Buying Property in Japan: Process & Costs For Overseas Residents
This page outlines the basic process for purchasing real estate in Japan and the main cost items incurred at each stage.
The cost items listed here represent the standard expenses typically incurred in a general brokerage transaction in Japan.
Fees for interpreters, translators, agents, attorneys, inspectors, or other external professionals are not included.
1. Property Selection and Viewing
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On-site viewing or online viewing
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Confirmation of price and conditions
2. Submission of Purchase Application
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Final adjustment of price and conditions
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Coordination of contract date and closing date
Cost Items
Generally none. But in some cases, an application deposit may be requested.
3. Important Matters Explanation and Sales Contract
The Important Matters Explanation is conducted before signing the sales contract.
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Signing of the sales contract
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Payment of deposit
Upon execution of the sales contract, the seller and buyer become legally bound.
Cost Items
Deposit
Typical amount: approximately 10–20% of the purchase price.
Payable to: Seller
(The brokerage company typically receives the funds as an authorized receiving agent.)
The deposit will be applied toward the total purchase price.
Stamp Tax
Revenue stamp required for the sales contract.
The amount depends on the purchase price stated in the contract.
Payable to: National Government (through purchase of revenue stamps)
Required Documents
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Copy of passport
Depending on the seller or the seller’s brokerage company, additional documents such as proof of income or an affidavit may be requested.
4. Closing
On the closing date, the remaining balance is paid, ownership transfer registration procedures are completed, and the keys are handed over.
Cost Items
Remaining Balance
Purchase price minus deposit
Payable to: Seller
Brokerage Fee
Although payment at closing is common, some cases require half at contract signing and half at closing, or full payment at contract signing.
Note: In Japan, both the seller and the buyer each pay brokerage fees to their own broker.
Maximum legal limit:
Purchase Price × 3% + JPY 60,000 + Consumption Tax
(For properties under JPY 8,000,000: JPY 300,000 + Consumption Tax)
Payable to: Brokerage company
Registration and License Tax
Judicial Scrivener Fee
Fee for ownership transfer registration
Payable to: Judicial scrivener
Prorated Fixed Asset Tax and City Planning Tax
Calculated on a daily basis as of the closing date
Payable to: Seller
Prorated Management Fees and Reserve Fund (for condominiums)
Payable to: Seller
Additional charges such as resort community management fees or neighborhood association settlement fees may apply depending on the property.
Required Documents
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Notarized Affidavit
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Copy of passport (ID verification)
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Power of Attorney appointing the judicial scrivener as registration agent
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Domestic contact information or tax representative registration documents
After contract execution, the judicial scrivener will provide detailed instructions regarding required registration documents.
Taxes Arising from Ownership Transfer
As a result of the ownership transfer, the following taxes arise.
These are not paid at closing. Tax notices are issued after ownership transfer.
Real Estate Acquisition Tax
One-time tax
A tax notice is typically issued by the prefectural government approximately 2–4 months after acquisition.
Fixed Asset Tax and City Planning Tax
Annual tax
Assessed on the owner as of January 1 each year.
Tax notices are typically issued between April and May.
For the year of acquisition, the amount is prorated and settled with the seller at closing. The new owner will receive the tax notice starting from the following year.
Funds Transfer in Real Estate Transactions
In Japan, an escrow system of the type commonly used in the United States, in which a third-party institution verifies the contract and manages the funds, is not established as part of the legal system. In principle, in domestic transactions, payments are made by transferring the funds directly to the recipient.
When the buyer resides overseas, it is common for the broker to temporarily receive the deposit and the remaining balance at closing, along with settlement adjustments, as an authorized receiving agent and then transfer the funds to the seller.
In some cases, it is possible to use fund-holding services provided by a judicial scrivener or a lawyer, but these services differ in nature from an escrow system.