Foreign Buyer's Mortgage and Tax Primer for Japan
Foreign Buyer's Mortgage and Tax Primer for Japan
Buying property in Japan as a foreign resident is straightforward — the rules are the same regardless of nationality. Financing and taxes are where most buyers get caught off guard.
Mortgages
Japanese banks lend to foreigners, but most domestic banks require permanent residency or a long-term visa with stable income. Without PR you'll typically see:
- Down payment: 30–50% (vs. 10–20% for residents)
- Tenor: 25–35 years, age-capped at 75–80 at final repayment
- Rate: floating from ~0.5%, fixed 10-year ~1.3–1.8%
If domestic banks decline, dedicated foreign-buyer lenders (Shinsei, SBI, Aozora) and Hong Kong / Singapore branches of Japanese megabanks are the next step.
One-time taxes at purchase
- Real estate acquisition tax (不動産取得税): ~3% of assessed value, billed 6–12 months after closing.
- Registration & license tax (登録免許税): ~2% on land transfer, ~0.4% on new building.
- Stamp duty (印紙税): a few tens of thousands of yen on the contract.
- Consumption tax: 10% on the building portion only (land is exempt).
Budget ~6–8% of the purchase price for combined transaction costs including agent fees.
Annual taxes
- Fixed asset tax (固定資産税): 1.4% of assessed value.
- City planning tax (都市計画税): up to 0.3% in urban areas.
Assessed values are typically 60–70% of market price, so effective rates feel lower.
When you sell
Capital gains are taxed at 39.63% if held under 5 years, 20.315% if held over 5 years. Non-resident sellers face a 10.21% withholding at sale, reconciled at tax filing.
None of this is exotic — but pricing it in upfront avoids unpleasant surprises six months after closing.