General Real Estate Purchasing Procedure in Japan

These processes apply to the transaction of both Commercial Properties
as well as Residential Properties between individuals, between companies and
between individuals and companies. You see below a simplified transaction.

  1. step1

    Locate properties for sale

  2. step2

    Submit LOI

    LOI = Letter of Intent
  3. step3

    Conduct Due Diligence

    Property defects will be identified in the "Property Disclosure Statement of Important issues" submitted by a Licensed Real Estate Broker.
    An Engineering Report and a Market Report are not usually needed.
  4. step4

    Sign PSA

    PSA = Purchase and Sale Agreement
The Date of Contract and the Date of Closing are usually different.
A 10-20% deposit is customarily required when the PSA is executed with the final payment made at closing. A SPC which requires detailed tax and legal structuring is not usually needed.

Brokerage Commission

Price of Real Property

Under 2,000,000yen =>
5% of the price + 8% consumption tax
Between 2,000,000yen ～4,000,000yen =>
4% of the price + 8% consumption tax
Over 4,000,000yen =>
3% of the price + 60,000yen + 8% consumption tax

Document required when signing contracts

  • ・Seal/signature(Please ensure to bring both parties' seal in case of joint ownership)
  • ・Passport
  • ・Affidavit
  • ・Application for registration of property rights transfer
  • ・Payment of remaining money and other costs
  • ・Key delivery

※You must get a judicial scrivener to carry out the process of registering the property rights trasfer for the real estate being purchased. We can introduce reliable judicial scriveners.

Contract-related fees

  • ・The fee for the revenue stamps attached to the sales contract10,000yen~160,000yen (If the purchase cost exceeds 1 billion yen, the fees will depend on the cost of the property.)
  • ・Brokerage fees (half the amount)

Fees related to settlement and handover

  • ・Brokerage fees (remaining amount)
  • ・Registration and license tax
    For registering ownership transfer, etc.
  • ・Payment to lawyers for registration procedure
    Approximately 100,000yen~150,000yen
  • ・Fixed asset tax, management tax, and other settlement fees
    Daily rate adjustment according to the handover date

Fees incurred after property handover

  • ・Real estate acquisition tax
  • ・Disaster insurance premiums
  • ・Moving costs
  • ・Renovation fees

Fees incurred yearly after property acquisition

  • ・Fixed asset tax
    Levied by the Japanese government, this is 1.4% of the value of the fixed asset
  • ・City planning tax
    Levied by the Japanese government, this is 0.3% of the value of the fixed asset
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