Foreigners’ Guide to Overseas Property Investment in Japan

November 02, 2016 Japan

Unlike other Asia properties, there are no restrictions on the acquisition of Japan property by foreigners. Overseas property investment is very much welcomed by the local government. However, the Japan property market has its own rules and regulations that it goes by. Here’s a rough step by step guide foreigners might want to know before going through an investment.

Overseas Property Investment | Real Estate | Asia Properties

Choosing a Property

When buying property for an overseas property investment, proper research is always necessary. Thriving cities such as Tokyo and Osaka are great cities for investing in real estate. You can read more here for which areas are the best places to purchase residential property in. It’s also important to note that some areas will be sold cheaper than others because they sit on top of fault lines. Because Japan is prone to major earthquakes, you would need to research the area’s earthquake risks here.

Signing a Contract

According to Real Estate Tokyo, it is stated by law that before signing for your overseas property investment, you need to carefully check the property status, relationship of rights, and various legal regulations. This is to ensure that the business transaction is safe. Along with that, a qualified real estate transaction specialist needs to be present and will be in charge of explaining to you the necessary details of the property. This process is called juyo jiko no setsumei or an ‘Explanation of Important Matters’, and it comes ready with a document required by law to be signed by the licensed specialist before proceeding with the transaction.

Signing a contract, on the other hand, will require you have your hanko (personal seal), down payment, a revenue stamp fee, and a personal identification document (driver’s license, passport).

Obtaining a Housing Loan

Most Japanese banks do not offer mortgages to those who are not permanent residents. However, according to Japan Times, there are banks that exist that allow foreigners to get a home loan when purchasing real estate in the local property market. Mizuho Bank and the Bank of Tokyo-Mitsubishi UFJ are two banks that offer mortgages to foreigners vying for an overseas property investment even if they do not have a permanent residency. However, not all foreigners that apply are given the home loan. Banks would still need to take into account the years of residence in Japan, income, and whether the foreigner has a Japanese spouse or not.

On the other hand, the Commonwealth Bank of Australia lends to foreigners who both do not have permanent residency and are living outside Japan but are interested in investing in real estate there.

Purchase and Registration

The Japan property must be then registered under your name by a shiho-shoshi or a Judicial Scrivener. They will also be the ones to check if all the needed documents are already prepared. Once completed, it is only then that the seller and buyer can sign the registration application form.

However, if you are a foreigner without permanent residency, it is required by the local property market to take an extra step of filling out and turning in a notification form to the Minister of Finance via the Bank of Japan. Such is the case because your overseas property investment is categorized as “a capital transaction” due to the Foreign Exchange and Foreign Trade Control Act. However, filing is not necessary if: 1) you acquire it for your own or for a relative’s residence, 2) you acquire it for a business office, or 3) you acquire it from other foreigners.

When the registration process of your overseas property investment is finally complete, a “Notice of Information for Registration Identification will be issued to you.  You would need to keep your proof of registration in case you sell the Japan property later.

Cost and Taxes

Lastly, you would need to pay the remaining sum and other necessary expenses. Real Estate Tokyo has a guide on all the property investment cost and taxes that will be incurred in the transaction. This includes costs such as the scrivener fee, agent fee, ownership registration fee and more.

With that, you’re all set to invest in Japan’s bustling real estate market! Want to know more about overseas property investment in other Asian countries? Follow us on Facebook for more updates and information on how to invest as a foreigner.

Source:
Japan Times
Real Estate Tokyo
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