When buying real estate in Japan it is very important to know what’s going to be the total cost of owning the property because then accordingly you can do financial planning. The purpose of this informative post is not to intimidate you, but to prepare you and make you fully equipped in terms of knowledge, before you decide to buy real estate in Japan. The more detailed information you have, the better equipped you are.

The following factors and expenses will have a direct impact on the total cost of buying real estate in Japan:

  1. Stamp duty
  2. Real estate registration tax
  3. Real estate agent commission
  4. Fixed asset tax
  5. City planning tax
  6. Consumption tax
  7. Commission for the legal scrivener
  8. Interest rate on the loan
  9. Fire and earthquake insurance premium
  10. Real estate acquisition tax
  11. Maintenance and management cost

All in all, the total cost of buying real estate in Japan may be 6-7% in addition to the purchase price or the value of the property. To get a precise idea of how much you will spend on the property you are purchasing you must closely work with your real estate agent.

Below we are discussing individual aspects of the various costs that you’re going to incur when purchasing real estate in Japan.

Stamp duty when buying real estate in Japan

The stamp duty or stamp tax depends on the purchase value of the property. It can range between ¥ 600-¥ 60,000+.

When you purchase real estate in Japan, you will have to sign a sales contract or mortgage contract along with the seller. After you have signed the contract, you will need to paste a revenue stamp on it. The cost of getting this revenue stamp is called “stamp duty” or stamp tax.

Listed below are various brackets that have a direct impact on the stamp duty that you pay (also mentioned are the reduced tax rates that are applicable to real estate transactions happening between April 1, 2018 and March 31, 2020):

Purchase priceStamp duty/taxReduced rate
¥ 100,000-¥ 500,000¥ 400¥ 200
¥ 500,000-¥ 1 million¥ 1000¥ 500
¥ 1 million-¥ 5 million¥ 2000¥ 1000
¥ 5 million-¥ 10 million¥ 10,000¥ 5000
¥ 10 million-¥ 50 million¥ 20,000¥ 10,000
¥ 50 million-¥ 100 million¥ 60,000¥ 30,000
¥ 100 million-¥ 500 million¥ 100,000¥ 60,000

Real estate registration tax

When a real estate property exchanges hands, the property documents need to be registered in your name as you are the new owner. This is called the real estate registration tax or the real estate registration fee or even property registration fee. On an average it can be 2% of the fixed asset value but can vary based on different factors. The judicial scrivener decides how much real estate registration tax you must pay when buying property in Japan. You may also have to pay real estate registration tax if you’re taking out a mortgage on a property.

This is how your registration tax may be calculated:

1.5% of the fixed asset value of the of the land + 0.3% of the value of the building (dependent upon the condition that the floor area of the building is over 50 m², the age of the property and whether it is going to be used for residential purpose).

In case this is your second purchase, or you plan to rent out the property, the tax may be 2% of the fixed asset value of the building.

In case of a mortgage, the calculation will be 0.4% of the value of the mortgage and in certain cases, if the property is being used for residential purposes, the tax may be reduced to 0.1%. Your real estate agent will be able to provide the right information regarding this.

Real estate agent commission

For all the work your real estate agent puts in, he or she is going to have to charge you a fee. The brokerage fee is usually calculated as such:

3% of the base price + ¥ 60,000 + consumption tax, which is currently 8%.

The base price is different from the purchase price. It is minus the consumption tax. Consumption tax is paid by the seller and it is charged on the building portion of the real estate property if the seller is a company.

Fixed asset tax and city tax

These taxes depend on a specific property and a specific city but more or less, for the property it is 1.4% of the fixed asset value and for the city tax it is 0.3% of the asset value. Since these taxes are variable it would be better if you consult with your real estate agent in Japan to know the exact amount.

You may also have to pay the fixed tax on pro rata basis, that is, since the fixed asset tax needs to be paid annually, within that year, for the duration for which the property has been with the original owner he or she may have to pay his or her share of the tax and once the property has been transferred to you, you will need to pay the remaining tax for the year.

If the property is jointly owned the complete tax amount needs to be paid. One owner cannot pay his or her portion of the tax and then claim that his or her responsibility is over. For example, if the total fixed asset tax is ¥ 40,000 and there are two owners, A and B, and if A pays his or her portion of ¥ 20,000 it won’t be accepted. On the other hand, if A (or B) pays the entire amount of ¥ 40,000, the tax will be deemed as accepted both for A and B. Again, it would be better if you closely consult with your real estate agent to work out the nitty-gritty of this tax.

Consumption tax

Consumption tax is applied on the sale of a building or house, but not the land, as, ownership of buildings and land are separate rights in Japan when you are dealing with real estate. Currently consumption tax is 8% but the government may decide to revise it in near future.

Commission for the legal scrivener

A legal scrivener assists you in the real estate registration procedures and the preparation of legal documents. This fee may be around ¥ 100,000 but it may differ from city to city.

Interest rate on the loan

If you arrange for funds for buying property in Japan, from a bank, you will be paying an interest on the loan that you have taken. How much interest you pay depends on the relationship that you have with the bank so it may be different for different loan amounts and different individuals. Nonetheless, it should be added to calculate the total cost of buying real estate.

The loan amount can be anywhere between ¥ 100 million-¥ 500 million. The floating interest rate can be 2.475% of the loan amount and when the preferential interest is applied, it could be 0.5-1.0%. Fixed rate loan can be 1.2-2.0%.

You can get 70-80% of the purchased amount to 90% of the assessed value of the property. The assessment will be done by the financial institution. The annual amount of the installment that you pay can vary between 25-35% of your annual income.

You will also need to add the guarantor and guarantee charge. Before you can get a loan to buy a real estate property in Japan, you need to obtain a guarantee from the Credit Guarantee Company. The guarantee charge will be included in the loan interest and it can amount to around ¥ 32,400-¥ 108,000.

Although you may like to go for a financial institution or a bank according to your preference, two banks you may like to check out for their various real estate purchasing loan options are the SMBC Trust Bankand Shinsei Bank. Both these banks provide very friendly home mortgage and real estate loan packages.

Fire and earthquake insurance premium

These are optional costs. Fire insurance premium is sometimes conditioned upon the loan that you take. Earthquake insurance can be taken along with the fire insurance, but it isn’t available on its own. You may also like to find out the maximum payouts in case of damage caused by fire or earthquake. Similarly, the premium amount depends on the insurance policy that you take. 

Real estate acquisition tax

This is one-time tax when you purchase a piece of land or a building. For residential real estate it is 3% and for non-residential, 4%. Acquisition tax is applicable when buying and selling of real estate, donating real estate, exchanging it and constructing it, though, it is not applicable if the property is inherited.

Real estate property maintenance and management cost

This is a recurring cost, especially when you live in an apartment building. An apartment building means there are multiple apartments in the same building and the real estate property exists as the residential complex and the responsibility of its upkeep rests upon all the residents. Normally there is a committee or an association that is often formed of the residents themselves, that takes care of the maintenance of the building. How much you pay depends on the size of your property, but it can range anywhere between ¥ 350-¥ 600 per square meter.


So, as you have seen, when you need to calculate the total cost of buying real estate in Japan, you need to factor in all the associated costs, taxes, commissions, fees and recurring expenditures that you must bear. Hopefully, this post will help you in financially planning your next real estate property purchase in Japan. For more information, explore other sections of this website or contact us.