Ultimate Guide to Buying a Used House in Japan (for Foreign Residents)

Buying a home in Japan can be rewarding, but the process is very different from many other countries. This guide walks you through each step—what to expect, key costs, and practical tips to avoid common mistakes.

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🏠 1. Can Foreigners Buy Property in Japan?

Yes.
Foreigners can legally buy land and houses in Japan without special permits or citizenship. There is no restriction on property ownership based on nationality. However, mortgage financing from Japanese banks may be difficult unless you have permanent residency, stable long‑term employment, or strong financial standing.

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🧭 2. Start with Your Goals & Budget

Before browsing listings, ask yourself:

• Do you want to live in the home long‑term or use it as an investment?
• What areas are you considering: urban, suburban, or rural?
• How much renovation are you willing to manage?

Clarifying your goals helps narrow choices and prevents “buyer’s remorse.”

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🔍 3. Finding a Used Home

Here are the most common ways to find properties:

📌 Real Estate Websites

Use Japanese real estate search sites such as SUUMO, HOME’S, At‑Home or other local platforms. These let you filter by price, location, age, and floor plan.

📌 Real Estate Agents

Local agents can:

• Arrange property viewings
• Help negotiate price
• Explain contracts in detail

Important: Always confirm that the agent is licensed (required by Japanese law).

📌 Local Networking

Small towns and communities sometimes sell “akiya” (vacant houses) inexpensively through municipal programs.

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💴 4. Key Costs to Prepare For

Besides the property price, expect the following fees and taxes:

📌 Upfront Costs

Cost	Typical Amount
Down payment / Deposit	~5–10% of price
Brokerage Fee	~3–4% + ¥60,000
Revenue Stamp Duty	¥10,000–¥100,000
Registration & License Tax	~0.4%–2%
Judicial Scrivener Fee	¥50,000–¥150,000

These are paid at or near closing.

📌 Post‑Purchase Taxes

• Real Estate Acquisition Tax: ~3–4% of assessed value
• Annual Property Tax: ~1.4% of assessed value
• City Planning Tax: up to ~0.3%

Tip: Assessed value, not market price, is used for many tax calculations.

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📋 5. Home Inspection (Must Do!)

Older homes may have hidden structural or system issues. Always hire a professional building inspector before signing the sales contract.

• Common issues include roof damage, plumbing leaks, and electrical problems.
• Inspection costs are usually around ¥50,000–¥70,000.

This protects you from costly surprises later.

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📜 6. The Buying Process

Step‑by‑Step Overview

1. View properties and shortlist favorites.
2. Sign a Letter of Intent or offer with earnest money.
3. Hire an inspector and review the report.
4. Negotiate final price (especially if repairs are needed).
5. Sign the Sales Contract
   – Expect important disclosures and legal explanations from the agent.
6. Pay closing costs and taxes
7. Register ownership and hand over keys

Always review documents carefully; Japanese contracts may contain terms unfamiliar to foreigners.

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💡 7. Financing Options

🏦 Bank Loans

Most Japanese banks require:

• Permanent residency or long‑term visa
• Stable income in Japan
• Good credit records

Some banks may lend to non‑residents, but with stricter terms.

💰 Cash Purchases

Many used home buyers in Japan buy with cash, especially for inexpensive rural properties.

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🛠 8. Renovation & Maintenance

Older homes often need renovation:

• Roof or foundation repairs
• Updating electrical/plumbing systems
• Insulation improvements

Budget generously for renovation and maintenance: underestimating costs is a common mistake that leads to financial stress.

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🔑 9. Living Costs After Purchase

After moving in, ongoing expenses include:

• Utilities (electricity, gas, water)
• Property and city taxes
• Insurance (fire/home insurance)
• Periodic maintenance or renovations

A manageable post‑purchase budget is just as important as the purchase price.

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⚠️ 10. Common Pitfalls to Avoid

• Ignoring inspections: Old homes can hide serious issues.
• Underestimating costs: Closing fees, taxes, and repairs add up quickly.
• Assuming renovation is cheap: Skilled labor and materials in Japan can be expensive.
• Rushing decisions: Take your time to research neighborhoods and risks.

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📌 Final Tips for Foreign Buyers

✔ Join local community groups for insights about neighborhoods.
✔ Prepare bilingual support (translator/agent) if your Japanese isn’t strong.
✔ Keep financial buffers for unexpected repairs or taxes.