Important Points to Consider When Buying Property in Japan from Overseas
2023-03-11
Real Estate Investment in Japan
As a country with excellent infrastructure, exceptional safety, a diligent citizenry, and advanced construction techniques, Japan has become one of the most attractive countries in the world for foreign real estate investment.
So how does a foreign investor living overseas go about finding and purchasing a property in Japan? In this article, we explain some important points for consideration when buying real estate in Japan while residing overseas.
■ No restrictions for foreigners on buying property in Japan
First and foremost, there are no restrictions on foreigners buying and owning land or buildings in Japan, even if they are not a resident of the country.
However, you should take note of the following points when buying property in Japan.
・If you decide to purchase land first and build a house on it later, you have to pass an inspection before you can build property on it.
・There may be certain restrictions on extending or structurally remodeling your property.
・Buying a property in Japan does not grant you permanent residence in the country, even if the property is intended to be used as a private residence.
■ Finding a good real estate agency is more important than finding a good property
If you are living overseas and you are looking to buy property in Japan, one important point to consider is that instead of searching online for a property by yourself, it is better to search for a Japanese real estate agency that specializes in working with foreign clients. With their support, you can easily find a property that meets your requirements.
wagaya Japan has highly-experienced multilingual staff who can provide total support for your real estate investment in Japan.
■ Property viewing and inspection can be conducted online
After you have narrowed down your property search to a few candidates, you would normally visit each property to do an inspection. But if you are living overseas, going to Japan just to view a property may be quite a hassle that costs a lot of time and money.
One easy option is to ask the real estate agency to conduct a live or recorded viewing and inspection of the property online. Note that this requires the permission of the property seller, so it may not be possible in some cases.
Through the online viewing, you can also check certain aspects of the property. For example, if the property is advertised as being close to a train station, you can ask for a live stream or recording of the actual walking route from the station to the property. If the property is touted as being in a quiet residential area, you can ask for an audible video of the surrounding area.
Of course, before making a final decision on the property you want to buy, it is highly recommended that you visit Japan to visually inspect the property and its surrounding area for yourself.
■ Contract procedures can be done by proxy
After deciding to buy a property, the next steps include the issuance of a purchase certificate, the Explanation of Important Matters, signing of the sale contract, and payment of the deposit (earnest money) and the remaining balance.
The purchase certificate is a document that certifies the intention of the buyer to purchase the property. Setting the details of the document and its signing can be conducted online.
The Explanation of Important Matters is a legally-required procedure where a licensed real estate transaction specialist explains important points about the purchase, such as the details of the property, the rights of the buyer and seller, the conditions for the transfer, rules regarding breach of contract, etc.
In the past, the Explanation of Important Matters was legally required to be conducted by the real estate transaction specialist face-to-face, but this requirement has been relaxed and it can now be conducted online, even if you are residing overseas.
The deposit or earnest money is a certain percentage of the full purchase price that has to be paid in advance. It also serves as a cancellation fee paid to the seller in case the buyer decides to back out of the deal.
If you are living overseas, the deposit and the remaining balance must be paid by international remittance to a specified bank account in Japan. The conditions for international remittances vary by country and financial institution, and it may take some time for the money to be transferred. To avoid any issues, it is best to consult with your financial institution regarding international money transfers to Japanese banks.
■ Ownership registration and report to the Ministry of Finance
After paying the purchase price of the property, there are still two procedures you have to complete. One is the Ownership Transfer Registration which is typically done by a licensed judicial scrivener, who submits the document to the Legal Affairs Bureau on your behalf. Your real estate agent can introduce a judicial scrivener for you.
Lastly, you are also required to report the acquisition of property to the Ministry of Finance within 20 days of the purchase.
■ Summary
As we have outlined above, foreigners can purchase property in Japan fairly easily. However, the process can be quite complicated, with a lot of documents needing to be prepared.
In order to ensure that your property investment goes smoothly, it is highly recommended that you work closely with a trustworthy real estate agency that has plenty of experience in dealing with foreign investors residing overseas.
At wagaya Japan, we have worked with many foreign clientele based overseas in their purchase or sales of property in Japan. Feel free to consult us with your real estate needs.