Comprehensive Cost Analysis: What to Expect When Purchasing Japanese Property


The Japanese real estate market offers unique opportunities and challenges for investors and homebuyers alike.

This article delves into the myriad costs associated with property transactions beyond the listing price,

helping you to budget effectively and navigate the market with confidence.

Understanding Purchase Costs

When buying property in Japan, costs extend far beyond the advertised price.

These vary based on the property’s location, type, and the transaction’s specifics.

Brokerage Fees: (Shiho-shoshi, 司法書士)

In Japan, brokerage fees for real estate transactions typically consist of 3% of the property’s sale price, an additional fixed fee of 60,000 yen,

and a consumption tax, which is currently at 10%.

These fees are payable to real estate agents (buying agents).


Similarly, when you decide to sell your property through agents, the same fee structure applies.

You will need to pay 3% of the property’s sale price, plus a fixed fee of 60,000 yen,

along with the 10% consumption tax currently applicable.

These fees are payable to your selling agents.

Direct sales by owners can eliminate these fees, offering significant savings.

Direct sales by owners can eliminate brokerage fees, offering significant savings.

However, given the complexities of legal systems, potential language barriers, and varying business customs/rules in Japan,

I strongly recommend using a licensed real estate agent when buying or selling your property.

Their expertise ensures a smoother transaction and helps navigate the intricacies of the real estate market effectively.

(I know this sounds like a position talk)

Loan-Related Costs:

Financing typically involves a loan processing fee, which can range from 1% to 3% of the loan amount,

and variable interest rates, significantly affecting long-term costs.

For example, on a loan of 64 million yen, the processing fee would be 640,000 yen at 1% and 1,920,000 yen at 3%.

This clearly explains the impact of processing fees on the overall costs of financing.


Detailed Look at Major Costs

Key expenses include:

Registration and License Taxes(Tourokumenkyo-zei, 登録免許税):

Uniform across Japan, these include 2% for land transfers and 0.4% for new buildings.

Judicial Scrivener Fees:(Shiho-shoshi, 司法書士)

The legal fees for registering your property typically range from 100,000 to 300,000 yen, depending on the complexity of the transaction.

Additionally, if the bank requires a separate judicial scrivener to be present at the time of the final payment,

the buyer is responsible for covering the costs of both the seller’s nominated scrivener and the bank’s nominated scrivener.



Insurance Needs for Property Owners

Essential for protecting your investment and fulfilling mortgage requirements:


Fire Insurance:

Covers damages from various disasters, with premiums for a property valued at 80 million yen typically ranging

from 360,000 to 440,000 yen annually with earthquake coverage.


Earthquake Insurance:

Highly recommended in Japan, with additional costs based on the fire insurance policy.


Real Estate Acquisition Tax(Fudousan-shutoku-zei 不動産取得税): A Case Study

For a better understanding, let’s consider a detailed simulation based on an 80 million yen property,

split into 30 million yen for land and 50 million yen for the building:

Land Valuation and Tax:

With the land valued at 30 million yen, and assuming a fixed asset tax valuation at 70% (21 million yen),

the acquisition tax at a reduced rate of 3% would be 630,000 yen.


Building Valuation and Tax:

For the building valued at 50 million yen, with a typical fixed asset tax valuation at 60% (30 million yen)

and considering the taxable standard amount is half of the assessed value for residential buildings (15 million yen), the acquisition tax would be 450,000 yen.

This results in a total acquisition tax of 1,080,000 yen for an 80 million yen property, illustrating the additional costs buyers can expect to pay.


Variable Costs That Can Affect Your Budget

These include moving costs, which can vary widely depending on distance and belongings, and optional upgrades

like high-quality kitchens or smart home technology that enhances the property’s value and living experience.


Strategies to Minimize Costs

Effective strategies such as comparison shopping and negotiation can significantly reduce costs.

It’s crucial not just to find the right property but to manage the purchase smartly to ensure value for money.


Buying property in Japan involves understanding a complex array of costs.

With detailed planning and strategic purchasing, you can navigate these challenges effectively.


This guide aims to provide the knowledge needed to tackle these issues confidently.

For more insights and assistance with your real estate transactions in Japan, consult with a professional.

Subscribe to our YouTube channel for more updates and expert advice,

ensuring you navigate the Japanese real estate market with ease and confidence.



Toshihiko Yamamoto Real Estate Investment Consultant, Author, and Founder of Yamamoto Property Advisory, Tokyo

Licensed Real Estate Broker (Japan)

Toshihiko specializes in assisting foreign companies and individuals in purchasing, managing, and selling properties in Japan. 

He holds a Bachelor’s degree in Economics from Osaka Prefecture University and an MBA from Bond University, Australia.

Discover Toshihiko’s expertise in his book,

“The Savvy Foreign Investor’s Guide to Japanese Properties: How to Expertly Buy, Manage, and Sell Real Estate in Japan,”

available now on Amazon, iBooks, and Google Play.

Please connect with us via social networks including Instagram, WhatsApp, and LINE for more information and assistance.





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