Japan Real Estate FAQ for Foreign Buyers: 25 Questions Answered

Japan is one of the most open property markets in the developed world for foreign buyers. There is no FIRB-style approval, no foreign ownership cap, and no requirement to be a resident. The rules that do apply, however, are easy to miss because they sit in different statutes (FEFTA, the Civil Code, the Real Estate Registration Act, the Housing Accommodation Business Law, and the Important Land Use Regulation Act). Below are the 25 questions foreign buyers actually ask, with direct answers and the law for each.

Can foreigners buy property in Japan?

Yes. Foreigners can buy freehold land and buildings in Japan in their personal name with the same rights as Japanese citizens. There is no national restriction on foreign ownership of real estate under the Civil Code, and no approval from a foreign investment review board is required for residential purchases.

Two land classes are exceptions. Agricultural land (nochi) requires approval from the local Agricultural Committee (Nogyo Iinkai) under the Agricultural Land Act, which in practice means the buyer must be a registered farmer. Forest land of one hectare or more requires prior notification under the 2017 amendment to the Forest Act.

Do I need to live in Japan to buy property?

No. Non-resident foreigners can buy property in Japan without holding a visa, a residence card, or a Japanese address. A signed deed (urikai keiyaku sho), the seller's title certificate, a registered seal certificate, and registration with the Legal Affairs Bureau (Houmukyoku) are sufficient.

Most buyers still fly in for the signing, but you can close remotely by granting a power of attorney (ininjo) notarised at a Japanese consulate, with the judicial scrivener signing at the Legal Affairs Bureau on your behalf. The harder remote hurdle is a Japanese bank account, which usually requires in-person verification and a Japanese address, because settlement is almost always made by certified Japanese bank cheque or domestic wire (furikomi). From accepted offer to title transfer, a typical purchase runs four to eight weeks, with the contract signed within about two weeks of acceptance against a 10 percent deposit (tetsukekin).

Does owning property in Japan give me a visa?

No. Property ownership is unrelated to immigration status. There is no residency by investment program in Japan that runs through real estate. Long-term residency requires a separate visa under the Immigration Control and Refugee Recognition Act, such as the Highly Skilled Professional, Business Manager, or Spouse visas.

What is the FEFTA reporting requirement?

The Foreign Exchange and Foreign Trade Act (Gaikoku Kawase oyobi Gaikoku Boeki Ho, Law No. 228 of 1949) requires non-residents to file a post-acquisition report with the Bank of Japan through the Ministry of Finance within 20 days of a real estate transaction. The report uses Form 18 (Real Estate Acquisition Notification) and is mandatory regardless of price for residential property used by the buyer or their relatives.

What is the Important Land Use Regulation Act?

The Important Land Use Regulation Act (Juyo Tochi Tou Chosa Ho, Law No. 84 of 2021) took effect on September 20, 2022. It allows the government to designate watched zones (chuushi kuiki) and special watched zones (tokubetsu chuushi kuiki) within roughly one kilometer of defense facilities, nuclear plants, border islands, and coast guard stations. Transactions in special watched zones over 200 square meters require pre-notification.

What is a touki and a Legal Affairs Bureau?

The touki is the property registration entry maintained by the Legal Affairs Bureau (Houmukyoku) under the Real Estate Registration Act (Fudosan Toki Ho, Law No. 123 of 2004). The touki shows ownership, area, registered mortgages, and the chain of title. Registration is what makes ownership opposable to third parties; the deed alone is not enough.

Do I need a judicial scrivener?

In practice yes. A judicial scrivener (shihou shoshi) handles the title registration with the Legal Affairs Bureau, drafts the registration application, checks the touki against the contract, and disburses funds at settlement. Fees typically run between 100,000 and 300,000 yen for a residential transaction.

What taxes do I pay when buying property in Japan?

You pay registration and license tax (toroku menkyo zei), real estate acquisition tax (fudosan shutoku zei), and stamp duty (inshi zei). Registration tax is 2 percent of the assessed value on transfer of ownership, reduced to 1.5 percent on land through March 2027. Stamp duty is on a sliding scale starting from 10,000 yen for contracts of 10 million to 50 million yen.

Total closing costs typically run 6 to 8 percent of the purchase price. The largest item after the taxes above is the agent commission, capped by law at 3 percent of the price plus 60,000 yen plus consumption tax.

What is real estate acquisition tax?

Real estate acquisition tax is a one-time prefectural tax under Article 73-2 of the Local Tax Act. The standard rate is 4 percent of the assessed value, reduced to 3 percent on land and residential buildings through March 2027. The bill arrives three to six months after registration.

What is the annual fixed asset tax?

The annual fixed asset tax (kotei shisan zei) is 1.4 percent of the assessed value, and the city planning tax (toshi keikaku zei) adds up to 0.3 percent in urbanization zones. Both are paid in four annual installments to the municipality. The taxable value is typically 60 to 70 percent of market value.

Can foreigners get a mortgage in Japan?

Resident foreigners with a permanent residence visa (eijuken) or a spouse visa can usually get a mortgage from a Japanese bank at standard rates. Non-residents and non-permanent residents face limited options, mostly through specialty lenders like SBI Shinsei Bank, Tokyo Star Bank, and Orix Bank, with loan-to-value capped at 50 to 70 percent and interest rates of 2.5 to 4.5 percent.

How does property inheritance work in Japan?

Under Article 36 of the Act on General Rules for Application of Laws (Houno Tekiyo ni Kansuru Tsusoku Ho), inheritance is governed by the law of the deceased's nationality at the time of death. For a foreign owner, the home country's succession law applies to division. The Japanese inheritance tax, however, is collected under the Inheritance Tax Act regardless of which succession law governs.

What is Japan's inheritance tax?

Japan's inheritance tax is among the highest in the world. The graduated rates run from 10 percent up to 55 percent on amounts above 600 million yen, with a basic exemption of 30 million yen plus 6 million yen per statutory heir. Foreign heirs without a Japanese address are taxed on Japanese-situs property only.

What is an akiya?

Akiya is the Japanese term for a vacant home. The Statistics Bureau's 2023 Housing and Land Survey recorded 9 million vacant homes, or 13.8 percent of the housing stock. Many rural municipalities run akiya banks (akiya banku), public listings of vacant homes that match buyers with sellers, sometimes with renovation subsidies.

Most akiya are pre-1981 wooden structures, which matters more than the price. Japan revised its building code (Shin-Taishin Kijun) on June 1, 1981 to require that buildings withstand a magnitude 6-plus earthquake without collapsing. Buildings completed before that date are excluded from many mortgage products, several insurance categories, and the home loan tax deduction (jutaku loan kojo). The same logic separates a manshon, a steel-reinforced concrete block built to higher seismic standards, from an apato, a lighter wood or steel-frame low-rise, and it drives insurance premiums, financing eligibility, and resale liquidity.

Can a foreigner use the akiya bank system?

Yes. Most akiya banks do not restrict foreign buyers, though some require local residency, a renovation plan, or a five-to-ten-year occupancy commitment to qualify for subsidies. Conditions vary by municipality, so verify the rules with the city's akiya promotion office (akiya taisaku kakari) before making an offer.

What is the minpaku law?

The Housing Accommodation Business Law (Jutaku Shukuhaku Jigyo Ho, Law No. 65 of 2017), commonly called the minpaku law, took effect on June 15, 2018. It allows short-term rentals (up to 180 nights per year) of registered private homes, subject to notification to the prefectural government. Many municipalities layered additional ordinances on top, including weekend-only operation in central Tokyo.

Are there restrictions on short-term rentals in Kyoto?

Yes. Kyoto's 2018 ordinance limits private home minpaku to the off-peak season for non-resident operators, prohibits unattended check-in within a 10-minute walk of the property, and requires a Japanese-speaking responder available 24 hours. New short-term rental bans in machiya districts of central Kyoto were tightened in 2024.

Is rental income from Japanese property taxed?

Yes. Non-resident foreigners pay 20.42 percent on gross rental income through withholding by the tenant or property manager under Article 212 of the Income Tax Act. Filing an annual return allows deduction of depreciation, repairs, property taxes, and management fees, reducing the effective rate substantially.

A non-resident owner with rental income must also appoint a Japanese tax representative (nozei kanrinin) under Article 117 of the Income Tax Act before filing.

What is the capital gains tax on selling Japanese property?

Capital gains tax depends on the holding period. Properties held five years or less at the start of the sale year are taxed at 30.63 percent for income tax plus 9 percent for local tax. Properties held more than five years are taxed at 15.315 percent for income tax plus 5 percent for local tax under Article 32 of the Income Tax Act.

There is a separate withholding rule on the sale itself. When a non-resident sells Japanese real estate, the buyer must withhold 10.21 percent of the gross sale price and remit it to the National Tax Agency, unless the property sells for under 100 million yen and the buyer intends to use it as a primary residence. It is a prepayment against the seller's capital gains tax, reconciled in the seller's Japanese return.

What is the Tokyo 23 wards reconstruction tax surcharge?

A 2.1 percent reconstruction special income tax (fukko tokubetsu shotokuzei) is added on top of national income tax under Law No. 117 of 2011. It applies to capital gains, rental income, and withholding through 2037. The rates above already include this surcharge.

What is a chintai contract versus an urikai contract?

A chintai contract (chintai keiyaku) is a lease. An urikai contract (urikai keiyaku) is a sale and purchase. Most existing apartment blocks in Japan operate on a teiki shakuchi (fixed-term leasehold) or ordinary lease (futsu shakuchi). Buyers should confirm whether the unit is freehold or leasehold and the remaining leasehold term.

What is the difference between mibun bukken and senyū bukken?

Mibun bukken describes property held by individual title; senyū bukken describes property held under sectional ownership of a building. A Tokyo condominium is usually senyū bukken, with the buyer owning the unit and a share of common land. The management association (kanri kumiai) collects monthly fees (kanri-hi, shuzen tsumitatekin) for maintenance and a long-term sinking fund.

What are kanri-hi and shuzen tsumitatekin?

Kanri-hi is the monthly management fee, typically 15,000 to 40,000 yen for a Tokyo apartment, covering cleaning, security, and concierge. Shuzen tsumitatekin is the sinking fund for major repairs, typically 8,000 to 25,000 yen per month, governed by the building's long-term repair plan (chouki shuzen keikaku) under the Act on Building Unit Ownership.

Is there a property tax break for residential land?

Yes. Residential land under 200 square meters per dwelling is assessed at one-sixth of the tax base for fixed asset tax and one-third for city planning tax under Article 349-3-2 of the Local Tax Act. Land above 200 square meters per dwelling is assessed at one-third and two-thirds. The break is removed if a vacant house is left standing in a poor state and the municipality designates it a specified vacant house under the 2014 Vacant Houses Special Measures Act.

How do I verify a Japanese developer before buying off-plan?

Pull the developer's commercial registry (shogyo toki) at the Legal Affairs Bureau, the construction industry license (kensetsugyo kyoka) at the prefecture, the real estate brokerage license (takuchi tatemono torihiki gyo menkyo) at the Ministry of Land, Infrastructure, Transport and Tourism, the corporate tax filings via the National Tax Agency public list, and prior project completion records. Bektu maintains developer track records that combine licensing, project history, and registered touki data for Japanese projects.