officially transferred.
A Judicial Scrivener (Shihō Shoshi) usually handles the registration process at the Legal Affairs Bureau to ensure legal accuracy as explained further below.
Once registration is complete, you’ll receive your title deed and keys.
Tip: Japan’s registration system is transparent and secure, protecting both local and foreign buyers.
4. Financing: Can Foreigners Get a Loan in Japan?
Japan’s low interest rates (typically 0.5–2%) are appealing, and I often receive inquiries from clients asking whether foreign buyers can obtain local financing.
Unfortunately, in practice, foreigners without a long-term base in Japan rarely qualify for such mortgages.
Most Japanese lenders require:
- Long-term visa or residence status
- Stable domestic income and tax record
- A Japanese bank account
While other factors matter, the most fundamental requirement is to have a long-term residence status and a stable living base in Japan.
Without these, Japanese banks generally do not lend to foreign buyers.
In practice:
Foreign investors who live overseas and have no Japanese base almost always purchase properties in cash, which is standard in Japan’s market.
5. Real Estate Broker Commissions
Under the Building Lots and Buildings Transaction Business Act, brokerage commissions are legally capped as follows:
| Property Price | Maximum Commission (before tax) |
|---|---|
| Up to ¥2 million | 5% of sale price |
| ¥2–4 million | 4% of sale price + ¥20,000 |
| Over ¥4 million | 3% of sale price + ¥60,000 |
In most cases, you only pay your own agent’s commission, not the seller’s agent.
Each party compensates their own respective broker.
This differs from markets such as the United States, where sellers typically pay the total commission that is split between both agents.
6. Judicial Scrivener (Shihō Shoshi) and Registration Costs
Technically, buyers can register the property themselves, but the process is highly specialized, and Judicial Scriveners play a crucial role in ensuring the accuracy and safety of the transaction.
For this reason, even Japanese nationals almost always hire a Judicial Scrivener to handle registration.
- Average scrivener fee: ¥50,000–¥150,000 (≈ USD 330–990)
- Registration license tax: about 0.4–2% of assessed value
- Administrative & stamp fees: several thousand yen
Example:
For a ¥50 million apartment, expect total registration-related expenses of ¥200,000–¥450,000 (≈ USD 1,300–3,000), depending on complexity.
7. Real Estate Acquisition Tax (Fudōsan Shutokuzei)
This is a one-time local tax due after purchase.
| Property Type | Tax Rate |
|---|---|
| Land | 3% (temporary reduction from 4%) |
| Buildings | 3% (for standard residential) |
Example:
A condominium assessed at ¥40 million incurs roughly ¥1.2 million (≈ USD 8,000) in acquisition tax.
Tax reductions may apply for residential use under a certain condition.
8. Ongoing Ownership and Maintenance Costs
Owning real estate in Japan involves several annual expenses.
The following are reference ranges only — actual amounts vary by location, property age, and management structure.
| Expense Type | Typical Range | Description |
|---|---|---|
| Fixed Asset Tax | ~1.4% of assessed value | Paid yearly to the local government |
| City Planning Tax | 0.3% of assessed value | Applies in designated city zones |
| Condominium Management Fee | ¥10,000–¥30,000/month (≈ USD 65–200) | Common-area maintenance, cleaning, and security |
| Repair Reserve Fund | ¥10,000–¥20,000/month (≈ USD 65–130) | Long-term building repair and renewal |
| Fire / Earthquake Insurance | ¥10,000–¥30,000/year | Strongly recommended |
| Property Management Company (optional) | 5–10% of rent | If leasing to tenants |
Note: These figures are for reference only. Actual costs depend on the property and local tax rates.
9. Final Thoughts
Japan’s real estate market remains strong, transparent, and globally appealing, supported by a stable legal framework and solid economic fundamentals.
However, as policies evolve, such as the October 2025 tightening of Business Manager Visa requirements, the degree of openness to foreign buyers may gradually change.
If you are considering investing in or purchasing property in Japan, it is highly recommended to seek professional guidance from experts familiar with both Japanese regulations and international investment practices.
Feel free to contact me for consultation. I can help you navigate the process smoothly and make informed decisions in Japan’s evolving real estate landscape.
Disclaimer:
This article is based on information available at the time of writing and is intended for general informational purposes only.
It does not guarantee accuracy or completeness. Please consult qualified professionals for up-to-date legal, financial, or tax advice.