Yes, foreigners can buy property in Japan without restrictions. Whether you’re an American or Australian, if you are looking to buy an apartment in Tokyo, a vacation home in Hokkaido, or investment property anywhere else in Japan, there are no legal restrictions on foreign ownership of real estate.
Japan does not require residency, citizenship, or special permits to purchase land or buildings. Foreign buyers must comply with standard legal processes, including registration and taxes. Ownership rights for foreigners are the same as those for Japanese citizens..
There are, however, a few caveats. Buying property in Japan often differs from that in other countries, and it can be complex due to language barriers and differences in legal and financial systems. We wrote this guide to walk you through everything you need to know about buying property in Japan as a foreigner.
Let’s do a deep dive to clarify what is and is not possible.
Legal Framework for Foreign Real Estate Buyers
Japan has one of the most foreigner-friendly property ownership systems in Asia. You get full ownership rights on a freehold basis with very few restrictions.
- Equal Rights: Foreigners have the same property rights as Japanese nationals.
- Freehold Ownership: You can own both the building and the land it sits on.
- No Time Limitations: There are no expiration dates on property rights.
- Inheritance Rights: Property can be freely bought, sold, and inherited among foreigners.
Buying property in Japan does NOT automatically grant you residency rights or a visa. There is no “investment visa” or “golden visa” program in Japan that provides residency through property investment.
Foreigners can also invest in and purchase property in Japan even if they do not live in the country. In fact, many foreign investors choose to buy property in Japan as a method for diversifying their real estate portfolio and to take advantage of the country’s stable economy and relatively low property prices.
There are also some restrictions you should know:
- Agricultural and Forest Land: You need special permission from the Japanese government to purchase land designated as “agricultural” or “forest” under the Foreign Exchange and Foreign Trade Act (FEFTA).
- Military Areas: There are restrictions on purchasing land near Japan Self-Defense Force or US military bases.
- Reporting Requirement: Non-residents must report property purchases to the Bank of Japan within 20 days under the Foreign Exchange and Foreign Trade Control Act.
Some condominium buildings may have rules that restrict the sale of units to non-Japanese residents. These rules are known as “gaijin bans” or “foreigner bans,” and while they are becoming less common, they can still be found in some parts of Japan.
Requirements for Foreigners Purchasing a House in Japan
To be eligible to purchase a home in Japan as a foreigner, there are a few requirements to prepare for in advance.
Valid Residence Card or Visa
All foreigners who live in Japan are required to have a valid residence card, which is called zairyu card (在留カード) in Japanese.
While you don’t need residency to buy property, having permanent residency status or a long-term visa significantly improves your chances of securing financing and navigating the purchase process smoothly.
| Visa/Residency Status | Can Buy Property? | Financing Challenges | Special Considerations |
|---|---|---|---|
| Tourist/No Visa | Yes | Very difficult to get loans | Cash purchases only; may need a local representative |
| Work Visa | Yes | Possible but challenging | Typically need 2+ years remaining on visa |
| Spouse Visa | Yes | Moderate difficulty | Japanese spouse can help secure financing |
| Permanent Resident | Yes | Easiest for foreigners | Similar to Japanese nationals |
| Non-Resident | Yes | Extremely difficult | Remote purchasing possible but not recommended |
A foreign buyer without a valid residence card may also face additional legal and administrative hurdles, such as obtaining a tax identification number and registering the property with the local government.
Registered Seal
Foreigners who wish to purchase property in Japan must have a registered seal or jitsuin (実印) in Japanese, which is a personal stamp or hanko (ハンコ) used in place of a signature on important documents in Japan.
A jitsuin is an officially recognized seal that is registered with the municipal office of a city, ward, town or village. Registering a hanko at the municipal office is called inkan toroku (印鑑登録) or registration, and the registered seal is called jitsuin (実印).
When you register your seal, you can obtain a seal registration certificate or inkan shomeisho (印鑑証明書) in Japanese. With this certificate, it is recognized that “the document is indeed stamped by the person himself/herself using his/her own seal.” The equivalent in the West is a notarized signature.
Bank Account
One of the primary challenges for foreigners looking to open a bank account in Japan is the language barrier, as many Japanese bank employees do not speak English fluently.
It can be helpful to bring a Japanese-speaking friend or interpreter to the bank when opening an account. Some Japanese banks are known to cater to foreigners living in Japan. Some make it possible to conduct almost all business in English and have limited transaction fees.
A few recommendations include the following banks:
- Japan Post Bank
- Mitsubishi UFJ Bank
- Mitsui Sumitomo Bank
- Mizuho Bank
- Seven Bank
- Shinsei Bank
- SMBC Prestia Bank, and
- Sony Bank
Another challenge is meeting the strict documentation requirements. To open a bank account in Japan, foreigners typically need to provide a valid passport and a residence card or visa, as well as proof of address, such as a utility bill or rental agreement.
In some cases, banks may also require proof of income or employment, as well as a registered seal or jitsuin (実印) in Japanese (see above). In addition, some Japanese banks may have specific requirements for opening an account, such as a minimum deposit amount or a certain type of visa.
It is always a good idea to research the specific bank’s requirements in advance and to contact them directly to confirm the necessary documentation and procedures.
Secured Loan from a Japanese Bank
Although not always required (e.g., payment in cash), it is often easier said than done to obtain a bank loan as a foreigner in Japan.
Some Japanese banks may be hesitant to lend to non-Japanese buyers, and the loan application process may be more complicated for foreigners. See the next section for more details.
Guarantee from a Guarantor Company
Guarantor companies, also known as hoshonin (保証人) in Japanese, are third-party organizations that provide a guarantee to the seller or lender that the buyer will fulfill their financial obligations.
In many cases, Japanese banks and real estate companies require a guarantor for non-Japanese buyers because they are not familiar with the buyer’s financial history or creditworthiness.
The guarantor company typically charges a fee for their services, which can range from a few thousand yen to several percent of the purchase price.
Not all prospective buyers may be required to obtain a guarantee from a guarantor company. It can depend on various factors, such as the buyer’s financial situation, the type of property being purchased, and the specific lender or seller involved in the transaction.
Can Foreigners Get a Home Loan in Japan?
Securing a home loan or mortgage from a Japanese bank as a foreigner living in Japan can be challenging, as banks have strict requirements and regulations for lending to non-Japanese residents.
Here are some of the key requirements for securing a home loan or mortgage from a Japanese bank as a foreigner living in Japan:
Valid Residence Status
You must have a valid residence status in Japan, such as a visa or a permanent resident card. Without a valid residence status, it is not easy to obtain financing.
Good Credit History
Banks will typically require a good credit history, both in Japan and in your home country. This can be demonstrated through a credit report or other documentation. Establishing a good credit history as a foreigner living in Japan can be challenging, as credit systems and requirements may differ from those in your home country.
The length of time it takes to establish a good credit history in Japan as a foreigner can vary depending on various factors such as your income, type of visa, and the types of credit you use. Generally, it can take at least six months to a year of consistent credit behavior to establish a good credit history.
This means having at least one credit account open, such as a credit card or a personal loan, and using it responsibly. It’s important to make payments on time, keep credit utilization low, and avoid having too many inquiries or opening too many accounts at once.
Many banks and financial institutions in Japan may require a certain level of Japanese proficiency and proof of stable income or employment to approve credit applications. This can make it challenging for foreigners who are new to the country or who have limited Japanese language ability.
Stable Income
Banks will want evidence of stable and sufficient income to cover the mortgage payments. Pay stubs, tax returns, or other financial documents can demonstrate this.
Many Japanese banks have age restrictions for mortgage borrowers, and some may not offer mortgages to retirees or those close to retirement age. If you have trouble, consider the following options:
- Choose a Lender that Caters to Foreigners: Some Japanese banks and financial institutions may have more experience working with foreign customers and may be more willing to lend to retirees with permanent residency status.
- Provide Proof of Income and Assets: Retirees with permanent residency status may be required to show proof of stable income or assets, such as pension income, investment income, or savings. Providing detailed financial documentation and a plan for repayment may help to overcome any income or employment restrictions.
- Consider a Guarantor or Co-signer: Retirees with permanent residency status may be able to obtain a mortgage with the help of a guarantor or co-signer, such as a family member or friend who has a stable income or employment.
- Choose a Shorter Mortgage Term: Retirees may want to consider choosing a shorter mortgage term, such as a 10 or 15-year term, which may be more manageable and easier to obtain.
- Explore Government-Backed Programs: The Japanese government offers various programs and subsidies to support home ownership, including special mortgage programs for permanent residents. Retirees with permanent residency status may be eligible for these programs, depending on their age, income, and other factors.
Adequate Down Payment
You will typically need to provide a down payment of at least 10% ~ 20% of the property value. Foreigners may be required to provide a down payment of 30% or more of the purchase price, depending on the lender and the type of property.
This is because foreign borrowers are seen as higher risk by Japanese lenders due to the potential difficulties in assessing their creditworthiness, as well as the possibility that they may leave Japan before the loan is repaid.
It may also be necessary to demonstrate adequate funds to pay for other costs such as mortgage registration fees, property taxes, and insurance.
Japanese Language Ability
Some banks may require that the borrower have sufficient Japanese language ability to understand the terms and conditions of the loan.
Do not expect a Japanese bank to be able to provide a term sheet prepared in English.
Step-by-Step Process to Buying a Property in Japan
We usually breakdown the process of buying a property in Japan in six different phases. Each phase has its own set of procedures and considerations.
Preparation
First, you have to determine your budget, including not just the purchase price but all associated costs like taxes, fees, and potential renovation expenses.
Take time to define your requirements—location preferences, property size, amenities, and proximity to transportation or schools. If you are looking for real estate agents experienced with foreign buyers, you can reach out to us.
You should also start gathering essential documentation early: your identification, proof of income, residence status documentation, and more. This preparation can significantly streamline the later stages of the process.
Property Search
If you are looking to buy a home or an apartment in Tokyo, you can check our real estate platform. We maintain an extensive database of properties that match various preferences and budgets. You can also reach out to us directly, and we can help you find property listings that might not even be publicly advertised.
When possible, you should always try to arrange in-person viewings to assess properties firsthand.
Our team conducts thorough neighborhood research for all properties we represent. We provide comprehensive information about public transportation access, nearby amenities, school quality, and the area’s development plans. Before any viewing, your Tokyo Portfolio agent will brief you on the property’s history, previous sales, and any known issues so you have all the information you need.
Offer and Negotiation
Once you find a suitable property, the next step is to submit a formal offer. Most Japanese property transactions often occur close to the asking price. While some negotiation is possible, especially for properties that have been on the market for a long time, price reductions are uncommon.
If your offer is accepted, you’ll typically pay a small earnest money deposit (tetsukekin) of around ¥100,000-¥500,000 to show your commitment to the purchase. This amount is usually applied to the purchase price if the sale proceeds but may be forfeited if you withdraw without a valid reason.
Contract
The most critical document you’ll receive is the Explanation of Important Matters (重要事項説明書/Jūyō Jikō Setsumeisho), which details the property’s condition, legal status, any restrictions or encumbrances, and other essential information. By law, a licensed real estate professional must explain this document to you before you sign the purchase agreement.
The purchase agreement (売買契約書/Baibai Keiyakusho) is the legally binding contract that outlines all terms of the sale, including the price, payment schedule, closing date, and any special conditions. At this point, you’ll pay the down payment, typically 10-20% of the purchase price.
Closing
Before finalizing the purchase, you will conduct a final property inspection to ensure everything is as agreed. The title transfer is handled by a judicial scrivener (司法書士/Shihō Shoshi), who ensures all documentation is properly filed with the relevant government offices. At closing, you’ll transfer the remaining balance to the seller, typically through a bank transfer.
Once payment is confirmed, you’ll receive the keys to your property with all relevant documentation, including the property registration certificate.
Post-Purchase
After purchase, you’ll need to register your ownership with the Legal Affairs Bureau and set up utilities like electricity, gas, water, and internet service. You’ll also become responsible for property taxes and any building management fees if applicable.
If you won’t be living in the property full-time, consider arranging property management services to handle maintenance, tenant issues, and other matters in your absence.
Taxes and Additional Costs
Purchasing property in Japan involves several taxes and fees beyond the purchase price that significantly impact your total investment.
When buying property, you’ll have to pay one-time purchase costs including Real Estate Acquisition Tax (不動産取得税/Fudōsan Shotoku Zei), which typically is 3-4% of the property value, though residential properties may qualify for reduced rates.
Registration and License Tax (登録免許税/Tōroku Menkyō Zei) adds another 1.5-2% of the property value when registering your ownership.
You also have to pay Stamp Duty (印紙税/Inshi Zei) which varies based on the purchase price, ranging from ¥10,000 for lower-priced properties to ¥600,000 for high-value transactions.
Legal fees for judicial scrivener services typically add 0.5-1% of the property value. Real estate agent commissions in Japan are standardized at 3-3.6% of the property value plus tax, usually split between buyer and seller agents.
Once you own the property, ongoing ownership costs become your responsibility. The main property tax is Fixed Asset Tax (固定資産税/Kotei Shisan Zei), assessed at 1.4% of the property’s taxable value annually and typically paid quarterly. Properties in urban planning zones incur an additional City Planning Tax (都市計画税/Toshi Keikaku Zei) of about 0.3% annually.
For apartment or condominium owners, expect monthly Building Management Fees (管理費/Kanri-hi) of ¥10,000-¥30,000 and contributions to a Repair Reserve Fund (修繕積立金/Shūzen Tsumitatekin) of ¥5,000-¥20,000 monthly for future building repairs.
Property insurance for damage and disasters runs about ¥30,000-¥50,000 annually, and if you generate rental income, you’ll pay income tax at rates between 15.315% and 55.945% depending on your total income.
As a general rule of thumb, budget approximately 8-10% of the property value for initial purchase costs and taxes beyond the property price itself. You should understand these costs upfront to prevent unexpected financial strain and allow for more accurate investment planning.
Conclusion
Japan’s robust real estate market and strong legal protections for property owners make it an attractive destination for foreign buyers. While there are certain barriers, such as language and cultural differences, or the challenge of securing a loan without permanent residency, none of these are insurmountable.
Through careful research, thorough planning, and the assistance of real estate professionals familiar with the needs of foreign buyers, owning a piece of the Land of the Rising Sun is well within reach.
At Tokyo Portfolio, we are dedicated to helping you navigate this process. Our team of experts is experienced in addressing the needs of foreign buyers and can provide the guidance necessary to make your dream of owning a home in Japan a reality.
What sets Tokyo Portfolio apart is our expertise with foreign buyers. We provide fully bilingual service in English and Japanese, ensure a transparent process with clear explanation of all costs and procedures, and offer deep local knowledge of Tokyo neighborhoods and market conditions.
Ready to explore your options for buying property in Japan? Contact our team today for a personalized consultation.
