Buying properties in Japan: complete guide for foreigners and investors
Currently, Japan has become an increasingly attractive destination for foreigners who wish to buy properties, whether to live, invest, or diversify their assets in a safe and economically stable country.
However, many foreign investors, including people from Mexico and other Latin American countries, believe that there are legal restrictions for foreigners to buy properties in Japan. However, this is not correct.
In this complete guide, you will understand how the property buying process works in Japan, who can buy, what the costs are, how the step-by-step process is, and what you should consider before investing.
Can foreigners buy properties in Japan?
Yes, absolutely.
In fact, Japan does not impose legal restrictions on property purchases by foreigners, regardless of nationality or immigration status.
This means that:
Foreigners can buy houses, apartments, and land;
There is no time limit for ownership;
The property can be sold or inherited freely;
Additionally, it is not mandatory to live in Japan to be an owner.
It is important to note that property in Japan is freehold, meaning the buyer owns both the land and the building.
Difference between resident and non-resident in Japan
For practical and legal purposes, Japan distinguishes between residents and non-residents:
Resident: A person who lives in Japan or has stayed in the country for more than a year.
Non-resident: Person who lives outside of Japan.
Basically, this difference can affect the required documentation, the possibility of financing, the method of payment, and banking procedures. Even so, both can legally purchase properties.
Why invest in real estate in Japan?
The Japanese real estate market attracts foreign investors for several reasons, such as:
- Political and economic stability;
- High level of security;
- Reliable legal system;
- Relatively stable real estate market;
- Attractive opportunities due to the yen’s fluctuation;
- High rental demand in urban areas;
- Transparent processes.
In summary, for many investors, Japan represents predictability and long-term security.
What is the process of buying a property in Japan?
Generally, the process is clear and structured:
- Initial consultation: The buyer explains their goals, budget, and conditions to a real estate agent.
- Property search: Options that fit the buyer’s profile are presented.
- Purchase offer: The buyer submits a formal offer to the seller and conditions can be negotiated.
- Contract signing: After accepting the offer, the purchase contract is signed and a deposit of 5% to 10% is usually paid.
- Registration and transfer: A legal professional (judicial scrivener) is responsible for the official registration of the property.
- Key delivery: Finally, once the payment and registration are completed, the property is transferred to the new owner.
What are the costs when buying a property?
In addition to the property price, important additional costs must be considered, including:
- Initial deposit;
- Real estate agent commission;
- Stamp duty;
- Registration fees and judicial scrivener fees;
- Fire insurance.
Costs after purchase
Subsequently, once the property is purchased, the owner must consider recurring costs such as:
- Property acquisition tax;
- Urban planning tax;
- Maintenance or condominium fees;
- Fire and earthquake insurance.
Therefore, these expenses should be planned in advance.
Can foreigners obtain financing in Japan?
Yes, but with important differences:
- Residents in Japan: They can, in some cases, obtain bank financing, depending on their visa, income, and financial history.
- Non-residents: Generally have more difficulties obtaining local financing and usually buy in cash or use financing in their home country.
It is worth remembering that each bank has its own criteria and there is no guarantee of approval.
Documents, Taxes, and Depreciation
Regarding the documents, real estate contracts are usually in Japanese. Identification documents, residence registration (for residents), and official seals (inkan) are typically required. Of course, it is possible to request translations for better understanding.
About depreciation: In Japan, buildings depreciate over time, especially older ones. This is crucial for investors because it affects the tax value and impacts the investment strategy. On the other hand, land does not depreciate in the same way.
Conclusion: Is investing in Japan a good option?
For many investors, the answer is yes. Japan offers legal security, economic stability, and international diversification. Like any investment, it is essential to analyze the objective and context before purchasing.
How can AS Real Estate help?
At AS Real Estate, we support foreigners interested in buying properties in Japan, whether for living or investing. We offer:
- Clear and honest guidance;
- Attention in Spanish and Portuguese;
- Support throughout the process;
- Accompaniment until the transfer.
Our goal is for you to buy with security and peace of mind.
