Buying Property Without Permanent Residency in Japan is a tangible goal for many non-Japanese residents dreaming of owning a piece of the Japanese real estate market, perhaps one of the sleek apartments in Tokyo Japan or an investment property. The procedure for purchasing real estate in Japan is largely consistent for both Japanese citizens and foreign nationals. However, securing financing, particularly a mortgage, can present specific challenges for those without Permanent Residency (PR). This guide provides a clear and authoritative breakdown of the process, necessary costs, and financing options for navigating the Japanese property market.

The Real Estate Purchase Process for Foreign Nationals

The overall procedure from identifying a property to final handover is systematic and structured. Understanding these stages is the foundation for a smooth transaction.

• Property Search: Begin by finding a property that meets your requirements, utilizing a reliable real estate brokerage or property website.
• Property Viewing (Kenshiki): Once a suitable property is identified, arrange an in-person viewing.
• Purchase Application: Submit a formal offer to purchase after any necessary price negotiations are complete. A key requirement at this stage is the down payment (Tetsukekin), which acts as a holding fee and is typically 5% to 10% of the purchase price.
• Preliminary Loan Approval: If financing is needed, apply for pre-approval for a mortgage or other loan from a financial institution. This simple screening confirms your eligibility and is crucial to prevent being rejected for a loan after signing the sales contract.
• Explanation of Important Matters (Jūyōjikō Setsumei): A licensed real estate agent will explain critical details about the property and contract terms before the formal signing.
• Real Estate Sales Contract (Baibai Keiyaku) Execution: After confirming the contract content is satisfactory, you will sign and seal the agreement.
• Final Loan Assessment: The financial institution conducts its final review and approval.
• Settlement and Handover: Upon loan approval, the remaining balance is paid to the seller, and the property is handed over to you.

Essential Costs Beyond the Purchase Price

When acquiring real estate, costs extend beyond the price of the property itself. These ancillary expenses typically total around 10% of the property’s price.

Cost Category	Description & Details
Brokerage Fee (Chūkai Tesūryō)	Paid to the real estate company for their intermediary services. For properties over ¥4 million, the maximum fee is capped at 3% of the property price + ¥60,000, plus consumption tax.
Registration Fees (Tōroku Menkyozei)	Taxes levied during the registration process to legally transfer property ownership. This is often paid along with the judicial scrivener’s fee.
Judicial Scrivener’s Fee (Shihō Shoshi Hiyō)	Paid to a qualified professional (Shihō Shoshi) who handles the complex legal registration procedures on your behalf.
Stamp Tax (Inshi Zei)	Tax affixed to the Real Estate Sales Contract and the loan agreement, if applicable.
Real Estate Acquisition Tax (Fudōsan Shutoku Zei)	A one-time local tax assessed on the purchase of real estate, usually levied approximately six months after the purchase. The standard tax rate is 4.0% of the assessed fixed asset value.
Fixed Asset Tax (Kotei Shisan Zei) Proration	The annual property tax is prorated between the buyer and the seller based on the transfer date.
Fire and Earthquake Insurance (Kasai Hoken)	Essential for mitigating risks associated with fire and natural disasters.

Mortgage Options for Buying Property Without Permanent Residency Japan

For those engaging in Buying Property Without Permanent Residency, foreign nationals are permitted to apply for home loans from Japanese financial institutions, but the screening process is generally more stringent.

Why Lacking Permanent Residency is a Challenge

Many financial institutions require applicants to have PR due to the inherent risk associated with long-term debt repayment. Loan terms often span a significant duration, such as 10 years or more. Without PR, a non-resident is subject to a time limit on their stay, which institutions view as a risk to the continuity of loan repayment after that period.

Key Criteria for Non-PR Applicants

For foreign nationals applying for a mortgage without PR, screening criteria are more rigorous compared to Japanese citizens or PR holders.

• Stable Income and Repayment Ability: The primary focus remains on the borrower’s age, income stability, and years of employment. Applicants must demonstrate a confirmed ability to repay the loan.
• Understanding Japanese: A working knowledge of the Japanese language is often a mandatory requirement, as contracts and important documents are typically in Japanese.
• Guarantor Requirement: Some institutions may require a spouse who holds Permanent Residency in Japan to act as a guarantor for the loan.

 International Financial Institutions

Consider consulting a financial institution from your home country that has a branch in Japan. Japanese banks may impose strict PR or language requirements, which can be barriers. By using an international bank, you might bypass these hurdles and facilitate a smoother assessment, especially if they are more comfortable with the possibility of you returning to your home country during the repayment period.

Partnering with A Realty for Non-Resident Purchases

Finding the right real estate partner is the most critical step for foreign nationals navigating the Japanese market. Arealty specializes in serving international clients and bridging the gaps caused by different property procedures and linguistic challenges.

Arealty’s expertise guarantees that the transaction is transparent, compliant, and tailored to your unique circumstances as a non-resident buyer. We understand the specific concerns regarding visa status and financing.

• Bilingual Expertise: Our team provides consultation and documentation support in multiple languages, simplifying the complex legal terminology of contracts and important disclosures (Jūyōjikō Setsumei).
• Targeted Property Sourcing: We focus on properties popular with non-residents, including high-yield investment options or residential properties like serviced apartments in japan and family homes.
• Financing Solutions: A Realty maintains strong relationships with PR-flexible financial institutions, including specialized lenders and international banks, significantly improving your chances of securing a mortgage even without PR.

Avoid transactional delays and ensure legal compliance. Partner with experts who understand the non-resident property landscape. Contact Arealty today for a personalized consultation on purchasing your next apartment in Japan. We are ready to assist with investment properties, residential homes, or securing an apartment for rent japan if you decide to lease before buying.

Preparing for a Smooth Transaction

Purchasing property as a non-resident involves navigating potential language barriers, professional terminology, and differing business practices. Careful preparation is key to a successful acquisition.

Select the Right Real Estate Partner

Choose a real estate company with proven expertise in assisting foreign buyers. They should be fluent in both the Japanese property process and potentially your home country’s business practices, ensuring clear communication and smooth coordination on matters such as required documentation, contract terms, and local regulations. Large brokerages and firms specializing in non-resident services often possess the necessary experience.

Prepare Necessary Documentation Early

Timely preparation of required documents is essential. Key documents for foreign residents include:

• Foreign Resident Registration Certificate (Gaikokujin Tōroku Shōmeisho): Obtainable at your local city/town hall. If you do not have resident status, a statement/affidavit from your home country may be required.
• Residence Card (Zairyū Kādo): Used for identification purposes, confirming your legal status in Japan. If you lack resident status, your passport will serve as ID.
• Seal Registration Certificate (Inkan Tōroku Shōmeisho) and Seal (Hanko/Inkan): This certifies the registered seal used for official documents. If you cannot prepare an official seal, an affidavit from your home country can be submitted as a substitute.

When applying for a mortgage, additional details are needed, including information about your employer, other loan amounts, and a detailed repayment plan. Organizing this information in advance will expedite the application process.

Post-Acquisition Obligations

After the process of Buying Property Without Permanent Residency is complete, several steps are legally required regardless of your nationality or residency status.

Registration

Property Registration (Shoyūken Tōki) is necessary to publicly prove your ownership against third parties. This is a complex procedure, and a judicial scrivener is typically hired to handle it. If the purchase involves a home loan, a mortgage registration (Teitōken Tōki) is also mandatory, securing the financial institution’s claim on the property.

Foreign Exchange and Foreign Trade Act Reporting

If a non-resident purchases Japanese real estate, primarily for investment purposes, they must report the acquisition to the Minister of Finance, via the Bank of Japan, within 20 days of the purchase date. (Source: Ministry of Land, Infrastructure, Transport and Tourism “Report on the acquisition of real estate in Japan”)

Tax Payments

Post-purchase, you are liable for both one-time and annual taxes.

One-Time Taxes:

• Real Estate Acquisition Tax: Paid once (approx. six months after purchase).
• Registration and License Tax (Tōroku Menkyo Zei): Paid during the registration process.

Annual Taxes (Paid by the Owner as of January 1st):

• Fixed Asset Tax (Kotei Shisan Zei): Local tax based on the property’s assessed value, with a basic tax rate of 1.4%.
• City Planning Tax (Toshi Keikaku Zei): Applied to properties within urbanization promotion areas, typically capped at 0.3%.

If the property owner is not residing in Japan, a Tax Agent (Nōzei Kanrinin) must be appointed to handle tax matters on their behalf.

Filing Rental Income Tax Returns

If you generate rental income, such as from apartments in japan or managing an apartment for rent japan property, you must file a tax return. Real estate income is calculated by subtracting expenses (e.g., management fees, repairs, taxes) from the gross rental income (January to December).

• Non-Resident Tax Withholding: Rental income for non-residents is typically subject to a 20.42% withholding tax. This withholding is not required if the tenant is a private individual renting for personal residential use.
• Tax Agent Mandate: Non-residents must appoint a Tax Agent to manage the tax filing process.

Frequently Asked Questions (FAQs)

Q1: Can I buy property in Japan without living there?

A1: Yes. Foreign nationals, regardless of nationality or residency status, are legally allowed to own real estate in Japan. However, the purchase of investment property by a non-resident requires a report to the Ministry of Finance.

Q2: What happens if I return to my home country after buying property?

A2: There are no legal issues, but you must arrange for management and tax compliance. This includes:

• Property Management: Appointing a trustworthy management company for remote oversight.
• Tax Compliance: You must appoint a Tax Agent to handle all annual tax filings and payments (Fixed Asset Tax, etc.) and income tax returns (if generating rental income).

Conclusion

Buying Property Without Permanent Residency is absolutely achievable. The process demands meticulous preparation, clear financial planning, and the support of experienced professionals. The key challenges—securing a mortgage and navigating complex legal and tax requirements—are manageable if you engage with specialized lenders like Saison Fundex and expert, bilingual real estate agencies such as A Realty.

Arealty proudly presents a meticulously curated listing of properties, ranging from luxury apartments to tranquil detached houses, designed to meet diverse needs and budgets. Each asset comes with detailed and transparent information to support your decision on Buying Property Without Permanent Residency. Explore and secure your dream home today!