Wednesday, July 29, 2009

Buying a property in Japan

This article is for those who are interested in buying real estate property in Japan. I would be glad if this helps you.

How can you find property?

If you already know real estate agents in Japan, contact them. If you do not know any proper agent, here are a selection of the real estate agents who can speak English.

Enplus Inc.

Savills Japan

Sei Corporation (Minato-ku, Tokyo)

There are many websites providing information on properties, but do not rely on them too much. Property information on the Internet is usually not very attractive. If a property is very attractive, the real estate agent does not publicize property information on the Internet. They find the customer by themselves. The reason is because agents can receive their brokerage charge in double (from buyer and seller) if they represent the seller and can find the buyer. If you are staying in Japan and has decided the location of property, go to the location and look for the local real estate agents.

What is a registered real estate agent?

In Japan, doing the business of real estate agent needs governmental license of Takuchi Tatemono Torihikigyo. They will show you their selection of properties, give you advice on property, negotiate with the seller to get discount on behalf of you, and explain important information (including bad one) before you go into agreement with the seller.

How can I register property under my name?

After concluding a sales contract, shiho-shoshi lawyer will register your name to the governmental registry. Then the process is completed, and you have full right on the property.

What is shiho-shoshi?

Shiho-shoshi, also known as judicial scrivener, is a licensed attorney at the place of real estate/company registration. For more information, check the website of Japan Federation of Shiho-Shoshi Lawyer's Associations.

Can a foreign national buy property in Japan?

Yes, of course. In some cases, a foreign national has to do formalities different from those of Japanese citizens. We are experienced in real estate transactions with foreign nationals/companies, and can help you with documentations in the proper way.

What are the taxes related to buying property?

Registration License Tax: 2% on the value of building, 1% on the value of land. If you buy the property by mortgage finance, 0.4% of the amount of loan is added.
Real Estate Acquisition Tax: 3% on the value of property
Fixed Asset Tax: Charged yearly
Income tax

There are many exceptions on real estate taxation. Please consult experts on details before you take actions.

Is there any cost other than taxes when buying property?

Real estate agent fee is 3% of property value + JPY60,000 (5% consumption tax added to the sum of left).
Shiho-shoshi lawyer fee varies depending on each case, but usually JPY100,000 to JPY200,000.

In Japan, both buyer and seller pay their real estate agent fees. It means the agent who represents only buyer or seller receives above 3% + JPY60,000 from its customer, and the agent representing both receives 6% + JPY120,000 in total.

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