What are the costs involved to buying a property in Japan? How much are the brokerage commissions and scrivener fees in Japan? What about other costs I should be aware of?
PROPERTY BUYING PROCEDURES
|1||Offer and sign a Letter of Offer & Acceptance.|
|2||Upon seller acceptance, a contract signing appointment is arranged. A Juyoujikou Setsumeisho (Property Disclosure Statement or Seller’s Real Property Disclosure Statement) and a purchase contract is prepared by the realtor.
|3||At closing, the title is transferred. Both parties should have certificates of their seal impressions. Stamps are obtained, and government fees and taxes are calculated and paid to register the title. Pay the remaining balance.|
Please note: You can start negotiations once property has been chosen. If you do not engage the services of a translator, it is important to hire the services of a real estate agent, who can also act as your translator. Also, an offer or a letter of intent is not legally binding.
DOCUMENTS YOU NEED
- Registered personal seal or signature, otherwise, you will need to prepare a Seal or signature certificate
- Identification document (drivers license, passport)
- Certificate of residence (affidavit / declaration)
Different proofs of personal identification may be requested depending on your nationality.
These are the related costs paid by you, as the buyer.
|BROKERAGE||3% of sale price + ¥60,000 + 8% consumption tax|
|STAMP DUTY||Tax payable when exchanging sales contracts, loan agreements, etc.
The total amount varies depending on the value of the contract.
|DEPOSIT||10 – 20% upon signing the purchase contract.|
|MAKING & REGISTERING A PERSONAL SEAL||You need a Seal that has been registered with the municipality. Costs varies from around¥3,000. Visit this Inkan maker for an idea of the prices to expect. You should be looking at the Registered Seal category.|
|CERTIFICATE OF SEAL REGISTRATION||Depending on the municipality, registrations may be free or you pay a small fee of¥100. Certificates generally cost around ¥300.|
|OUTSTANDING BALANCE||BALANCE = SALE PRICE – DEPOSIT|
|TAXES YOU WILL BE REQUIRED TO PAY||Taxes applicable:
Please look at the Tax Notes below for details.
································ TAX NOTES ································
Sales of buildings and construction attract consumption tax. This is 8%. Sales of land are exempted from consumption tax.
REAL ESTATE ACQUISITION TAX
|Building, Purchasing or Renovating a residential property
Appraisal Value* x 3%
Reducing Measures : (Appraisal Value – Special Deduction of JPY12M) x 3%
|Case of Pre-owned Residence
Appraisal Value* x 3%
Reducing Measures : (Appraisal Value – Deduction Amount below) x 3%
REGISTRY LICENCE TAX
Tax for registering ownership or mortgage on a property. Separate registrations required for land and building. Generally, the appraisal value is calculated at around 50-70% of construction cost for building a property and around 70% of a purchasing price for land.
|Category||Tax Rate Necessary Registration(Reg.)||Reducing Measures*|
|New Residence||Land||Appraisal Value* x 2.0% (Reg. of Ownership Transfer)||x 1.5%|
|Building||Appraisal Value x 0.4% (Reg. of Ownership Retention)||x 0.15%|
|Pre-owned Residence||Land||Appraisal Value x 2.0% (Reg. of Ownership Transfer)||x 1.5%|
|Building||Appraisal Value x 2.0% (Reg. of Ownership Transfer)||x 0.3%|
|Loan Borrowing||Loaned Amount x 0.4% (Reg. of Mortgage Setup)||x 0.1%|
* Buildings and Land are subject to different sets of criteria in order for a Reducing Measure to be applied. Reducing rates valid until end of March 2017.
|Price on Contract||Construction Contract||Property Sales Contract||Loan Contract (if applying for loan)|
|Less than ￥1M||￥200||￥500||￥1,000|
|Less than ￥5M||￥200-1,000||￥1,000||￥2,000|
|Less than ￥10M||￥5,000||￥5,000||￥10,000|
|Less than ￥50M||￥10,000||￥10,000||￥20,000|
|Less than ￥100M||￥30,000||￥30,000||￥60,000|
|Less than ￥500M||￥60,000||￥60,000||￥100,000|
|Less than ￥1B||￥160,000||￥160,000||￥200,000|
Valid till 31 Mar 2018
JUDICIAL SCRIVENER FEES
A judicial scrivener (shiho shoshi) is a paralegal who settles and registers property transactions. Judicial scrivener fees are negotiable but are typically around 0.10% of the property value. However, it should be noted that there is no unified standard. Judicial scrivener fees are freely determined and the amount differs materially depending upon the judicial scrivener.