Purchasing
Purchasing Process
Consultation
We provide a wide selections of properties according to your requirements and budget. It is recommended to set priority of requirements in advance, such as: Location, size, year of property etc, in order for us to select the ideal properties. We also provide the most up-to-date property trend and past transactions for reference.
Property Viewing
It is highly recommended for on-site property viewing.
If you cannot come to Japan in person, it is recommended to use Google Map to find out about the property and its surroundings. We can provide the latest photos of the property for your reference.
Submit Letter of Intent to seller
Once a property was chosen, it is required to submit a Letter of Intent (LOI) * (Japanese: 購入意向表明書/買付証明書) to seller for price negotiation.
In Japan customarily, price negotiation is possible within 5% of the property price. For some properties, there might not be any room for negotiation.
* Validity period of LOI is 1 - 4 weeks.
Contract Preparation
Once the price and terms were agreed by the seller, the Real Estate Purchase and Sales Agreement (Japanese: 売買契約書) and the Property Disclosure Statement of Important Issues (Japanese: 重要事項説明書) will be prepared.
10% deposit of the property (Japanese: 手付金) should be arranged.
* Note: Property Disclosure Statement of Important Issues is a document that provides all the detailed information/matters relevant to the subject property, for example, land registration, earthquake standard, tenant identification etc.
Contract Signing
A) Authorize representative for contract signing
If you cannot come to Japan in person, you can prepare a Power of Attorney and authorize us (a licensed real estate agent) to sign contract on your behalf. Before signing the contract, we will explain the terms and conditions to you and ensure all transactional conditions are understood.
B) Sign contract in Japan
If you come to Japan in person, you and the seller will sign the contract on contract day.
* 10% deposit will be paid to seller on contract day.
Settlement
On the settlement day, the Judicial Scrivener will proceed with property rights transfer for the real estate being purchased. Once the outstanding payment and other fees were settled, complete set of keys will be received and transaction is complete.
The registration identification issued by the Registry Office will be available within 1 month. All documents will be sent to you within 1 - 1.5 month.
Required Items and Documents for Overseas Buyers:
- Officially registered seal
- Power of Attorney x 2 copies
- Statutory declaration from government x 2 copies
(issue within 3 months) - Passport copy with photo
- Identity card copy
Taxes and Fees
One-Time Tax Expenses and Fees
Registration Tax
Tax payable on the registration of ownership or registration of transfer of land or property
Tax rate: Assessed value of property x 2%
Stamp Duty
It is imposed on both buyer and seller who sign the real estate purchase and sales agreement.
| Sales Contract (Yen) | Stamp Duty (Yen) |
|---|---|
| 1.01 - 5 Million | 1,000 Yen |
| 5.01 - 10 Million | 5,000 Yen |
| 10.01 - 50 Million | 10,000 Yen |
| 50.01 - 100 Million | 30,000 Yen |
Real Estate Acquisition Tax
Tax on individuals and companies which acquire real estate in Japan (This is paid 3-6 months after property is acquired)
Tax rate: Assessed value of property x 3%
Agent Commission
(Property price x 3% + 60,000 Yen) + 8% Consumption Tax
Commission for the Legal Scrivener
In general, around 100,000 - 200,000 Yen, subject to property price
Yearly Tax Payment
Property Taxes
Property taxes include: Fixed Asset Tax & City Planning Tax
They are payable by all individuals and companies which own real estate as of 1st January each year.
Fixed Asset Tax rate: Assessed value of property x 1.4%
City Planning Tax rate: Assessed value of property x 0.3%
Personal Income tax
Tax on individuals who gain rental income.
| Annual Rental Income (Yen) | Tax rate | Deduction (Yen) |
|---|---|---|
| 0 - 1.95 Million | 5% | 0 |
| 1.95 Million above - 3.3 Million Below | 10% | 97,500円 |
| 3.3 Million above - 6.95 Million Below | 20% | 427,500円 |
| 6.95 Million above - 9 Million Below | 23% | 636,000円 |
| 9 Million above - 18 Million Below | 33% | 1,536,000円 |
| 18 Million and above | 40% | 2,796,000円 |
Monthly Expenses
Management Fee
Monthly management fee
Building Repair Fund
Monthly building repair fee includes repair broken water pipes etc.
Tax payment when selling properties
Capital Gain Tax
Sold within 5 years: (Profit - Expenditure) x 30%
Sold after 5 years: (Profit - Expenditure) x 15%