How to buy property in Japan from the US
Increased interest in Japan following the delayed 2020 Olympic games, and the falling value of the Japanese yen has made Japan once again a hot topic when it comes to buying a property overseas. Are you thinking of buying a home in Japan for yourself or as an investment?
Read on for the full lowdown on buying property in Japan, including:
- Can an American buy a house in Japan?
- How to buy a place in Japan step by step
- How hard is it to buy a property in Japan, and how to find a perfect place?
- Can I live in Japan if I buy a house there?
Buying a property in Japan will mean sending large international payments from USD to JPY, which can be surprisingly costly and slow with your normal bank. We’ll also touch on how providers like Wise and OFX can help you make cheap, fast and safe international transfers, with low fees and fair exchange rates.
Can US citizens buy property in Japan?
So – can an American buy a house in Japan?
You’re in luck. You can buy a property in Japan as a US citizen or resident with pretty much no restriction. The only thing to bear in mind is that there’s a recently enacted law which bars foreigners from buying property near to strategic or military locations. While this doesn’t cover huge areas, this can mean that buying places in some more remote corners of Japan is off the cards for US citizens.
It’s also important to remember that owning a home in Japan doesn’t automatically mean you can live there. You’ll still need to make sure you have all required permits and paperwork depending on how long you expect to stay there.
What are the requirements to buy a house in Japan?
Buying a property in Japan has much the same requirements as buying a home in the US. One thing to bear in mind is that getting financing in Japan – a loan or mortgage – can be hard, or impossible, unless you have a long term work permit or resident visa. That may mean you need to pay for the property from the US, in cash or through a US mortgage.
If you’re a resident in Japan you’ll need to have your certificate of residence and similar paperwork prepared, as well as your seal. If you’re not a resident you’ll need to prove your ID with a passport or similar, and will usually need an affidavit from the US to prove your local address here.
|💡 Key point on international transfers:
|When transferring money between the US and Japan, specialist money transfer providers like Wise and OFX can help you save significant amounts of money in transfer fees. For property related purchases this can get into the thousands of pounds. At Exiap we compare providers to help you find the best one for your needs.
How to buy a home in Japan step by step
Making a major purchase like a new home can be stressful, particularly when you’re in a foreign country. The processes to follow are unlikely to be familiar – and language barriers can make everything even trickier.
You’ll need a local realtor to guide you through buying your property in Japan. However, to paint a picture, here’s a basic outline of the process you’ll likely need to follow:
- Engage a local realtor you trust, who covers the area you’re looking to buy in
- View properties, in person or online, and decide on the right one for you
- Complete a purchase application form which details the main details of the price and when you’d like to buy the property – your realtor will guide you through this, and any subsequent negotiation
- Once you’ve come to an agreement about the purchase details you’ll move on to create a sales contract, which will be provided with an explanatory document which needs to be signed by a notary
- You’ll hand over your deposit when you sign the sales contract
- Any remaining due diligence checks are carried out
- Finally, you and the seller will sign the transfer of ownership document, and you’ll become the registered owner of the property
Japanese property prices
Japan’s overall property prices have been fairly steady in the past decade. Condominiums have seen more robust gains compared to larger detached houses – but the global pandemic did see some changes to these trends as people moved to work remotely, and decided to get out of urban areas where possible.
In general, property in key Japanese cities like Tokyo and Osaka can be extremely costly. However, there are some cheaper cities which are still popular with foreigners looking to invest, plus options for homes in rural areas and ski hotspots which are favored for vacation homes and rentals. We’ll take a look at the prices per square foot of properties in a range of Japanese cities a little later.
Best places to buy property in Japan
Japan is a rich and varied place, with plenty of choice when it comes to locations to target for your property search. Most foreigners headed to Japan to live will look at the larger cities where there’s more English spoken and where you can easily find an established expat community. These are also often the most popular places for people moving to Japan to work. Let’s look at some of the best places to buy property in Japan:
We couldn’t start anywhere other than Tokyo, Japan’s capital, famed for luxury living, amazing dining, and a somewhat futuristic vibe. If your Japanese dream is to capture a sense of fast paced high density living, with all the amenities you could possibly dream of, Tokyo might be the one for you. You’ll work hard – but you can also play hard, with all manner of entertainment options, no matter what you enjoy.
Only a couple of hours from Tokyo by bullet train, Osaka is another large city known for its great infrastructure, friendly people, and range of both modern and traditional forms of entertainment. While Tokyo is known for its high end Michelin eating, Osaka is Japan’s street food capital, with more relaxed dining, and lower overall costs of living.
On Japan’s Kyushu island, Fukuoka is quite a different prospect to Tokyo and Osaka. The temperature is mild, and you’ve got all the modern living you’d expect in Japan – but also easy access to beaches and countryside for when you want to get out and about. Fukuoka’s cost of living is lower compared to Tokyo, and you’ll benefit from a relatively relaxed lifestyle at a slower pace.
|Getting a bank account in Japan
|Getting a multi currency account can help you easily manage your money and save on fees. You can use the account to receive, hold, and transfer different currencies, as well as to spend on a debit card. Wise and Revolut are some of the most popular providers. You can also get a linked debit card for easy spending in Japan. Learn more: How to use Wise card in Japan
Cheapest places to buy property in Japan
Japan is not a cheap place to live. However, there are huge regional varieties when it comes to property costs and overall cost of living, which means you may prefer one of these cities if you’re moving on a budget or want to live on a fixed income.
As well as being a city steeped in history, Kyoto’s city apartment prices are significantly lower than nearby Osaka. Interestingly, though out of the city center, prices in Kyoto are similar to those out of the city center in Osaka. If you’re coming to Japan to learn about the rich culture there, Kyoto might be the perfect destination for you.
Kawasaki is part of the Greater Tokyo area, which has a cheaper housing cost compared to other areas of the megacity, while still maintaining fairly good access to all the benefits Tokyo has to offer. It’s quite industrial, but there are pockets of green – and the overall lower costs and safety make for a good alternative for anyone who wants Tokyo opportunities on a fixed budget.
Sapporo, capital of northern Hokkaido, has a low cost of living with fabulous natural resources, all in a city which is easy to live in and close to great skiing in the winter. It’s also home to the famous Sapporo beer – so you can visit the brewery, or have a cold one in the beer museum’s beer garden.
Is buying a house as an investment in Japan a good idea?
Whether or not investing in Japan is right for you will depend a lot on your personal situation, where you want to buy, and how long you’ll be able to hold on to the property. Before you make any big decisions be sure to take professional advice.
One big factor influencing investor decisions at the moment is the relative strength of the dollar against the yen. This makes it possible to find a good investment opportunity, but don’t forget, exchange rates change all the time, and the USD v JPY exchange is likely to fluctuate as time goes on. The most important thing is to get proper local support, and help on hand to advise you of the specific real estate market in the location you’re considering buying in.
What’s the property market like in Japan?
The average value of properties in Japan has been pretty stable despite global economic forces. Condos have seen strong rises in value while larger properties didn’t see a lot of growth until the covid pandemic boosted interest in moving to a larger place outside of the urban centers.
Interest rates in Japan have remained low through 2022 and are forecast to stay as such in 2023, which may contribute to the relative stability despite costs of living rising around the world.
One factor often brought up by analysts familiar with the Japanese property market is that there is an excess of supply of some types of property, in some areas. Before you buy, it’s worth doing extensive research into the specific area you’re considering as market conditions are quite localized.
Check our page: Buying Japanese Yen
How much does it cost to buy property in Japan?
Let’s take a look at a snapshot of property prices by square foot from the cities we picked out earlier. This data comes from Numbeo – which takes live consumer data and aggregates it to come up with dynamic cost of living information for cities, regions and countries around the world.
|Price per square foot – city center
|Price per square foot – outside of city center
Exactly what you ultimately pay for your Japanese property will also depend on the exchange rate you can get to convert your USD to yen to buy your Japanese home. While the dollar has been strong recently, exchange rate markups used by banks to process international payments can mean you’re paying more than you need to, without even knowing it.Compare your bank against some specialist services before you move any money to buy your new home – you might find you get lower fees and a far better exchange rate. Here are a couple of popular options to consider:
- Wise – fast payments to 70+ countries in 50+ currencies, with discounts on fees for high value payments.
- OFX – international transfers you can arrange online, in app and by phone with competitive rates for higher value transfers.
Financing a property purchase in Japan
If you’re not a Japanese resident you’ll probably struggle to get a mortgage or loan in Japan. That means you’ll likely need to pay for your property in cash from your savings or by taking out a mortgage in the US and using the funds from this to buy your Japanese property.
Whichever route you think you’ll take it’s worth getting professional advice to help you decide which option might suit you.
Getting an Japanese mortgage
As we mentioned above, it’s usually pretty tough to get a Japanese mortgage if you don’t have a long term residence permit there.
There’s actually no legal reason why a Japanese bank can’t offer a housing loan to a foreign non-resident – it’s just not common practice. One exception may be if you’re not a resident, but you have a Japanese spouse – in this case banks may be more likely to process your application.
If you’re applying for a mortgage in Japan it’s worth working through a broker who can help connect you with the banks with the most flexible approaches for foreign customers.
Paying property tax in Japan
The costs of buying a property in Japan are considered to be moderate, with all relevant costs being picked up by the buyer. These can include:
|Average % fee
|0.01% – 0.2%
|3.15% + fixed fee (around 530 USD)
|Total buyer cost
|13.26% – 13.45%
How easy is buying property in Japan for foreigners?
The main challenge you’re likely to face when buying a property in Japan sits around language, and the way the negotiation process usually works. Unlike in the US, it’s not common to have a protracted, auction style negotiation when agreeing a sale price. Low balling is likely to backfire. Between potential cultural pitfalls like this, and the other challenges of dealing in a foreign language, you’ll definitely need to have a great realtor with experience with dealing with foreign buyers, to lead you through the process.
If you are interested in buying property abroad, you can also check out our other guides:
- How to buy property in France
- How to buy property in Thailand
- How to buy property in Spain
- How to buy property in Italy
How to find a Japanese property
You’ll be able to start to get a picture of the type of property you can find in the location you’re interested in by browsing estate agency websites, including the ones we’ve picked out below. Many real estate agents work relatively locally, so it’s helpful to know exactly where you want to buy before you get too deeply into your house search.
Once you have an idea in mind of what you’re looking for, look for a reputable realtor who can help. Finding someone who speaks English, and who has worked with expat buyers before can pay dividends as they’ll know the differences in the local system compared to home buying in the US, and can prepare you for any challenges you may experience.
Japan property websites
Here are some great property websites to get some inspiration to help you find your Japanese dream home.
Conclusion: Can a foreigner buy a property in Japan?
There are very few restrictions when it comes to buying a home in Japan as a foreigner. And while house price rises haven’t been explosive, they have been fairly steady in the case of condos. Add that to the strength of the dollar against the yen and it’s no surprise many Americans are considering buying a property in Japan for themselves or as an investment.
Use this guide as a starting point to the process of house buying in Japan. And don’t forget, you could save money by using providers like Wise and OFX to buy your new home with a fast, cheap and secure international transfer, with good exchange rates.
FAQs on Buying Property in Japan
Can US citizens buy property in Japan?
Yes. US citizens can buy property in Japan with very few restrictions. The only restrictions you’ll usually face come if you’re trying to buy in a strategic location or near to any military facilities.
How much deposit do you need to buy a property in Japan?
The amount of deposit you need to pay is normally around 5% to 10% of the agreed purchase price.
Is Japan a good country to buy property?
Japan is considered a stable country, with low interest rates and steady house price growth, which can make it an appealing place to buy property. Consider your options carefully if you’re thinking of investing, and always take professional advice to help you get the best deal out there for your needs.