Some Facts
Property prices in Japan are very high and have remained so since the early nineties. Most people in Japan prefer to rent homes instead of buying them. This may also be a smart move for foreigners. The Japanese housing market has been in pretty bad shape for over two decades now which makes long term investment in property relatively unattractive. There are however no laws restricting foreigners from buying property in Japan.
Real Estate Market in Japan
With skyrocketing property prices and 100 year mortgages being commonplace, if you can afford to buy property in Japan then you could look for property by yourself or use the services of a real estate agent. There are a number of real estate directories on sale at book stores and newsstands across the country which will help you with your individual search. You could alternatively contact a local real estate agent or a large real estate agency to help you locate suitable properties.
Need for Legal Advice
As an expatriate looking to invest in property in Japan you would do well to seek legal advice even before you begin looking for a property. Japanese property law leaves much room for confusion with regard to when ownership conditions change. In addition, property owners rarely register the property in their own names (for tax reasons) and all of this adds to the confusion. In fact, the scenario is such that even Japanese legal experts rarely agree on any one interpretation of the law. Qualified lawyers and law firms can be found at HG.org.
Costs likely to Be Incurred
When buying property in Japan you will incur expenses in respect of deposit, commission, stamp duty, insurance, Real Property Acquisition tax and legal fees over and above the cost of property. The higher the value of the property the greater the amount of stamp duty. Fees paid to shiho shoshi (licensed legal specialist) often amount to a hundred thousand yen or more.
Procedure
To set the ball rolling on negotiations on a property you will have to submit a purchase application to a listed seller outlining your terms for the transaction. This will serve as the basis for the remainder of the transaction. The next step involves you reviewing the details of the purchase with or without an estate agent to assist you. Once the review is complete the date of signing the contract will be decided and you will have to pay a deposit of 10% of the value of the property to the seller and commission to your agent. The contract will be stamped with an inkan (official ink that functions as a signature. This means that the transaction has been finalized. If you need to apply for a mortgage, do it after you sign the contract. As mortgages are difficult to procure, deposit and commission are refundable (only if this is stated in the contract). Once you have the mortgage and contract then either you or your lawyer must approach a shiho shoshi (licensed legal specialist) to register your property. Once the registration is complete you will receive keys to the property and the sale deed.
Mortgages
As an expatriate you must be prepared for multi-generation mortgages which last up to 100 years and are commonplace in Japan. In order to apply for a loan from Japanese banks, an expatriate must be a permanent resident in the country and even then requires a financial guarantor. References and detailed financial records must accompany a loan application and a long standing relationship with the bank is a huge plus.
More Expat Resources
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