Common Misconceptions about Buying Homes in Japan

Mar 2, 2019


What is Your Goal Before Buying a Home in Japan?

 

 

In the case of foreigners, it is necessary to firmly establish future goals when considering buying a home. It is important to clarify whether you are going to sell your purchased property and return to your home country in the future, rent a property, or plan on staying in Japan permanently.

Some people look for houses without considering their end goals or surroundings, but it is important to remember to look for properties based on objective data towards your ultimate needs. For example, apartments prices are different depending on the distance in relation to the train station.

Even within the same district, it is dependent on whether the price is rising or falling. When choosing a property, you shouldn’t completely toss aside your wants for needs, but taking a more data-based approach to future goals is necessary for making the best home purchase.

 

What Buyers Should Do When Buying a Home in Japan

It is important to know the history of the property you are interested in purchasing. This includes knowing when large-scale repairs have been carried out, for example; when the waterproofing works on the rooftop have been carried out. Please be careful especially when you buy an apartment to check these areas.

To do this, you should obtain a document called the Important research report (Juyojikou-tyosa-hokokusyo) from the real estate agent. There should be a detailed repair plan written there.

Make sure you check the repair reserve fund and whether expenses for repair work planned to occur later will be enough. Condominiums in which repair work is not planned may gradually deteriorate their appearance causing the asset value to decline quickly.

Therefore, it is recommended that you ask the agent to Important research report and go over it together.

 

Preparing for the Process of Buying and Renovating a Vacant Home

In the case of a house, please check the structure and building diagram. In the case of an apartment, be sure to check the management agreement.

In terms of a house, restrictions are imposed on the building structure and equipment around the water depending on the property. In addition, there is a restriction that you can renovate by managing contract if it is an apartment.

Therefore, there are many cases when it is difficult to build an ideal house.

Negotiating on the Home You Will Buy in Japan

 

 

Basically, negotiation in Japan is on an early first-come basis, then the right to begin negotiations is obtained. However, when multiple offers are entered at the same time, most cases are compared by price amount. As a result, there are cases where negotiations may be disadvantageous, even if being the first to contact the property seller. In these cases being second or third to contact the seller may proceed favorably.

Requirements for financing a Mortgage through a Japanese Bank for Foreigners

Depending on your permanent residence rights, work visas, annual income, etc., the burden ratio of funds may change.

Basically, the main concern of the bank is whether the purchaser is planning on returning to their home country. During the payment period, the bank will often ask how long the buyer has been living in Japan and how long they plan on staying.

For banks, when payments are delayed, if the purchasers are living abroad it will become extremely difficult to prompt payment. Therefore, when using financial support from banks, foreigners will need to provide proof that they will continue to live in Japan.

 

Important Expenses and Taxes When Buying a Home

Although there are various expenses, the main expenses are as follows:

Stamp duty

Registration license tax

Judicial scrivener’s compensation

Property Tax

Property acquisition tax

Brokerage fee

Financing commission

Guarantee Charge

Fire insurance premium

Earthquake insurance premium

Group credit life insurance premium

 

Expenses and Annual Taxes of Purchasing a Home in Japan

The cost varies depending on the property:

Property tax

City planning tax

Administration fee

Reserve fund

 

My company LINC specializes in activities utilizing the sales route to foreigners as a real estate agent specialized for foreigners. When you want to assess your precious property, please ask our agent.

For a personal consultation or to join the ” How to Sell Buy and Sell Property in Japan” Seminars please sign up at the form below:

https://docs.google.com/forms/d/e/1FAIpQLSe95Jhp-WantePXtbwVNsnRJTSfwMgffvO1TkjeeBjbrbmDtA/viewform

For more information about the seminar check out this article:

Free Seminar: Introduction to the Way to Buy Your Dream Home and Sell Property in Japan!

For more articles on real estate in Japan check out this article:

Real Estate: Sale Amount Assessment

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