Buying Property in Japan: What It Actually Costs

Transfer Taxes

Japan has no single transfer tax. Instead, Registration Tax (~1.2% effective), Real Estate Acquisition Tax (~1.8% effective), and Stamp Duty are separate charges shown in the closing costs breakdown.

What You'll Pay at Transfer

On top of the transfer tax, there are several legal and administrative fees that you need to budget for. Here's what to expect.

Transfer / conveyancing fees

These fees apply whether you're paying cash or taking out a bond.

Bond registration fees (only if you're taking a bond)

If you're financing your purchase with a home loan, the bank's bond also needs to be registered at the Deeds Office. These are the fees for that process.

Your Monthly and Annual Costs as an Owner

The purchase price is just the beginning. As a property owner in Japan, you'll have recurring costs that eat into your rental income. Knowing these upfront helps you model realistic returns.

• Fixed Asset Tax + City Planning Tax (固定資産税・都市計画税)

  Combined annual property tax: Fixed Asset Tax (1.4%) + City Planning Tax (up to 0.3%) of assessed value. Assessed value is ~60% of market value, so effective rate is ~1.0% of market value. New residential buildings get a 50% reduction for 3-5 years.

  annual
• Fire Insurance (火災保険)

  Annual fire insurance premium. Required by mortgage lenders. Typically 10,000-20,000 yen/year depending on structure type and coverage.

  annual
  Typically escalates ~2% per year
• Earthquake Insurance (地震保険)

  Optional but strongly recommended. Covers earthquake, tsunami, and volcanic damage. Premiums vary by prefecture and structure type (6,500-32,600 yen/year). Capped at 30-50% of fire insurance amount. Tax deductible up to 50,000 yen/year.

  annual
  Typically escalates ~2% per year
• Maintenance & Repairs

  Annual budget for ongoing repairs and maintenance. Typically 0.5-1% of building value per year. Wooden houses require more maintenance than reinforced concrete condominiums.

  annual
  Typically escalates ~1% per year

When You Sell: Capital Gains Tax

Japan taxes capital gains at separate, lower rates than ordinary income. If you hold the property for more than 12 months, you qualify for long-term rates — which are significantly lower than short-term rates.

Costs of Selling Your Property

When you eventually sell, there are costs that come out of your sale proceeds before you see the cash. Here's what to factor in when modelling your exit.

Buying Property in Japan as a Foreign National

Here's what foreign buyers need to know:

• 1 No restrictions: Any foreigner of any nationality can buy residential, commercial, or land property in Japan. There are no foreign buyer surcharges, no ownership caps, and no requirement to live in Japan.
• 2 My Number or tax ID: Residents need a My Number (マイナンバー). Non-residents can file taxes with a tax representative and do not need a My Number to purchase, but will need to appoint a tax agent for ongoing obligations.
• 3 Financing is difficult for non-residents: Japanese mortgage rates are among the world's lowest (0.3-1.5%), but most banks only lend to permanent residents. Non-residents typically purchase with cash. Some banks (Prestia, Suruga) offer limited foreign buyer mortgages at higher rates and 50-80% LTV.
• 4 Non-resident CGT withholding: When a non-resident sells, 10.21% of the sale price is withheld at source as a tax prepayment. This is credited against the final CGT liability. A Japanese tax return must be filed regardless of residency.
• 5 Building depreciation: Japanese buildings depreciate over their statutory useful life: 22 years for wooden houses, 47 years for reinforced concrete condos. Land does not depreciate. This is a key factor in investment returns — well-located RC condos in central Tokyo hold value significantly better than suburban wooden houses.
• 6 Minpaku (short-term rental) restrictions: National 180-day annual cap on STR. Most condo bylaws prohibit minpaku entirely. Whole-building ownership is typically required. Consider a ryokan/hotel licence for year-round operation.
• 7 Timeline: A typical purchase takes 1-3 months from offer to registration. The judicial scrivener (司法書士) handles all registration paperwork at the Legal Affairs Bureau.

Which Property Type Is Right for You?

Different property types come with different income potential, vacancy assumptions, and cost profiles. Here's how the main types compare in our calculator defaults for Japan.