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Buying Real Estate in
Japan
- Who can buy?
There are no restrictions on buying property in
Japan. Anyone can buy. Properties can be bought by
individuals or corporations. Trusts are not common
in Japan, and it can be difficult to purchase in the
name of a trust. The easiest solution is generally
to get the trust to set up a corporate entity.
- The Purchase
Process
Once a property and price has been decided on, a
disclosure document must released prior to a
contract being signed. A licensed Real Estate agent
must go over the disclosure documents, and they are
required to produce proof of the license, as well as
record these details in the disclosure document. The
disclosure document should include all matters
relating to the property as well and the
registration details of the agent and the authority
where the agent has paid their bond to.
Once the disclosure document is completed and signed
and then the deal can go to contract. In Japan most
Real Estate contracts are drawn up by the Real
Estate Agents, however customers are more than
welcome to have a lawyer go over the details. The
contract spells out all the details of the
transaction and includes the deposit amount, dates
for settlement, penalties for default and any other
legal issues with the property.
The contract is signed on the day the deposit is
made.
*The contracts and disclosure agreements are in
English and Japanese, with the Japanese version
being the legally binding one. Jurisdiction is under
the Japanese court system, and the Hakuba area is
covered by the Matsumoto District Court.
Once the contracts are signed and the deposit is
paid then each party prepares the documents required
for the transfer of title. If the buyer is not
resident in Japan, then they need to obtain an
affidavit of identity from a certified authority
(generally a justice of the peace in most western
countries). They also need to sign a power or
attorney to a solicitor to handle the transfer of
titles. The last document required is a contract
with the Real Estate Agent for their commission (in
Japan both the buyer and seller pay a commission to
the broker).
On the day of transfer, the solicitor will take the
documents firstly from the seller, and verify that
all impediments to the sale have been removed, and
then from the buyer. Once the solicitor has verified
that the property is able to be transferred and has
the documents from the seller to do this, payment is
made from the buyer to the seller.
The solicitor then takes all the
documents to the Legal Affairs Bureau and
registers the transfer of titles. New titles take
7-10 days to be issued. The new titles must be held
securely as the represent ownership of the property.
- Fees
Total fees generally come to about 6-7% of the sale
price of the property.
Agents commissions are approximately 3% + sales tax,
but this can vary depending on the price of a
property.
Legal Fees cover the transfer of titles,
registration tax and the solicitor's fee.
Real Estate Acquisition tax is levied about 3 months
after purchase.
Property Tax adjustment (Rates) are calculated from
the dates of transfer. The seller pays from Apr 1
until the date of transfer, while the buyer pays
from the date of transfer to Mar 31.
*Once the price has been agreed upon by the parties
it is possible to get an accurate statement of all
fees associated with the transaction.
- Finance
Unless you have a permanent resident visa, it is
almost impossible to lend from an Japanese financial
institution. First purchases will generally have to
be made with finance from your home country. Once
you have established a presence in Japan you may be
able to lend money, but the banks will require a
minimum of 3 years of tax returns.
- Visas
It is important to realize that owning property does
not give you the right to reside in Japan. If you
plan on being here for the ski season only, then a
tourist visa will suffice, however if you wish to
reside long term in Japan, there is a lot of
paperwork to be done.
The easiest option seems to be to purchase as a
corporate entity, and once the property has been
transferred, then establish a branch office in
Japan. Once the branch office is in place then an
immigration lawyer will be needed to help you on the
path to getting an investor visa.
A good place to ask for advice is the nearest JETRO
office in your country of residence.
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