Posted on: 4 August 2025

Understanding Japan’s Property Laws for Foreign Buyers

Japan's property market has increasingly attracted international investors, expatriates, and retirees seeking a second home or investment opportunities. With its unique culture, economic stability, and urban lifestyle, cities like Tokyo and Osaka present enticing options.

For foreigners buying property in Japan, understanding the legal procedures and financial considerations is essential, as these can differ significantly from other countries.

Read on as we provide an in-depth look at Japan’s property laws for foreign buyers and offer practical advice for a smooth purchasing process.

Can foreigners buy property in Japan?

Yes, foreigners can buy property in Japan without restrictions. Unlike some countries, Japan does not impose nationality-based limitations on land or building ownership. This freedom applies to all types of property, including apartments, houses, and commercial spaces. Therefore, whether you want a small apartment in the city or a countryside retreat, foreign buyers enjoy the same legal rights as Japanese citizens.

While owning property does not grant residency or a visa, it can form part of a long-term plan for living in Japan. Prospective buyers must still comply with immigration regulations if they intend to reside in the country. For example, non-residents may require a long-term visa or residency status to live in their property full-time. Many buyers also use their Japanese property for vacation rentals or short-term stays, which is increasingly popular in major urban areas.

Purchasing property in Japan can also be a strategic investment. Japan's urban areas, particularly Tokyo, have consistently shown resilience in property value over the years. Despite market fluctuations, demand for residential and commercial property remains high, providing attractive opportunities for foreign investors.

Legal requirements for purchasing property

Foreign buyers must meet specific legal requirements when purchasing property in Japan. A common mistake made when purchasing homes in Japan is overlooking these requirements, so understanding them ensures compliance and reduces the risk of issues during or after the purchase.

• Identification: Non-residents typically need a valid passport and may be asked to provide additional documentation, such as an affidavit or proof of income. Residents are required to present their residence card and personal seal, known as a hanko, which serves as a legal signature in Japan.
• Financial considerations: While there is no restriction on foreign ownership, securing a mortgage can be more challenging. Many Japanese banks require applicants to have permanent residency or a long-term visa. Without this, foreign buyers often purchase property outright. Some banks may offer loans to non-residents, but approval criteria are strict, and interest rates may be higher. For those looking to finance their purchase, it is advisable to work with a bank familiar with international clients or engage a mortgage broker specialising in foreign buyers.
• Reporting requirements: Non-resident buyers may need to report their property acquisition under the Foreign Exchange and Foreign Trade Control Act within 20 days of purchase. This process ensures transparency in international financial transactions and helps the Japanese government monitor property purchases by foreign nationals.

It is also essential to understand the property registration process. All property in Japan must be registered with the Legal Affairs Bureau. Registration includes information about the owner, property size, and location. Once registered, ownership is legally recognised, and the buyer assumes all rights and responsibilities associated with the property.

The property buying process

Purchasing property in Japan involves several structured steps. Following this process carefully ensures a smooth transaction and reduces the likelihood of misunderstandings.

1. Property search: Begin by identifying your preferred location, budget, and type of property. Urban centres like Tokyo and Osaka offer apartments, condos, and townhouses, while rural areas provide larger homes and land parcels. Online platforms and local real estate agents are useful resources for browsing listings and understanding market trends.
2. Engage a real estate agent: Working with a licensed agent is highly recommended. Agents familiar with assisting foreign buyers can guide you through legal, financial, and procedural aspects. They can also help you negotiate pricing and understand local market conditions.
3. Make an offer: Once a property is selected, submit a formal offer. The seller may accept, reject, or negotiate the price. Upon agreement, a sales contract is signed, outlining all terms, including price, payment schedule, and property condition.
4. Due diligence: Conduct inspections to verify the property’s condition and ensure compliance with building regulations. Legal checks confirm there are no outstanding debts, liens, or zoning violations associated with the property.
5. Finalising the purchase: The final step involves registration of the property in the buyer’s name, payment of taxes and fees, and transfer of ownership. The property is now legally yours, and you can manage it according to your plans, whether for personal use or investment.

Costs associated with purchasing property

Buying property in Japan involves more than just the purchase price. Buyers should budget for additional costs, which typically account for 6–8% of the property value.

• Registration and licence tax: This tax is usually around 6% of the property value.
• Agent’s commission: Real estate agents charge approximately 3% of the purchase price plus ¥60,000.
• Notary and legal fees: Legal assistance is recommended to navigate contracts and property law, with fees varying based on transaction complexity.

Other potential costs include property maintenance fees, insurance, and management fees for condominiums or apartments. Being aware of these expenses in advance ensures better financial planning and avoids surprises after purchase.

Considerations for buying an apartment in Tokyo

Tokyo’s real estate market is highly dynamic and offers a wide range of properties. Buyers interested in apartments should consider several factors:

• Building age and condition: Older apartments may have lower purchase prices but often require maintenance or renovations.
• Management fees: Many condominiums have monthly maintenance fees and reserve funds for repairs. These costs should be factored into your long-term budget.
• Location: Proximity to public transportation, schools, supermarkets, and cultural amenities affects both convenience and property value. Well-connected neighbourhoods typically maintain higher resale value.
• Legal considerations: Ensure the property complies with zoning laws, building codes, and earthquake safety standards. Japan’s strict regulations ensure structural safety, which is particularly important in a seismically active country.

Foreign buyers often focus on areas popular with expatriates and international businesses. Central districts like Shibuya, Shinjuku, and Minato are in high demand, providing both investment potential and lifestyle convenience.

Future outlook for foreign property ownership

Japan currently imposes no restrictions on foreign property ownership, but potential changes may occur. The government has established a new administrative body to address concerns about foreign ownership, particularly in rural areas or smaller islands. Discussions focus on preserving local communities, preventing depopulation issues, and ensuring property is managed responsibly.

Despite potential regulatory adjustments, Japan remains an attractive destination for foreign investors. Demand for high-quality apartments and commercial spaces continues to grow, especially in Tokyo, Osaka, and other major cities. Staying informed about legislative updates ensures foreign buyers can make strategic, long-term investment decisions.

Conclusion

Purchasing property in Japan as a foreigner is both feasible and rewarding. With no nationality restrictions, foreign buyers can legally own land, houses, and apartments. Understanding the legal requirements, financial obligations, and procedural steps is essential for a smooth experience. Whether you wish to buy an apartment in Tokyo or invest in a rural property, Japan’s real estate market offers diverse opportunities with potential for growth.

For personalised guidance and expert advice, JP Homes can assist with navigating Japan’s property market. Our experienced team helps foreign buyers find suitable properties, handle legal processes, and ensure a seamless purchase from start to finish.