How to buy a house in Japan?

Authored by the expert who managed and guided the team behind the Japan Property Pack

Everything you need to know before buying real estate is included in our Japan Property Pack

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Japan. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Japanese real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Tokyo, Osaka, and Kyoto. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

How easy is the process of buying a house in Japan compared to Western countries?

Buying a house in Japan is actually more straightforward than most Western countries in terms of legal barriers and foreign ownership rights.

Japan imposes zero restrictions on foreign buyers purchasing residential properties, making it one of the most open real estate markets globally. Unlike countries such as Australia, New Zealand, or Singapore that restrict foreign buyers, Japan welcomes international investment with the same legal rights as Japanese citizens.

The process is highly structured and transparent, following clear legal procedures that are more standardized than many Western markets. Japanese real estate transactions involve extensive documentation and formal procedures, but these create certainty rather than complications. The entire system is designed around protecting both buyers and sellers through detailed contracts and government oversight.

However, the Japanese market operates on fundamentally different principles than Western real estate. Properties typically depreciate over time while land values remain stable or appreciate, which contrasts sharply with the property appreciation expected in markets like the US, UK, or Canada.

As of September 2025, the average transaction timeline in Japan ranges from 30-60 days, similar to most Western countries but with more predictable timelines due to standardized procedures.

What are the exact step-by-step stages of the purchase process from start to finish?

Step	Action Required	Timeline
1. Initial Research	Budget planning, location selection, mortgage pre-approval if needed	1-4 weeks
2. Engage Real Estate Agent	Select licensed agent, sign agency agreement	1 week
3. Property Search	Browse listings, schedule viewings, conduct inspections	2-8 weeks
4. Submit Offer	Letter of intent, earnest money deposit (~1-3% of price)	1-3 days
5. Purchase Agreement	Sign contract, pay 5-10% deposit, receive property disclosures	1-2 weeks
6. Due Diligence	Title search, property inspection, mortgage finalization	2-4 weeks
7. Closing Process	Final payment, tax payments, ownership registration	1 week
8. Property Transfer	Receive keys, title deed, and property documents	Same day as closing

What types of properties can foreigners buy and are there any restrictions?

Foreigners can purchase virtually any type of residential or commercial property in Japan with full ownership rights.

Permitted property types include single-family houses, condominiums (mansions), apartment buildings, commercial buildings, and vacant land. Both freehold properties (where you own the land and building) and leasehold properties (where you own the building but lease the land) are available to foreign buyers. Investment properties, vacation homes, and primary residences all fall under the same unrestricted ownership rules.

The few restrictions that exist apply to specific land categories rather than foreign ownership. Agricultural and forestry land requires permission from local agricultural committees, which can be obtained but involves additional paperwork and time. Properties in designated military zones or national security areas may have restrictions, but these are extremely rare and typically don't affect residential buyers.

It's something we develop in our Japan property pack.

As of September 2025, over 85% of residential properties in major Japanese cities are available for unrestricted foreign purchase, making Japan one of the most accessible real estate markets in Asia.

Do you need to be physically in Japan to complete the purchase or can it be done remotely?

Physical presence in Japan is not required to complete a property purchase, but remote buyers must follow specific legal procedures.

Non-resident buyers must appoint a local representative with notarized power of attorney to handle contract signing and closing procedures. This representative can be a Japanese resident, a local attorney, or in some cases, your real estate agent. The power of attorney document must be notarized at a Japanese consulate in your home country and include specific language authorizing property transactions.

Remote transactions require additional documentation, including consularized documents that verify your identity and legal capacity to purchase property. All contracts and closing documents will be in Japanese, making professional translation services essential for understanding the terms and conditions.

While remote purchase is legally possible, many buyers choose to visit Japan at least once during the process to view properties in person and meet with their representative. This approach reduces risks and provides better understanding of the local market conditions.

Digital communication tools and video calls have made remote transactions more feasible since 2020, with many agents now offering virtual property tours and online contract explanations for international buyers.

What documents are mandatory for foreigners and which ones are optional or nice to have?

Foreign buyers must prepare specific mandatory documents while several optional documents can streamline the purchase process.

**Mandatory Documents:**1. Valid passport (primary identification)2. Certificate of registered seal (inkan) or notarized signature certificate3. Proof of funds or mortgage pre-approval documentation4. Purchase agreement and all related contracts in Japanese5. Power of attorney if not physically present in Japan6. Tax agent designation form for non-residents7. Anti-money laundering documentation as required by Japanese banks**Optional but Helpful Documents:**1. Japanese address or local contact information2. Residency card if you have Japanese residency status3. Professional translator documentation for contract review4. Previous real estate transaction history5. Employment verification or business documentation

The certificate of registered seal (inkan) is uniquely important in Japan and must be officially registered if you plan to make multiple transactions. Non-residents can substitute this with a signature certificate notarized at a Japanese consulate, but the inkan system offers more flexibility for future transactions.

It's something we develop in our Japan property pack.

Document preparation typically takes 2-4 weeks for international buyers, with consulate appointments often requiring advance booking in major cities.

Can foreigners realistically get a mortgage in Japan, what are the rates and conditions, and what tips help increase approval?

Securing a mortgage as a foreign buyer in Japan is challenging but possible under specific circumstances, particularly for residents.

Non-resident foreigners face significant barriers to mortgage approval, with most Japanese banks requiring physical residency, stable local employment, and established banking relationships. Success rates for non-resident mortgage applications remain below 10% at major Japanese banks as of September 2025. However, foreign residents with valid visas, particularly those with permanent residency or high-skill worker visas, have much higher approval rates approaching 60-70%.

Current mortgage rates in Japan range from 0.5% to 2.1% for fixed-rate loans, with variable rates starting as low as 0.3%. These are among the world's lowest mortgage rates, but qualification requirements are strict. Banks typically require 10-30% down payments, with higher percentages demanded from foreign applicants.

Key approval tips include maintaining a Japanese bank account for at least 12 months before applying, demonstrating stable income in yen, and working with banks that have international departments such as SMBC, MUFG, or international banks like Citibank Japan. Having a Japanese co-signer dramatically improves approval odds but requires finding someone willing to accept legal responsibility for the loan.

Most foreign buyers ultimately choose cash purchases due to mortgage difficulties, representing approximately 75% of international transactions in the Japanese residential market.

If you pay cash, how does the process differ and is it faster or safer?

Cash purchases significantly simplify and accelerate the Japanese property buying process while providing additional security for both buyers and sellers.

The primary difference involves eliminating the mortgage approval stage, which typically takes 3-6 weeks and can create transaction uncertainty. Cash buyers can proceed directly from purchase agreement to closing, reducing the total timeline from 45-60 days to 20-30 days. This speed advantage makes cash offers more attractive to sellers, potentially giving buyers negotiating power in competitive markets.

Safety improves with cash transactions because funds are guaranteed and don't depend on bank approval, which can be withdrawn if financial circumstances change. Japanese sellers often prefer cash buyers due to transaction certainty, sometimes accepting slightly lower offers to avoid mortgage-related delays or failures.

The closing process remains identical whether paying cash or using a mortgage, with the same legal procedures, documentation requirements, and ownership registration steps. However, cash buyers avoid mortgage-related fees such as bank processing charges, mortgage insurance, and loan origination fees, typically saving 1-2% of the purchase price.

Cash buyers must still demonstrate legitimate funding sources through anti-money laundering documentation, particularly for transactions exceeding 30 million yen. Bank transfers from overseas require additional documentation but don't significantly complicate the timeline.

What taxes, fees, and hidden costs should a buyer expect, with a full breakdown of each?

Cost Category	Amount/Rate	When Paid
Real Estate Agent Commission	3% of price + 60,000 yen + consumption tax	At closing
Stamp Duty (Contract)	10,000-100,000 yen based on price	At contract signing
Registration Tax	0.4-2% of property value	At ownership transfer
Judicial Scrivener Fees	50,000-150,000 yen	At closing
Real Estate Acquisition Tax	1.5-3% of assessed value	3-6 months after purchase
Annual Property Tax	1.4% of assessed value yearly	Quarterly after purchase
Property Inspection	50,000-100,000 yen	Before closing
Translation Services	100,000-300,000 yen	Throughout process

For a typical 80 million yen property purchase, expect total additional costs of 6.4-8.2 million yen (8-10.3% of purchase price). The real estate acquisition tax represents the largest single additional cost, often surprising foreign buyers when it arrives months after closing.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Japan versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

How reliable are real estate agents in Japan and what role do they play in protecting buyers?

Japanese real estate agents operate under strict licensing requirements and professional standards, making them generally reliable and essential for foreign buyers.

All real estate agents must hold licenses from prefectural governments and belong to professional associations that enforce ethical standards and provide consumer protection. The Japanese Real Estate Transaction Agent system ensures agents complete mandatory education and maintain professional standards, creating a more regulated environment than many Western countries.

Agents serve as neutral facilitators rather than buyer advocates, representing both parties in transactions while ensuring legal compliance. They provide mandatory property disclosures, explain contract terms, coordinate inspections, and handle complex paperwork that would be extremely difficult for foreigners to navigate independently. Their role includes translating key documents, explaining Japanese real estate customs, and ensuring all legal requirements are met.

However, agents primarily protect the transaction rather than specifically advocating for buyer interests. They receive compensation from both parties and focus on completing sales rather than negotiating the lowest possible price for buyers. Foreign buyers should understand this dynamic and consider hiring independent legal counsel for complex transactions or high-value purchases.

Commission rates are standardized across Japan, preventing price competition between agents but ensuring consistent service quality. As of September 2025, the standard commission remains 3% plus 60,000 yen plus consumption tax, providing predictable costs for international buyers.

Will the Japanese legal system protect a foreign buyer in case of disputes or fraud?

Foreign property buyers in Japan enjoy the same legal protections as Japanese citizens, with robust systems for dispute resolution and fraud prevention.

The Japanese legal system provides comprehensive protection through property registration systems, consumer protection laws, and civil courts that handle real estate disputes. Property ownership records are maintained by government registries that provide clear title verification and prevent fraudulent sales. These systems have operated reliably for decades and offer strong protection against fraud.

Consumer protection laws specifically cover real estate transactions, requiring detailed disclosures about property conditions, legal restrictions, and potential issues. Sellers and agents face legal liability for failing to disclose known problems, providing recourse for buyers who discover undisclosed defects or legal issues after purchase.

In case of disputes, foreign buyers can access Japanese civil courts, arbitration systems, and consumer protection agencies. The legal process is thorough and generally fair, though language barriers and cultural differences can create challenges for non-Japanese speakers. Many law firms now specialize in serving international clients and can provide representation in both Japanese and English.

It's something we develop in our Japan property pack.

Insurance products are available to protect against various risks, including title insurance and buyer protection policies that can provide additional security for international transactions.

What are the most common mistakes and pitfalls foreigners make when buying in Japan?

Foreign buyers frequently encounter predictable mistakes that can be avoided with proper preparation and understanding of Japanese real estate practices.

**Financial Miscalculations:**1. Underestimating total transaction costs by 3-5% of purchase price2. Failing to budget for property depreciation in investment calculations3. Not accounting for ongoing maintenance costs, especially for older buildings4. Overlooking the real estate acquisition tax that arrives months after closing5. Misunderstanding rental yield calculations in the Japanese market**Legal and Process Errors:**1. Not understanding the difference between leasehold and freehold ownership structures2. Proceeding without proper legal representation or translation services3. Assuming property ownership provides immigration or residency benefits4. Failing to establish proper tax reporting structures for non-resident owners**Market Knowledge Gaps:**1. Expecting Western-style property appreciation in a depreciating market2. Not researching neighborhood disaster risk factors (earthquakes, floods, tsunamis)3. Overlooking building age restrictions and renovation limitations4. Misunderstanding Japanese building quality standards and depreciation schedules

The most expensive mistake involves purchasing properties expecting capital appreciation similar to Western markets, when Japanese real estate typically depreciates 2-3% annually while land values remain stable or grow modestly.

Cultural misunderstandings around negotiation, contract terms, and closing procedures can also create problems, making experienced local representation essential for successful transactions.

Where do foreigners usually buy homes in Japan, and does owning property provide any path to residency or citizenship?

Foreign buyers concentrate their purchases in major metropolitan areas and tourist destinations, but property ownership provides no immigration benefits.

Tokyo remains the most popular destination, representing approximately 40% of foreign residential purchases, with buyers focusing on central wards like Shibuya, Shinjuku, and Minato for investment properties and residential areas like Setagaya and Nerima for family homes. Osaka attracts about 20% of foreign buyers, particularly in central districts and near Kansai International Airport. Kyoto appeals to buyers seeking cultural experiences and rental income from tourism, while ski resort areas in Hokkaido and Nagano attract recreational property buyers.

Other popular locations include Okinawa for tropical lifestyle seekers, Nagoya for industrial proximity, and hot spring resort towns like Hakone and Atami for vacation properties. Foreign buyers typically pay 10-30% premiums in prime locations but benefit from better rental yields and resale potential.

Critically, purchasing property in Japan does not provide any pathway to residency, permanent residence, or citizenship. Japan maintains strict separation between property ownership rights and immigration status. Foreign owners can visit their properties as tourists but cannot live in Japan long-term without separate visa sponsorship through employment, marriage, education, or other qualifying circumstances.

Non-resident property owners face additional tax obligations and reporting requirements, making professional tax advice essential for compliance with both Japanese and home country tax laws.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Old Houses Japan - Differences Between Buying a Home in Japan and Other Countries
2. Dovetail - How to Buy a Home in Japan as a Foreigner
3. BambooRoutes - Japan Real Estate for Foreigners
4. Real Estate Tokyo - Can a Foreigner Buy Property in Japan
5. Housing Japan - Buying a House in Japan as an Expat
6. Old Houses Japan - Step-by-Step Timeline for Purchasing a Home
7. Matcha JP - Real Estate Guide for Foreigners
8. Tokyo Dev - How to Buy a House in Japan
9. E-Housing Japan - Guide to Buying Property in Japan
10. Wise - Buying Property in Japan