Purchasing Japan Properties | Convoy International Property Consulting Company Limited

Procedures of Purchasing Japan Property
 

1. Reserve a Unit

Once you have decided to purchase a specific unit of a Japan property, you are required to sign the Letter of Intent.
 

2. Pay Deposite

After the buyer has agreed with the reservation, 10% of the purchase price is payable by the buyer as deposite. Concurrently, the seller wil provide more information of the overseas property for the buyer such as the lease and tenant's info.
 

3. Sign Sales & Purchase Agreement

Once the buyer has confirmed to purchase the reserved unit and already transferred the deposite to the buyer's account, the overseas property agent will prepare the contract and fix the completion date with the buyer.
 

4. Pay the remaining amount of the purchase price

After signing the Sales & Purchase Agreement, the remaining amount of the purchase price is payable upon completion. (The payment terms may vary from different developers.)
 

5. Apply for mortgage

Three months before handover, the buyer must apply for mortgage. Normally, foreign investors are eligible for applying a 60% mortgage*. (Terms and conditions may vary depending on the buyer's background.)
 

6. Handover

In the morning of handover, a Japanese laywer will transfer the buyer's name at the local land registry to grant the ownership to the buyer.


Frequently Asked Questions


Q: How long does it take to purchase a Japan property? 

A: It depends on the completion date. Take completed properties as an example, it only takes around 2 months starting from signing the letter of intent to complete the process.
 

Q: Do I need to buy insurance for my Japan property?

A: It is not necessary. Generally,  Japanese will buy fire insurance for their properties which is equal to the home insurance in Hong Kong. A 5-year fire insurance and earthquake insurance cost around JPY
100,000 - 150,000.

Q: Are Japan properties freehold or leasehold?

A: Japen properties can be freehold or leasehold. The shortest leasehold is 30 years.


Q: What are L, D, K, S stand for?

A: L stands for Living Room, D stands for Dinning Room, K stands for Kitchen, S stands for Storage room.
 

 Q: After purchasing Japan property, when will I receive the rental returns? 

A: You may choose to receive the rental returns every four months or every year by TT transfer.
 

Q: What is the percentage of mortgage I can apply for purchasing Japan property?

A: Foreign investors can apply for 60% mortgage. The interest rate can be as low as 2.8% per annum and loan period can be 35 years.
 

Q: Are there any expenses when I buy / sell Japan property?

A: Buying or selling first hand Japan property can omit the agent's commission. Buying or selling second-hand Japan property is required to pay 3% of the purchase/selling price as agent's commission. If the client has assigned a rental management company to manage their properties, the management company will charge 5% of the rental return as management fee. The rental management company is responsible for collecting rent for the property owner, help pay the taxes for the owner and more. Besides, the property owner is required to pay for the property management fee and maintenance fee.


Taxes on Purchasing Japan Property

 

One-off Taxes:

●Real Estate Acquisition Tax :1% of the purchase price of the property

Stamp Tax :Depends on the purchase price of the property. Property with price under JPY 50,000,000 only required to pay JPY 15,000.


Other Taxes:

●City Planning Tax

Both of the above taxes will not excede the amount of one-month rental return and they are seasonal taxes.. 


Expenses when you sell Japan property

When you sell a Japan property, you need to to pay capital gain tax. Properties owned no more than 5 years will be accounted for 30% capital gain tax. Properties owned more than 5 years will be accounted for 15% capital gain tax.

Check out Japan Property for Sale HERE

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