May 15, 2023
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Real Estate Agent for Foreigners in Kanagawa
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10:00 - 18:00(Mon-Tue,Thu-Sat)
Things to Know When a Non-Resident Foreigner Buys Real Estate in Japan
— A Practical Guide for Foreign Buyers Living Abroad
In recent years, interest in Japanese real estate from foreign buyers has grown steadily. Especially with the weak yen, we’re seeing more inquiries from people living overseas who want to buy a property in Japan — whether as an investment, vacation home, or future residence.
However, if you’re not living in Japan (i.e., a non-resident), there are several legal, financial, and practical differences to keep in mind compared to domestic buyers. As a professional who supports foreign buyers, I’ve put together a comprehensive summary of the key points for a smooth purchase.
✅ 1. Legal and Regulatory Considerations
■ Can foreigners buy property in Japan?
Yes — foreigners can freely purchase real estate in Japan. There are no nationality restrictions. However, non-residents (those without a Japanese address) are subject to certain legal reporting requirements.
■ Report to the Bank of Japan (Foreign Exchange Law)
Under the Foreign Exchange and Foreign Trade Act, non-residents who acquire real estate in Japan must submit a report to the Bank of Japan within 20 days of acquisition.
- Form: Form No. 17
- Submission method: Online or postal mail
- Submitted by: The buyer (non-resident)
(In practice, the real estate agent or judicial scrivener may assist.)
✅ 2. Contract and Registration Requirements
■ Replacing Japanese documents like Inkan Certificate and Juminhyo
Non-residents do not have a Japanese residence record, so the following documents are typically required for identity verification:
- Copy of passport
- Official proof of overseas address (e.g., utility bill or bank statement)
- Notarized signature certificate or affidavit from a local notary
■ Judicial scrivener handles the registration
A licensed judicial scrivener (shihō shoshi) handles property registration in Japan. For non-residents, verifying the buyer’s identity and intent is especially important.
An English-speaking scrivener is recommended. Power of attorney documents should be prepared with translations when needed.
✅ 3. Payment and Remittance Considerations
■ Money flow must be transparent (AML/CFT compliance)
Due to anti-money laundering regulations, the payment must follow strict procedures:
- The buyer must remit funds from their own bank account (name must match the contract).
- Payments from third-party accounts or cryptocurrency are not allowed.
■ JPY-based transactions and exchange risks
The sale price must be paid in Japanese yen (JPY). Be sure to explain:
- Exchange rate fluctuations
- Bank fees and transfer costs
✅ 4. Tax Responsibilities
■ Taxes when buying
Non-residents are still subject to the following taxes:
- Registration and license tax
- Real estate acquisition tax
- Stamp duty on the purchase agreement
■ Taxes when selling
When you sell the property, capital gains tax applies even for non-residents. In addition:
- 10.21% withholding tax may apply at the time of sale.
- The seller may need to file a tax return in Japan.
✅ 5. Practical Support and Considerations
■ Language support is essential
It’s strongly recommended to provide English translations of key documents such as contracts and explanations.
Instead of literal translations, focus on making sure the buyer understands the content. Partner with English-speaking real estate agents or legal professionals.
■ Notification and contact address
Since non-residents may not be in Japan regularly, it’s important to:
- Set up a notification address in Japan
- Appoint a Tax Agent to receive tax documents if necessary
■ Housing loans are generally unavailable
Japanese banks typically do not offer mortgages to non-residents. Most foreign buyers purchase with cash.
Some exceptions may apply through major banks or foreign-affiliated institutions.
✅ 6. Recommended Support Structure
| Area | Recommended Approach |
|---|---|
| Contract documents | Provide English versions or summaries with clear explanations |
| Judicial scrivener | Work with English-speaking professionals |
| Bank transfers | Confirm timeline and name-matching for overseas remittances |
| Bank of Japan reporting | Clarify the need for reporting (Form 17) and offer support |
| After-purchase support | Establish a local contact address and manage tax notices |
✍️ Final Conclusion
Buying real estate in Japan as a non-resident involves additional steps and documents, but it’s absolutely possible with the right preparation and support.
If you understand the differences and work with experienced professionals, the process can be smooth and secure.
We support foreign buyers from start to finish — from explaining procedures to handling aftercare. If you’re considering buying in Japan, feel free to reach out for personalized advice.
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