With the Tokyo property market currently booming (condominium prices hit all-time highs for the second straight year in 2022), there is increasing interest from clients in Japanese real estate for both residential and investment purposes.
Purchasing a property in Japan can be rewarding but complicated, considering various costs and timeframes. This article will walk you through the general steps in purchasing a property in Japan, including the expected costs and time frames.
Please note that this article is aimed primarily at those currently residing in Japan and looking to purchase real estate to live in or for investment.
While it is possible to purchase Japanese real estate as a non-resident, banks will only lend to residents. As a non-resident, you will be looking at a cash-only purchase.
The process of buying property in Japan is as follows:
- Finding your real estate team with experience in the Japanese property market is crucial. You need to work with a team who knows the property market, lending landscape, and your overall financial goals. Argentum Properties can assist you in this process, as we have a team of experienced and reliable agents who can help you find the perfect property that meets your requirements.
- Initial Consultation: Once you have the right team in place, the next step is to clarify your property requirements, such as size, location, budget, and other needs. An experienced professional can then give you feedback on what is and is not possible so that you can have realistic goals and expectations.
- Loan Pre-approval: Before setting off on your property search, it is vital that you understand what kind of loans you will have access to, how much you can borrow, how much down payment (if any) will be required, and what the expected monthly repayment costs will be. Our property professionals work closely with the major lenders in Japan and will know the most up-to-date information regarding the mortgage market so that you can find the best deal for your situation.
- Find the right property: Once you and your property team are clear on the goals, budgets, and loan limits, you can start looking for properties. For example Tokyo has diverse properties, from high-end modern apartments to traditional Japanese homes, so it’s important to know what you’re looking for. Again, working with the right team is important here, as you want to find value deals that make financial sense. We’ve included our mortgage calculator below for your convenience.
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- Conduct due diligence: Before making an offer on a property, it’s important to conduct due diligence. Depending on the complexity of the property’s legal documentation, this can take a few days to a few weeks. Due diligence includes reviewing the property’s land registry, title deeds, and any outstanding debts or liens on the property. You may also need to hire a lawyer or a property inspector to help you with the process.
- Make an offer and negotiate the price: Once you have found a property you want to buy, you can make an offer to the seller. The seller may accept your offer, reject it, or make a counteroffer. Depending on the negotiation and the seller’s availability, this can take several days to a few weeks. Having an experienced, professional team on your side is key during this delicate process stage.
- Sign the contract: If your offer is accepted, you must sign a contract and pay an initial deposit. The contract will outline the terms of the sale, including the purchase price, payment schedule, and closing date.
- Closing: On the closing date, you must pay the remaining purchase price balance and any associated fees, such as taxes and agent fees. The seller will then transfer the property to you, and you will receive the keys and legal ownership of the property.
- Register the property: Finally, you must register the property with the local government and obtain a property registration certificate. A professional, usually introduced by the bank or real estate agent, will do this for you.
In conclusion, buying property in Japan can take several weeks to several months, depending on the process’s complexity and the parties’ availability. The first step is finding a reliable team to get the process started. Thankfully, if you are reading this article, you can already check off step one.
The Argentum has the right team to help you find the perfect property that meets your requirements, guiding you through the process and ensuring a smooth and stress-free experience. Contact us today to start your journey toward owning a property in Japan.
Argentum Wealth does not provide tax, legal or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
Argentum Wealth Management is licensed through the Japanese Financial Services Authority to give financial advice. The FSA strongly recommends that you only receive financial advice and services from a locally licensed and regulated firm.
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