Buying Guide Purchase Costs

Purchase Costs

When purchasing a property in Japan, typically the cost of acquisition including the taxes and fees will come to about 6 - 8% of the price of the property.

Below is the summary of costs that apply to individual investor when purchasing real estate in Japan on a non-commercial basis. When investors purchasing Japan real estate as an business entity, investors need to consider the set up cost of an investment structure as well other expenses involved in the due diligence process when investing in non-residential real estate.

Please also note that tax rates quoted below are the standard rates and reducing measures may apply to those who meet conditions such as resident status and property types.

1. Tax and Stamp Duty

  • Stamp Duty

    Stamp duty is the tax levied on the sales contract from JPY200 up to JPY 540,000 JPY according to the amount of the sales contract. 
    Click here to learn more about Japan tax requirements.

For example, if the sales contract is JPY 50,000,000, the tax will be JPY 15,000.

  • Registration Tax

    This tax paid to the government for registration to transfer property ownership. 
    Click here to learn more about Japan tax requirements.

For building, the rate is 2% of the fixed assessed asset value.
For the land, the rate is 1.3% of the fixed assessed asset value.

  • Fixed Assets Tax and City Planning Tax

    Tax collected annually on January 1 on individuals whose names are registered as the owner on January 1. It is common for the buyer and the seller to split the tax fee on prorated basis for the period of ownership during that year. 
    Click here to learn more about Japan tax requirements.

Fixed asset tax rate is 1.4% of the fixed assessed asset value.
City planning tax rate is 0.3% of the fixed assessed asset value.

  • Real Estate Acquisition Tax

    This tax is imposed on those who have acquired real estate through trading, exchange, gift, new construction, expansion, renovation, etc. 
    Click here to learn more about Japan tax requirements.

The real estate acquisition tax rate is normally 4% of the pre-determined asset value.

2. Legal Fee

  • Involvement of lawyers is usually limited to transactions that are complicated or sizable in amount. On the other hand, judicial scriveners who are licensed to handle real estate registration matters are involved in almost all real estate transactions.

For a property of JPY 100,000,000 the fee should be about JPY 100,000.

3. Realtor Brokerage Fee

  • All resale transactions in Japan require buyers to pay a government prescribed agent’s brokerage fee. Payments to the brokerage company are indicated on a required legal document called ‘Explanation of Important Matters’. The buyer and realtor must sign and execute the document before concluding a purchase agreement and this executed document can be used as evidence of the payment responsibility.

The official rate is 3.15% of a purchased value plus JPY 63,000, inclusive 5% consumption tax.

4. Financing Related Fees

  • Loan expense refers to loan processing fees and loan warranty fees. The fee differs according to each financial institution.

5. Insurance Fee

  • Insurance fee refers to fees such as fire insurance fee. Insurance fee differs according to each property.