Japan property buying checklist for first-time foreigners

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.

Have you confirmed your residency status in Japan and whether you are legally allowed to buy property as a foreigner?

Foreigners can legally purchase property in Japan without any nationality restrictions or residency requirements.

The Japanese government places no limitations on foreign property ownership, meaning you can buy real estate whether you're a tourist, temporary resident, or permanent resident. This applies to all property types including apartments, detached houses, and land.

However, your residency status significantly impacts other aspects of property ownership. Non-residents face stricter mortgage requirements from Japanese banks, often needing to provide larger down payments or seek alternative financing. Additionally, if you plan to live in Japan long-term, property ownership doesn't automatically grant visa status—you'll need appropriate work or spouse visas.

As of September 2025, Japan continues to welcome foreign property investment as part of its economic strategy. The process remains straightforward for legal ownership, though practical considerations around financing and taxation vary based on your specific residency situation.

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

Do you know exactly what type of property you want to buy and in which city or neighborhood?

Defining your property type and location preferences is crucial before starting your Japanese property search.

Japan offers three main property categories: apartments (mansions in Japanese, typically concrete buildings), detached houses (ikkodate), and land for construction. Apartments dominate urban markets like Tokyo and Osaka, offering lower maintenance responsibilities but monthly management fees. Detached houses provide more space and privacy but require higher maintenance costs and earthquake insurance considerations.

Location dramatically affects both lifestyle and investment returns. Tokyo's central wards (Minato, Shibuya, Shinjuku) command premium prices but offer strong rental demand. Osaka provides more affordable options with growing international business presence. Regional cities like Kyoto, Fukuoka, and Sapporo offer lower entry costs but potentially limited resale markets.

Neighborhood selection within cities matters significantly. Proximity to major train stations, international schools, and business districts affects property values and rental potential. Research local demographics, future development plans, and disaster risk zones before committing to specific areas.

Consider your timeline and goals—quick rental income favors established urban areas, while long-term appreciation might benefit from emerging neighborhoods or redevelopment zones.

Have you set a realistic budget including purchase price, taxes, fees, and ongoing maintenance costs?

Japanese property purchases typically require 10-15% additional costs beyond the listed purchase price.

Major upfront expenses include acquisition tax (typically 3-4% of property value), real estate agent commission (up to 3% plus ¥60,000), registration fees, legal fees, and property inspections. For a ¥50 million Tokyo apartment, expect approximately ¥5-7.5 million in additional costs.

Ongoing monthly expenses vary by property type but commonly include property tax (around 1.4% annually), management fees for apartments (typically ¥10,000-30,000 monthly), repair fund contributions (¥5,000-15,000 monthly), and utilities. Detached houses avoid management fees but require higher maintenance budgets for roof repairs, earthquake retrofitting, and garden upkeep.

Insurance costs include fire insurance (mandatory for mortgages) and earthquake insurance (optional but recommended), totaling ¥50,000-200,000 annually depending on property value and location. Budget for property tax, which gets assessed annually based on government valuations typically lower than market prices.

Factor in potential vacancy periods for rental properties—Tokyo averages 5-10% vacancy rates, while regional areas may experience 15-20% vacancy rates affecting rental income projections.

Do you have financing in place, and do you know if Japanese banks will lend to you as a foreigner?

Japanese banks typically require permanent residency status for standard mortgage loans to foreign buyers.

Residency Status	Mortgage Availability	Typical Requirements
Permanent Resident	Full access to bank loans	Stable income, 20% down payment, debt-to-income under 35%
Long-term Resident (5+ years)	Limited bank options	Higher down payments (30-40%), Japanese guarantor often required
Temporary Resident	Very limited options	Specialist lenders only, 40-50% down payment, high interest rates
Non-resident	Cash purchase or overseas financing	Alternative lenders, private financing, or cash transactions
Married to Japanese citizen	Better access than single foreigners	Spouse as guarantor, similar terms to permanent residents

Major Japanese banks like MUFG, Sumitomo Mitsui, and Mizuho offer competitive rates (0.3-1.5% as of September 2025) but maintain strict foreigner lending criteria. Regional banks sometimes provide more flexibility but with higher interest rates and fees.

International banks operating in Japan, such as Citibank or HSBC, may offer mortgage products for qualified expatriate clients. Some specialty foreign-focused lenders exist but typically charge premium rates of 2-4% annually.

Have you checked the building age, earthquake resistance standards, and safety code compliance?

Japanese building safety standards significantly improved after major earthquakes, making construction year a critical factor in property evaluation.

Properties built after 1981 comply with "new earthquake resistance standards" (shin-taishin kijun) designed to withstand magnitude 6-7 earthquakes without collapse. Buildings constructed before 1981 follow older standards and may require costly seismic retrofitting to meet current safety requirements.

Further improvements came after the 1995 Kobe earthquake, with enhanced standards for buildings completed after 2000. The 2011 Tohoku earthquake led to additional regulations, particularly affecting high-rise construction and coastal properties.

Inspect building maintenance records, seismic retrofitting certificates, and fire safety compliance certificates. Older buildings may need elevator modernization, asbestos removal, or structural reinforcement—costs that can reach millions of yen. Condominium buildings should have long-term repair plans and adequate reserve funds for major maintenance projects.

Consider tsunami and flood risks for coastal properties. Japan's hazard maps indicate risk zones, and properties in designated areas may face higher insurance costs and resale challenges. Research local disaster history and evacuation procedures when evaluating specific locations.

Do you know the total monthly ownership costs including property tax, management fees, and repair fund contributions?

Monthly ownership costs in Japan vary significantly by property type, location, and building age, typically ranging from ¥50,000 to ¥200,000 monthly for standard properties.

Property tax (kotei shisanzei) gets calculated annually at approximately 1.4% of assessed value, paid in quarterly installments. Tokyo properties also face city planning tax (toshi keikaku zei) of 0.3%, bringing total tax rates to 1.7% annually. Assessed values typically run 60-80% of market value, reducing actual tax burden.

Apartment buildings charge management fees (kanri-hi) covering common area maintenance, security, cleaning, and administrative costs. Tokyo apartments average ¥200-400 per square meter monthly, meaning a 70㎡ apartment pays ¥14,000-28,000 monthly. Luxury buildings with concierge services, gyms, or pools charge significantly higher fees.

Repair reserve funds (shizen-tsumitate-kin) prepare for major building maintenance like roof replacement, elevator renewal, and earthquake retrofitting. Standard contributions range ¥100-300 per square meter monthly. Buildings approaching 20-30 years may levy special assessments for major repairs, potentially costing hundreds of thousands of yen per unit.

Additional costs include utilities (¥10,000-25,000 monthly), internet services, and insurance premiums. Budget for seasonal expenses like air conditioning in summer and heating in winter, which can double utility costs during peak months.

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

Have you verified the exact land rights and lease terms if applicable?

Japanese land ownership operates under two main systems: freehold ownership (shoyu-ken) and leasehold arrangements (chikko-ken), with significant implications for property value and financing.

Freehold ownership grants permanent land rights transferable to heirs, representing the majority of residential properties. Owners pay property taxes directly and enjoy full control over land use within zoning restrictions. This ownership type provides the strongest security for foreign buyers and easier bank financing.

Leasehold properties involve purchasing building rights while leasing the underlying land, common in expensive urban areas like central Tokyo. Lease terms typically span 60-99 years with monthly or annual ground rent payments to landowners. As leases near expiration, property values decline significantly, and renewal negotiations become complex and expensive.

Some properties operate under borrowed land (shakuchi) arrangements where buildings can be owned while land remains leased. These properties often sell at 20-40% discounts to freehold equivalents but carry ongoing lease obligations and potential renewal difficulties.

Religious institutions, government entities, and some corporations offer leasehold arrangements with specific restrictions on property use, transfer rights, and foreign ownership. Carefully review all lease agreements, renewal terms, and ground rent escalation clauses before purchasing leasehold properties.

Do you understand the buying process timeline including deposit, contract signing, and final settlement?

The Japanese property purchase process typically spans 4-8 weeks from initial offer to final ownership transfer, involving multiple stages with specific obligations and deadlines.

1. **Property selection and offer submission**: Submit written offers through licensed real estate agents with preliminary terms and proposed purchase price. Competitive markets may require immediate decisions and higher initial offers.2. **Purchase agreement and deposit**: Sign preliminary purchase agreement (baikai keiyaku) and pay earnest money (tetsuke-kin) typically 5-10% of purchase price. This deposit secures the property and demonstrates serious intent to complete the transaction.3. **Due diligence period**: Conduct property inspections, review building documents, verify legal ownership, and arrange financing. This period typically lasts 1-2 weeks with right to withdraw for legitimate concerns about property condition or legal issues.4. **Mortgage application and approval**: Submit bank applications with required documents including income verification, property appraisals, and legal documentation. Approval processes take 2-4 weeks depending on lender requirements and applicant qualifications.5. **Final contract signing and settlement**: Complete detailed purchase contracts, arrange property ownership transfer, pay remaining balance, receive property keys, and register ownership with local government offices. Legal fees, taxes, and registration costs get settled at this stage.

Each stage requires specific documentation, often in Japanese, making bilingual professional support essential for foreign buyers navigating the process efficiently.

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.

Have you arranged for bilingual real estate agent or lawyer support?

Professional bilingual support proves essential for foreign property buyers navigating Japan's complex real estate procedures and legal requirements.

Licensed real estate agents specializing in foreign clients understand international financing needs, cultural preferences, and legal obligations specific to non-Japanese buyers. These agents typically charge standard commission rates (3% plus ¥60,000 plus tax) but provide valuable services including property searches, negotiation support, and transaction coordination.

Legal representation through qualified attorneys (bengoshi) helps review contracts, explain complex clauses, and ensure proper documentation. Legal fees typically range ¥300,000-800,000 depending on property complexity and transaction value. Some lawyers specialize in real estate transactions and maintain relationships with international banks and tax advisors.

Administrative scriveners (gyosei shoshi) handle property registration, tax filings, and government documentation at lower costs than full legal representation. These professionals understand bureaucratic procedures and can navigate paperwork efficiently, though they cannot provide legal advice on contract terms or dispute resolution.

Verify professional credentials through appropriate licensing bodies and seek referrals from other foreign property owners. Establish clear fee structures and service expectations before engaging any professional services to avoid misunderstandings during time-sensitive transactions.

Have you confirmed guarantor requirements and identified potential guarantors?

Japanese financial institutions and some property purchases require guarantors (hosho-nin), particularly for foreign buyers without permanent residency status.

Bank mortgage guarantors must meet strict criteria including Japanese residency, stable employment, sufficient income to cover loan obligations, and clean credit history. Typical requirements include annual income of 2-3 times the loan amount and employment with established companies or government positions.

Family members, including Japanese spouses, commonly serve as guarantors for foreign buyers. Business partners, employers, or long-term Japanese friends may also qualify depending on their financial stability and relationship to the buyer. Some banks accept professional guarantor companies for additional fees, though this option remains limited for foreign applicants.

Guarantor obligations continue throughout the loan term, making these arrangements significant commitments for both parties. Guarantors become legally responsible for payment defaults and may face collection actions for unpaid amounts. Clear agreements about expectations, communication, and emergency procedures help maintain positive relationships.

Alternative financing options exist for buyers unable to secure traditional guarantors, including international banks, private lenders, or cash purchases financed through overseas mortgages or lines of credit.

Do you know what documents you need and whether translations are required?

Japanese property purchases require extensive documentation, with most foreign-language documents needing certified Japanese translations for legal proceedings.

Document Category	Required Documents	Translation Requirements
Identity Verification	Passport, residence card, driver's license	Certified translations for all non-Japanese documents
Financial Documentation	Income statements, tax returns, bank statements, employment contracts	Certified translations plus notarization from origin country
Property Documents	Property registry, building permits, maintenance records, inspection reports	Usually provided in Japanese by sellers or agents
Legal Requirements	Purchase contracts, mortgage applications, insurance policies	Bilingual versions recommended for foreign buyers
Registration Papers	Ownership transfer documents, tax filings, government registrations	Must be completed in Japanese for legal validity

Certified translation services typically cost ¥3,000-5,000 per page for standard documents, with expedited services available for time-sensitive transactions. Government-approved translation services ensure legal acceptance of foreign documents in Japanese courts and administrative procedures.

Some banks and institutions accept documents in English without translation, particularly international banks with foreign client departments. However, final legal registrations and tax filings require Japanese documentation regardless of initial application language.

Have you considered your long-term plan and tax implications for different property uses?

Japanese tax treatment varies significantly depending on whether you use the property as a primary residence, rental investment, or hold it for future sale, requiring careful long-term planning.

Primary residence owners benefit from reduced property tax rates and capital gains exemptions for sales after 5+ years of ownership. Homeowner tax deductions reduce income taxes for mortgage interest payments, though benefits diminish for high-income earners. Property inheritance passes to family members with favorable tax treatment under current Japanese law.

Rental property owners face income tax on rental profits after deducting expenses including depreciation, management fees, repairs, and interest payments. Rental income gets taxed as regular income with rates ranging from 15-55% depending on total earnings. Depreciation schedules allow cost recovery over 22-47 years depending on building construction type and age.

Capital gains taxation applies different rates for short-term (under 5 years) and long-term holdings. Short-term sales face approximately 39% tax rates while long-term holdings benefit from roughly 20% rates. Non-resident sellers may face additional withholding requirements and limited deduction availability.

Future exit strategies should consider inheritance planning, as foreign heirs may face complex tax obligations in both Japan and their home countries. Estate planning with qualified international tax advisors helps optimize long-term wealth transfer and minimize administrative burdens for family members.

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

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. Ministry of Land, Infrastructure, Transport and Tourism Japan
2. National Tax Agency Japan
3. Ministry of Justice Japan - Real Estate Registration
4. Bank of Japan - Mortgage Interest Rates
5. All Japan Real Estate Association
6. Real Estate Transaction Promotion Center
7. Japan Meteorological Agency - Disaster Risk Maps
8. Prime Minister's Office - Foreign Resident Guidelines