Buying and owning property in Japan as a foreigner

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.

Can foreigners buy the same types of property in Japan as locals, or are there restrictions?

Foreigners can purchase and own all major property types in Japan with exactly the same rights as Japanese citizens.

This includes residential properties (apartments, houses, condominiums), commercial real estate (office buildings, retail spaces), and raw land. Japan operates under freehold ownership, meaning you own the property indefinitely rather than on a leasehold basis.

The Japanese government imposes virtually no restrictions on foreign property ownership. Unlike many Asian countries that limit foreign ownership to certain percentages or property types, Japan treats foreign buyers identically to domestic buyers in terms of property rights and acquisition processes.

There are extremely rare exceptions involving properties near sensitive military installations or certain agricultural land that requires special permits, but these restrictions apply equally to Japanese and foreign buyers. For standard residential and commercial real estate investment, foreigners face no limitations whatsoever.

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

Do I need to be a resident or hold a specific visa to purchase or own property in Japan?

No residency status, visa, or citizenship is required to purchase or own property in Japan.

Tourists, non-residents, and individuals with no connection to Japan can legally buy property. You can complete a purchase while on a tourist visa or even from outside Japan entirely. Property ownership does not require any minimum stay requirements or ongoing presence in the country.

However, it's crucial to understand that buying property does not grant any residency rights or visa status. Property ownership and immigration status are completely separate legal matters in Japan. To live in Japan long-term, you must obtain an appropriate visa through Japan's immigration system, which has its own requirements unrelated to property ownership.

Many foreign property investors use their Japanese real estate purely as an investment vehicle while residing in their home countries, and this is perfectly legal and common.

Is it necessary to be physically present in Japan to complete a purchase, or can it be done remotely?

Property purchases can be completed entirely remotely without being physically present in Japan.

The remote purchase process requires granting power of attorney to a trusted representative in Japan, typically a local lawyer, judicial scrivener, or specialized real estate agent. This representative will handle document signing, fund transfers, and title registration on your behalf.

You'll need to prepare notarized power of attorney documents in your home country, often requiring embassy or consulate authentication. All purchase documents and contracts are conducted in Japanese, making bilingual representation essential for non-Japanese speakers. Your representative will coordinate property inspections, due diligence, and the final closing process.

While remote purchasing is legally straightforward, it requires careful selection of representatives and thorough documentation to ensure the process runs smoothly. Many foreign investors successfully complete purchases remotely, though some prefer to visit Japan at least once during the process for property viewing and relationship building with local partners.

What is the step-by-step process for buying property, and which documents are required?

Do I need to hire a lawyer, or can the transaction be handled without one?

Hiring a lawyer is not legally mandatory for property transactions in Japan, but professional legal assistance is strongly recommended for foreign buyers.

Most Japanese property transactions are handled by a judicial scrivener (shiho-shoshi) who specializes in title transfers and legal documentation, working alongside real estate agents who manage contractual aspects. This system works well for domestic buyers familiar with Japanese language and procedures.

For foreign buyers, especially non-residents and non-Japanese speakers, engaging bilingual legal professionals becomes practically essential. The language barrier, complex documentation requirements, and need for power of attorney arrangements make professional guidance crucial for successful transactions.

Legal professionals can help navigate the entirely Japanese-language process, ensure proper document preparation, handle remote signing procedures, and provide ongoing support for tax and ownership obligations. The cost of legal assistance is typically modest compared to the risks of mishandling a major property purchase.

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What are the taxes, fees, and recurring costs involved in buying, owning, and reselling property?

Property purchase, ownership, and resale in Japan involve multiple taxes and fees that buyers must budget for beyond the purchase price.

**Acquisition costs** include a 3% agent fee plus ¥60,000 plus consumption tax, stamp duty ranging from ¥10,000 to ¥100,000 based on property value, registration tax of approximately 0.15-2% of assessed value, and judicial scrivener fees typically between ¥50,000 and ¥100,000.

**Annual ownership costs** consist of Fixed Asset Tax at approximately 1.4% of assessed property value and City Planning Tax at around 0.3% annually in urban areas. Condominium owners also pay monthly management fees, and all owners should budget for property insurance and utilities if applicable.

**Resale taxation** includes capital gains tax at 30% for properties owned less than five years or 15% for properties held longer than five years, plus agent fees and potential local taxes. These tax rates apply to non-resident foreign owners and can significantly impact investment returns.

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

Can foreigners get a mortgage in Japan, what are the current rates and conditions, and how can I improve my chances of approval?

Foreigners can apply for mortgages in Japan, but approval is significantly more challenging for non-residents compared to local buyers.

Japanese banks typically require proof of stable local income, Japanese residency status, and the ability to complete paperwork in Japanese. Current mortgage rates for Japanese residents range from 0.5% to 2%, which are among the world's lowest, but foreign applicants often face higher rates and stricter conditions.

**Approval requirements** generally include a long-term visa or permanent residency, documented Japanese income sources, substantial down payment (often 30-50% for foreigners), Japanese language proficiency for paperwork, and established banking relationships in Japan. Some global banks and specialized financing companies offer programs for non-residents, though at higher interest rates and with more restrictive terms.

**Improving approval chances** involves establishing Japanese bank accounts before applying, providing comprehensive financial documentation, working with mortgage brokers experienced in foreign applications, considering larger down payments to reduce lender risk, and potentially obtaining a Japanese co-signer. Many foreign investors opt for all-cash purchases to avoid financing complexities.

How do property prices break down by city and region, and what are the latest averages?

Japanese property prices vary dramatically by location, with Tokyo commanding premium rates and rural areas offering significantly lower entry points.

**Tokyo 23 special wards** represent the most expensive market, with prices ranging from ¥1 million to ¥2.5 million per square meter, with central wards like Minato, Shibuya, and Chiyoda reaching the highest end of this range. Properties near major stations and in international business districts command substantial premiums.

**Major secondary cities** including Osaka, Kyoto, Yokohama, and Fukuoka typically range from ¥500,000 to ¥1.2 million per square meter, offering better value while maintaining good rental demand and infrastructure. These cities provide attractive options for investors seeking strong returns without Tokyo's premium pricing.

**Rural and secondary locations** including Hokkaido, smaller cities, and countryside properties range from ¥100,000 to ¥400,000 per square meter. However, resort areas like Niseko and Hakuba command premiums due to tourism demand, with prices approaching major city levels in prime locations.

Property prices fluctuate based on exchange rates, local demand, new supply, and economic conditions, making current market analysis essential for investment decisions.

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.

Which neighborhoods or regions are most popular with foreigners, and why?

Foreign property buyers gravitate toward specific Japanese neighborhoods that offer international amenities, strong rental demand, and cultural accessibility.

**Tokyo's international districts** including Minato, Shibuya, Chiyoda, Chuo, and Shinjuku attract the most foreign investment due to their concentration of international businesses, embassies, international schools, and expat-friendly amenities. These areas offer strong rental yields from both local and international tenants while providing easy access to transportation hubs.

**Osaka's commercial centers** particularly Umeda and Namba districts appeal to foreign investors for their business activity, cultural attractions, and relatively lower prices compared to Tokyo while maintaining strong rental demand and tourism appeal.

**Tourism and resort areas** including Kyoto's downtown and Higashiyama districts, plus ski resort towns like Niseko in Hokkaido and Hakuba in Nagano, attract foreign buyers seeking short-term rental income from tourism. These locations offer seasonal demand spikes and strong international appeal.

**Emerging markets** like Sapporo and Fukuoka are gaining foreign investor attention due to lower entry costs, growing economies, and less saturated markets while still offering good infrastructure and rental potential.

Which areas currently offer the best mix of liveability, rental yields, tourism demand, and long-term capital growth?

• Tokyo's outer wards and satellite cities provide the best overall balance, offering reasonable prices, strong rental demand from commuters, good liveability with less congestion than central Tokyo, and steady long-term appreciation potential driven by Japan's economic center status.
• Osaka's secondary districts deliver excellent rental yields compared to Tokyo while maintaining strong infrastructure, cultural attractions, and business activity that supports both tourism and residential rental demand with good long-term growth prospects.
• Fukuoka represents exceptional long-term value due to its demographic growth, emerging tech sector, relatively high rental yields, excellent livability rankings, and significantly lower entry costs compared to Tokyo or Osaka.
• Sapporo offers a unique combination of affordable pricing, good rental yields, strong tourism foundation, excellent quality of life, and potential for growth as Hokkaido develops its tourism and agricultural sectors.
• Hokkaido ski resort towns like Niseko provide specialized tourism-driven returns with international appeal, strong seasonal rental income, and limited supply that supports property values, though with higher volatility than urban markets.

What are the fiscal implications for foreign owners, including rental income tax and resale taxation?

Foreign property owners in Japan face specific tax obligations that differ significantly from domestic ownership taxation.

**Rental income taxation** for non-resident foreign owners ranges from 20.42% to 40% depending on total income levels, with required annual tax reporting to Japanese authorities. Non-residents must appoint a local tax agent to handle these obligations and ensure compliance with filing deadlines and payment requirements.

**Capital gains taxation** applies at different rates based on ownership duration: properties owned less than five years face approximately 30% capital gains tax, while properties held over five years benefit from reduced rates around 15%. These rates apply to the profit from sale after accounting for purchase price, improvements, and selling costs.

**Inheritance tax implications** can apply to non-resident foreign owners under certain conditions, particularly if the property is located in Japan regardless of the owner's residency status. Estate planning considerations become important for significant property holdings.

**Double taxation agreements** between Japan and many countries may provide relief or credits for taxes paid in Japan, but owners must understand both Japanese obligations and their home country tax implications for foreign property ownership and income.

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

What are the most common mistakes foreigners make when buying property in Japan, and how can I avoid them?

Foreign property buyers in Japan frequently encounter preventable problems that can be costly and time-consuming to resolve.

**Language and legal complexity underestimation** represents the most common error, with buyers attempting to navigate the entirely Japanese-language process without adequate bilingual support. Engaging experienced bilingual agents and legal advisors from the beginning prevents misunderstandings and documentation errors that can derail transactions.

**Inadequate due diligence** particularly regarding building inspections, land rights verification, and neighborhood analysis leads to costly surprises after purchase. Professional property inspections, legal title searches, and comprehensive market research should be standard procedure for every purchase.

**Tax and residency confusion** occurs when buyers assume property ownership grants residency rights or fail to understand ongoing tax obligations. Property ownership is separate from immigration status, and foreign owners face specific tax reporting requirements that must be planned for in advance.

**Remote ownership cost miscalculation** happens when foreign investors underestimate management fees, maintenance costs, vacancy periods, and the complexity of managing Japanese rental properties from abroad. Comprehensive financial planning should include all ongoing costs and potential challenges of remote property management.

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. Taxes for Expats - Can Foreigners Buy Property in Japan
2. Tokyo Luxury Towers - Foreign Buyers Guide Japan 2025
3. Mailmate - Can I Live in Japan If I Buy a House
4. Immigration Lawyer Japan - Foreigners Buying Property Without Visa
5. Dovetail - How to Buy a Home in Japan as a Foreigner
6. Akiya Hub - Do I Need to Be in Japan to Buy a House
7. RE/MAX L-Style - Remote Contract Signing and Closing
8. E-Housing - Guide to Buying Property in Japan