How to Buy a House in Japan as a Foreigner: The Complete 2026 Guide (With Bank Loans)

For many foreigners living in Japan, buying a home feels like a distant aspiration — something complicated by language barriers, residency status anxieties, and a property market that operates nothing like the one back home. The reality is more encouraging than most people expect.

Japan imposes no legal restrictions whatsoever on foreign property ownership. You can buy land, a house, or an apartment as a foreigner regardless of your nationality, your visa status, or even whether you live in Japan at all. The taxes you pay are identical to those paid by Japanese citizens. There are no special "foreigner surcharges" at the legal level.

What does get complicated — particularly if you want to finance the purchase with a bank loan rather than cash — is your residency status and the relationship between that status and Japanese lenders. That is where this guide goes deepest.

By the end of this article you will understand the full end-to-end process of buying a home in Japan, exactly which banks will lend to foreigners (and under what conditions), how much everything costs, what taxes to expect, and the key mistakes that derail first-time foreign buyers.

The Fundamental Truth: You Can Buy. The Question Is How You Finance It.

Let's establish this clearly before going any further.

Buying property in Japan as a foreigner — no problem. No application to a government authority, no special approval, no residency requirement. Sign the contract, register the title, and the property is yours. Full freehold ownership, on land and building, with no time limit. It can be sold, rented, or inherited freely.

Financing that purchase with a Japanese bank loan — more complicated. Japanese lenders are not legally prohibited from lending to foreigners, but most major banks have internal policies that make them reluctant to lend to non-permanent residents. Their core concern is flight risk: a foreign borrower who leaves Japan has no legal obligation to continue servicing a Japanese mortgage, and recovering assets from abroad is expensive and often impractical.

This is the central tension of the foreign homebuyer experience in Japan. Understanding where you sit on the residency spectrum — and which lenders correspond to your situation — determines which path you take.

Who Can Get a Mortgage in Japan as a Foreigner?

Japanese mortgage eligibility for foreigners falls into three broad tiers in 2026.

Tier 1: Permanent Residents and Special Permanent Residents

If you hold permanent residency (PR) or special permanent residency (granted to certain long-term Zainichi Korean and Chinese residents), you are treated nearly identically to a Japanese citizen by most lenders. You can access the full range of mortgage products — including the government-backed Flat 35 program — at the same interest rates, with standard down payment requirements of around 10% to 20%, and with no additional documentation burden beyond what Japanese borrowers face.

For PR holders, the mortgage market in Japan is genuinely excellent: variable interest rates starting from around 0.18% to 0.3% at online lenders in early 2026, Flat 35 fixed rates around 1.8% to 2.1% for qualified applicants, and loan terms of up to 35 years. If you have PR and meet standard income criteria, buying a home in Japan with a mortgage is a very realistic and financially attractive option.

Tier 2: Long-Term Visa Holders (Work Visa, Spouse Visa, Long-Term Resident Visa)

This is where most foreigners in Japan actually sit — employed on a work visa, or here on a spouse or long-term resident visa, without yet having obtained permanent residency.

Major Japanese megabanks (MUFG, Mizuho, Sumitomo Mitsui Banking Corporation, Resona) will generally not approve mortgage applications from non-permanent residents. However, a group of specialized and mid-tier lenders actively compete for this market and have developed products specifically designed for foreign residents without PR. Requirements are stricter, down payments are higher, and rates carry a small premium — but mortgages are achievable for well-qualified applicants.

Requirements that typically apply for Tier 2 applicants as of 2026:

• Valid long-term visa with remaining validity (most lenders want at least 1 year remaining)

• Minimum 1 to 3 years of stable employment in Japan with the same employer

• Annual income of at least ¥4–5 million (higher income requirements than for PR holders)

• Down payment of 20% to 30% (versus 10–20% for PR holders)

• Japanese language ability sufficient for contract discussions (some lenders are stricter than others on this point)

• Loan amount typically capped at 8 times annual income

Tier 3: Non-Residents and Short-Stay Visa Holders

Foreign nationals who live outside Japan, or who hold only short-stay visas (tourist, business visitor), cannot access standard Japanese residential mortgages. If you wish to buy Japanese property from abroad as a pure investment or vacation home, you are looking at a cash purchase, an investment property loan (which carries lower loan-to-value ratios and higher rates than residential loans), or financing through a private bank or international lender in your home country that accepts Japanese property as collateral.

The Foreigner-Friendly Banks: Who Will Actually Lend to You in 2026

This section is the one most guides get wrong — either listing banks that have quietly tightened their policies, or failing to explain the practical differences between lenders. Here is the current picture as of early 2026.

SMBC Trust Bank Prestia — Best Overall for Non-PR Foreigners

Prestia (the retail banking arm of SMBC Trust Bank, inherited from Citibank Japan's operations) is widely regarded as the most accessible major bank for foreign residents without permanent residency. It has the longest track record of serving international clients and offers English-language support throughout the application process.

Key Prestia mortgage conditions (2026):

• Permanent residency not required

• Minimum annual income: approximately ¥5 million from the previous year

• Stable employment required (at least 1 year with current employer, preferably longer)

• Age 20 or older; loan must be fully repaid by age 80

• Group credit life insurance enrollment required as part of the loan

• Loan amounts from ¥1 million to ¥100 million

• Repayment terms up to 35 years

• English support available

Prestia is particularly well-regarded for borrowers employed by major international companies or well-known Japanese corporations, as employer reputation is factored into their assessment.

Tokyo Star Bank — Star Mortgage for Non-PR Applicants

Tokyo Star Bank offers the "Star Mortgage," explicitly designed for non-permanent residents with stable income and long-term employment. It is one of the few banks that assesses each application individually rather than applying blanket PR requirements.

Key Tokyo Star Bank conditions (2026):

• Permanent residency not required

• Loan amounts from ¥500,000 to ¥100 million

• Repayment periods from 1 to 35 years

• Case-by-case assessment based on income, employment stability, and length of Japan residence

• No guarantor required for qualified applicants

• English-language support available at key branches

The trade-off with Tokyo Star Bank's flexibility is that rates can be slightly higher than the best variable rates at online banks, and terms may be more conservative (shorter repayment periods, lower loan-to-value ratios) for applicants with shorter Japan residency history.

SBI Shinsei Bank — English-Friendly with No PR Requirement

Shinsei Bank (now part of the SBI Group) has a history of catering to international clients and actively accepts foreign residents without permanent residency, provided they hold a valid residence card and can demonstrate stable Japanese income.

Key Shinsei conditions (2026):

• Valid zairyū card required; permanent residency not mandatory

• Typically requires at least 2 years of work history in Japan

• Reliable income from Japanese employment

• English-language support available

• Competitive variable rates for qualified applicants

AEON Bank — Accessible with Stricter Structure

AEON Bank offers mortgage products to non-PR foreign residents but structures the loan more conservatively to offset the perceived risk.

Key AEON Bank conditions (2026):

• No work restrictions on visa (must hold visa permitting unrestricted work activity)

• Employed applicants: minimum 6 months with current employer

• Self-employed applicants: minimum 3 years in business

• Must be able to read and write Japanese

• Minimum down payment of 20% of the property price

• Repayment period may be capped at shorter terms than standard

• Interest rate premium applies above base variable rate

Suruga Bank — Specialist for Difficult Cases

Suruga Bank has carved a niche in lending to applicants who fall outside the criteria of larger institutions, including foreigners without permanent residency. Their "Special Mortgage for Foreigners" considers applications on a case-by-case basis, with particular weight given to demonstrated commitment to remaining in Japan (length of residence, stable employment history, family ties).

No guarantor is required under Suruga's standard foreign mortgage product, which is notable given that many lenders require a Japanese citizen or permanent resident guarantor for non-PR borrowers.

The Flat 35 Program — For PR Holders Only

The Flat 35 is a government-backed fixed-rate mortgage administered through the Japan Housing Finance Agency (JHF) and offered via partner banks. It provides a fixed rate for the entire loan term (15 to 35 years), which offers protection against the interest rate increases the Bank of Japan has been implementing since 2024.

As of January 2026, Flat 35 rates range from approximately 1.82% to 2.1% depending on the term and lender. The Flat 35 is only available to permanent residents and Japanese nationals for primary residence purchases. Non-PR foreigners are not eligible.

For PR holders, however, the Flat 35 is worth serious consideration in the current rising-rate environment, as it locks in a fixed rate before further Bank of Japan policy tightening potentially pushes variable rates higher.

2026 Mortgage Interest Rates at a Glance

Japan's interest rate environment changed meaningfully in 2024 and 2025. The Bank of Japan raised its policy rate twice — for the first time in 17 years — bringing it to 0.75% as of December 2025. This has begun pushing variable mortgage rates upward from the near-zero levels that characterized the previous decade. The era of 0.4–0.5% variable rates for all borrowers is fading.

Important note on variable rates in 2026: With the Bank of Japan continuing a gradual normalization of monetary policy, locking in a fixed rate for at least the medium term is worth serious consideration for any buyer who will be sensitive to payment increases. Stress-test your budget at a rate 1–2 percentage points above your current variable rate before committing to a loan.

Step-by-Step: The Complete House Buying Process in Japan

Step 1: Establish Your Budget and Financing Position

Before you look at a single property listing, know your numbers. This means:

• Calculating your realistic borrowing capacity (typically up to 8 times annual income, with monthly repayments not exceeding 30–35% of monthly gross income)

• Determining your down payment (at least 20% if you are a non-PR foreign resident; 10–20% if you hold PR)

• Budgeting for closing costs and taxes on top of the purchase price (see the detailed cost section below — plan for 7–10% of the property price on top)

• Getting a preliminary mortgage consultation or pre-approval from a lender before making offers

Many foreign buyers underestimate the closing cost layer. On a ¥50 million property, closing costs can reach ¥3.5–5 million — this is cash you need in addition to your down payment, and it cannot be borrowed.

Step 2: Find a Real Estate Agent

In Japan, real estate agents are licensed under the Building Lots and Buildings Transaction Business Act and must hold a registered real estate license (宅地建物取引業免許). This is a regulated profession with clear obligations.

For foreign buyers, finding a bilingual agent — or an agency that actively serves international clients — is not just convenient; it is practically essential. Contracts, property documents, and legal disclosures are all in Japanese, and the nuances matter. Errors or misunderstandings at the contract stage are costly and difficult to reverse.

The agent's commission is regulated by law: a maximum of 3% of the sale price plus ¥60,000, plus consumption tax. On a ¥50 million property, this is approximately ¥1.71 million including tax. The buyer and seller each typically pay their own agent. If one agent represents both sides (dual agency), they collect from both parties.

Agencies with established foreign buyer services in Japan include:

• Housing Japan (Tokyo-based, English-speaking, strong track record with international buyers)

• Plaza Homes (bilingual Tokyo operation, strong in luxury and mid-market)

• Keller Williams Japan (international brand with local presence)

• REMAX Japan

• Various regional independent agencies in Osaka, Kyoto, Nagoya, and Fukuoka

Step 3: Property Search and Due Diligence

Japan's primary property listing portal is SUUMO (suumo.jp) for the general market, alongside AtHome and HOME'S. For English-language search, Housing Japan, Plaza Homes, and Japan Property Central maintain English-language listing databases, though these are a subset of the full market.

When evaluating properties, several Japan-specific factors require attention that foreign buyers often overlook:

Building age and earthquake resistance standards. Japan's Building Standards Law was comprehensively revised in 1981 (新耐震基準, shin-taishin kijun — new earthquake resistance standards) and again in 2000. A property built before 1981 may not meet modern earthquake resistance requirements, which affects both insurability and resale value. Properties built after the 2000 revision are considered fully compliant with modern standards. For older buildings, a structural inspection report (建物状況調査) is strongly advisable.

Leasehold land (借地権, shakuchiken). Some properties in Japan are sold with ownership of the building only — the land is leased, not owned. Leasehold properties are significantly cheaper to buy but carry ongoing ground rent obligations, and the land lease adds complexity to mortgaging, selling, and inheriting the property. Confirm clearly whether you are buying freehold land or leasehold land before proceeding.

Vacant house (空き家, akiya) status. Japan has a well-publicized oversupply of vacant rural and semi-rural properties — the so-called akiya crisis. Some of these are available at remarkably low prices, including through government akiya banks (空き家バンク). However, many are in remote locations with limited access to services, have significant deferred maintenance, or carry complex ownership histories. Renovation costs on akiya can be substantial, and mortgaging an akiya in poor condition can be difficult. Approach with eyes open.

Flood and disaster risk. Japanese municipalities publish hazard maps (ハザードマップ, hazādo mappu) showing flood risk zones, landslide risk areas, and tsunami inundation zones. Your real estate agent is legally required to disclose known hazard designations. Review the relevant hazard map for any property you are seriously considering — particularly for rural, riverside, or coastal properties.

Step 4: Make an Offer and Sign the Purchase Agreement

When you have identified a property, your agent will submit an offer (申込書, mōshikomisho) to the seller's agent. This is not legally binding at this stage, but it signals serious intent and typically takes the property off active marketing.

Once the seller accepts your offer and terms are agreed, the parties move to a formal Purchase and Sale Agreement (売買契約書, baibai keiyakusho). Before signing, a licensed real estate transaction specialist (宅地建物取引士) from the agency is required by law to present a formal Explanation of Important Matters (重要事項説明書, jūyō jikō setsumeisho) — a detailed document covering everything legally material about the property: title status, zoning, encumbrances, building violations, boundary disputes, flood risk disclosures, and dozens of other items.

Read this document carefully. If you cannot read Japanese, have a professional translation prepared or have a trusted bilingual person present during the explanation session. This is your legal protection — questions about anything unclear should be raised here, before you sign.

At contract signing:

• Pay a deposit of 5–10% of the purchase price (earnest money / 手付金, tetsukēkin). This is typically non-refundable if you withdraw without cause after signing.

• Pay the first half of the agent's commission

• Affix revenue stamps (印紙, inshi) to the contract — the stamp duty

Step 5: Apply for Your Mortgage

If you are financing the purchase, your mortgage application should ideally begin before or simultaneously with the property search, so that you already have a pre-approval or a conditional commitment from your lender. Once you have a signed purchase agreement, you submit it to your bank as part of the formal loan application.

The bank will conduct its own property valuation. Japanese banks lend against the assessed value of the property — particularly the land value — which can be lower than the purchase price. This means the bank's maximum loan amount may be less than what you agreed to pay, requiring you to cover the gap from your own funds.

Documents typically required for a mortgage application:

From you personally:

• Passport and residence card

• All tax returns and withholding tax statements (源泉徴収票, gensen chōshūhyō) for the past two to three years

• Certificate of taxable income (課税証明書) from your ward office

• Employment certificate from your employer (在職証明書)

• Bank statements for the past six to twelve months

• Proof of assets (savings, investments)

• Details of any existing loans or liabilities

For the property:

• Signed purchase agreement

• Property registry extract (登記事項証明書)

• Building confirmation certificate (建築確認済証) for newer properties

• Floor plans and site plan

Mortgage processing takes approximately two to four weeks for PR holders and four to eight weeks for non-PR foreign applicants, as of 2026.

Step 6: Engage a Judicial Scrivener (司法書士, Shihō Shoshi)

A judicial scrivener is a licensed legal professional who handles property registration in Japan. Unlike many other countries where a lawyer or notary manages conveyancing, Japan uses this specialized role. You do not have a choice about whether to use one — property ownership transfers cannot be registered without a judicial scrivener's involvement.

Your agent or bank will typically recommend one, or you can engage your own. Their role includes:

• Verifying the seller's identity and authority to sell

• Confirming the title is clean and free of encumbrances

• Preparing the ownership transfer registration documents

• Registering the mortgage lien for the bank

• Filing all documents with the Legal Affairs Bureau (法務局)

Judicial scrivener fees are not regulated at a national level but typically range from ¥80,000 to ¥250,000 for a standard residential purchase, rising with complexity (multiple titles, mortgage registration, older properties with incomplete records).

Step 7: Settlement and Key Handover

Settlement (残代金決済, zandaikin kessai) is the day everything happens at once. It is typically conducted at a bank branch or a meeting room at your real estate agency. All parties are present: you, the seller, both agents, the judicial scrivener, and a bank representative if applicable.

On settlement day:

• Your mortgage funds are transferred to your Japanese bank account by the lender

• You transfer the remaining purchase balance plus all outstanding fees and taxes to the seller and relevant parties

• The seller signs and hands over all transfer documents to the judicial scrivener

• The judicial scrivener immediately files the ownership transfer registration with the Legal Affairs Bureau

• The seller hands you the keys

From this moment, the property is legally yours. The ownership registration is processed typically within one to two weeks of filing, at which point you can obtain your updated title certificate.

Complete Cost Breakdown: What You Actually Pay to Buy a House in Japan

This is the section most foreign buyers wish they had read earlier. The purchase price is only the beginning. Budget 7–10% of the purchase price on top, more if you are a non-PR foreigner who needs additional professional services.

One-Time Purchase Costs

Stamp Duty (印紙税, Inshi-zei) Payable on the sales contract. Under the reduced rates currently in effect through March 31, 2027:

Both buyer and seller typically split the stamp duty, though terms can be negotiated.

Registration and License Tax (登録免許税, Tōroku Menkyozei) Payable when ownership is transferred and mortgage is registered. Calculated on the property's assessed value (固定資産税評価額), which is typically 50–70% of the market purchase price.

Current rates (with reductions in effect through March 2026 for land, March 2027 for buildings):

• Land transfer: 1.5% of assessed land value (standard rate 2.0%, reduced through March 31, 2026; reverts to 2.0% for purchases completing after this date)

• Building transfer (existing home): 2.0% of assessed building value (may be reduced to 0.3% for qualifying residential properties)

• New building ownership preservation: 0.4% (reduced to 0.15% if qualifying)

• Mortgage registration: 0.4% of loan amount (reduced to 0.1% for qualifying residential mortgages)

Real Estate Acquisition Tax (不動産取得税, Fudōsan Shutoku-zei) This tax arrives as an invoice 6 to 18 months after purchase — well after closing — and surprises many foreign buyers who have stopped thinking about property costs. Budget for it now.

Standard rate: 3% of assessed value for residential land and buildings (reduced from the standard 4%). Significant reductions and exemptions apply for new construction and qualifying used residential properties, potentially saving hundreds of thousands of yen. Claiming these reductions requires filing paperwork with your prefectural tax office within specific deadlines — your judicial scrivener or tax advisor can assist.

Agent Commission (仲介手数料, Chūkai Tesūryō) Maximum regulated rate: 3% of the sale price + ¥60,000 + consumption tax (10%). On a ¥50 million property: approximately ¥1.71 million. Paid in two installments: half at contract signing, half at settlement.

Judicial Scrivener Fees (司法書士費用) ¥80,000 – ¥250,000 for a standard residential purchase and mortgage registration.

Mortgage-Related Fees (if financing)

• Loan origination fee: typically ¥50,000 – ¥100,000 or up to 2% of the loan amount depending on the lender

• Guarantee fee: 0.5% – 2% of the loan amount, paid either upfront or built into the interest rate

• Fire and earthquake insurance: required by lenders; annual premium varies significantly by property type, age, location, and coverage level

• Group credit life insurance: typically bundled into the mortgage rate or charged separately; required by virtually all lenders

Translation and Interpretation (for non-Japanese speakers) ¥50,000 – ¥200,000 depending on the level of service required throughout the process.

Estimated Total Closing Costs

Ongoing Annual Costs After Purchase

Fixed Asset Tax (固定資産税, Kotei Shisanzei) Levied annually by your municipality based on assessed value. Rate: 1.4% of assessed value. For residential land, significant reductions apply — land of 200 m² or less is assessed at one-sixth of standard value for the first 200 m². A house with an assessed value of ¥20 million might pay ¥100,000–¥150,000 per year in fixed asset tax.

City Planning Tax (都市計画税, Toshi Keikaku-zei) Applies in urbanization promotion zones. Rate: up to 0.3% of assessed value. Typically billed together with fixed asset tax in four annual installments.

Building Insurance Earthquake insurance is strongly recommended in Japan and is required by most mortgage lenders. Annual premiums vary significantly by building age, structure, location, and coverage level.

Management Fee and Repair Reserve (for condominiums/マンション only) Condo owners in Japan pay a monthly management fee (管理費) covering building maintenance and administration, plus a repair reserve fund (修繕積立金) set aside for future major repairs. These typically total ¥15,000–¥50,000 per month depending on the building, and they increase over time as older buildings face larger repair costs. Always review the current balance and planned expenditure of the repair reserve before buying a condo — a reserve fund that is significantly underfunded is a red flag.

Capital Gains Tax When You Sell

Understanding capital gains tax is important even at the buying stage, as it affects your exit strategy.

Japan applies different capital gains tax rates depending on how long you hold the property:

The five-year threshold is calculated as of January 1 of the year of sale — not from the exact date of purchase. A property bought in November 2021 and sold in January 2027 qualifies for the long-term rate; the same property sold in December 2026 does not.

A primary residence exemption allows you to deduct ¥30 million from capital gains if the property was your primary home and you are no longer living there at the time of sale. This exemption significantly reduces or eliminates tax liability for most owner-occupiers selling a modestly valued home.

Non-residents selling Japanese property face a 10.21% withholding tax at the time of sale, credited against the final capital gains tax calculated when filing a Japanese tax return the following year.

Akiya: Japan's Vacant House Opportunity

No guide to buying property in Japan in 2026 is complete without addressing akiya — the country's growing stock of vacant, abandoned, and underpriced homes.

Japan has more than 9 million vacant properties as of the most recent housing census, concentrated in rural and semi-rural areas, small regional cities, and aging suburbs of major metropolitan areas. Many are available for extraordinarily low prices — some listed for under ¥1 million — through government-run akiya banks (空き家バンク) operated by municipal governments.

The genuine opportunity: For buyers willing to live in rural Japan, work remotely, or invest in a renovation project, akiya can deliver extraordinary value. Some municipalities actively subsidize renovation costs for akiya buyers who agree to live in and restore the properties.

The realistic challenges:

• Most akiya are in areas with declining populations, limited job markets, aging infrastructure, and few English-speaking services

• Renovation costs on seriously neglected properties can easily exceed the purchase price — ¥3–10 million for a livable renovation is common, and complex restorations can cost far more

• Mortgaging an akiya in poor structural condition is difficult; many lenders will not lend against a property that does not meet minimum habitability standards

• Title histories on old rural properties can be complicated by multiple generations of unclear inheritance, requiring legal work to clean up before transfer

• Properties in very rural areas may have limited market liquidity — reselling can be slow

If akiya interests you, begin with your target municipality's akiya bank portal and engage a local agent who has experience with these transactions. Budgeting for a structural inspection before making any offer is non-negotiable.

New vs. Used Property: Key Differences in Japan

New Construction (新築, Shinchiku)

New properties are sold by developers and construction companies and come with statutory warranties — under the Housing Quality Assurance Act, sellers of new homes must provide a minimum 10-year structural warranty covering major structural elements and weatherproofing.

Considerations for new builds:

• Generally priced at a premium to equivalent used properties

• Consumption tax (10%) applies to the building portion when buying from a developer (does not apply to used properties sold by individual owners)

• You may be buying based on floor plans before completion — delivery risk and specification changes are possible

• New properties built to post-2000 earthquake standards provide the highest level of structural safety

Used Property (中古, Chūko)

The used residential market in Japan is extensive and often offers significantly better value than new construction, particularly in established urban neighborhoods.

Considerations for used properties:

• No consumption tax when purchased from an individual seller (only from a business seller)

• Building age and earthquake resistance standard are critical factors

• An independent building inspection (ホームインスペクション) is strongly recommended — unlike many other countries, Japan's real estate market has historically had low inspection culture, but this is changing

• Some used properties come with residual warranties from original construction; others do not

Buying Property Without Living in Japan: The Non-Resident Route

If you want to buy Japanese property as a non-resident — as an investment, a vacation home, or ahead of a planned future move — the process is legally straightforward but practically more complex.

You will need to:

• Obtain a Japanese Individual Number (マイナンバー) or appoint a tax representative (税務代理人) in Japan who will receive tax notices and file any necessary returns on your behalf

• Open a Japanese bank account (harder for non-residents but possible at some branches of international banks operating in Japan, or through non-resident accounts at certain Japanese institutions)

• Arrange currency conversion and international wire transfer for the purchase funds

• Find a bilingual agent capable of managing the process remotely; at minimum two in-person visits are typically required — one for property inspection and one for contract signing and settlement (though some agencies have begun accommodating remote signings via power of attorney arrangements)

Financing is effectively unavailable for non-residents through standard Japanese residential mortgage products. Cash purchase or overseas financing against your existing assets is the realistic path.

Non-resident property owners pay the same annual fixed asset tax and city planning tax as resident owners. Bills are mailed to a Japanese address — your designated tax representative's address if you have no Japan address — and payment must be made from a Japanese bank account or by other means arranged in advance.

Common Mistakes Foreign Buyers Make — and How to Avoid Them

Underestimating closing costs. The 7–10% closing cost layer on top of the purchase price regularly surprises first-time buyers. If you are non-PR and using professional translation and interpretation services throughout, your costs can reach 10–13%. Budget before you start.

Applying to the wrong lender. Walking into a MUFG or Mizuho branch as a non-PR foreign resident and expecting a mortgage application to succeed is a common and frustrating experience. Target the lenders covered in this guide from the start — Prestia, Tokyo Star, Shinsei, Suruga — and engage a bilingual mortgage broker who knows which products fit your profile.

Ignoring the building age. Pre-1981 earthquake resistance standards matter enormously in a seismically active country. A structurally unsafe building is also an uninsurable and unmortgageable one. Check the building age, check the compliance history, and commission an inspection for any used property you are seriously considering.

Not stress-testing the variable rate. Variable rates in Japan are at historical lows relative to global norms, but the Bank of Japan has explicitly signaled continued normalization. A borrower who stretches their budget at 0.5% variable may struggle if rates rise to 1.5–2% over a decade. Run your budget numbers at multiple rate scenarios before committing.

Buying property assuming it grants residency. It does not. Japan's immigration system does not include an investor visa for residential property purchases (unlike some countries). Owning property in Japan gives you no immigration advantage and no right to remain. Your visa status must be managed completely separately.

Forgetting the real estate acquisition tax bill. This invoice arrives 6–18 months after purchase and catches many buyers off guard. Set aside 3% of your property's assessed value from the start so this bill does not create a cash flow problem.

Skipping the Important Matters Explanation. The jūyō jikō setsumeisho session before contract signing is your main legal protection as a buyer. Skipping or rushing through it — particularly without a reliable translation — means signing a binding contract without fully understanding what you have agreed to. Take the time to understand every disclosure.

Frequently Asked Questions

Does buying property in Japan give me residency rights? No. Property ownership has no connection to immigration status in Japan. You must maintain your visa through normal immigration channels regardless of what property you own.

Can I buy land in Japan as a foreigner? Yes. Japan permits full freehold ownership of land by foreign nationals without any restrictions. You can buy land and build on it under the same rules that apply to Japanese citizens.

Do I need a Japanese bank account to buy property? For resident buyers, yes — you will need one to receive mortgage funds, pay settlement, and manage ongoing property tax obligations. For non-resident cash buyers, arrangements can be made through a Japanese representative, but having a Japanese account simplifies the process significantly.

Can my spouse act as a guarantor or co-borrower to improve my mortgage application? Yes, and this is a commonly used strategy. If your spouse is a Japanese national or permanent resident, their credit profile and income can be used either as a co-borrower (both incomes combined for loan qualification) or as a guarantor. Some lenders will approve applications from non-PR foreigners that they would otherwise reject, when a Japanese national or PR-holding spouse is involved.

Is it true that Japanese buildings lose value while land holds value? Partly. Japan's residential building market has historically depreciated buildings to near-zero over 20–30 years under standard accounting conventions — this is a cultural and regulatory phenomenon rather than a pure reflection of market reality. Well-maintained properties in desirable urban locations have demonstrated market value well above accounting value. However, the general principle that land drives value in Japan, particularly in urban areas, is accurate. This is why lenders assess loan eligibility heavily against land value.

What happens to my property if I have to leave Japan unexpectedly? You retain ownership regardless. If you have a mortgage, you remain obligated to continue payments. Rental income can help service the loan while you are abroad. If you need to sell remotely, a power of attorney arrangement through a trusted person in Japan or a professional management company is typically required.

Can I buy property jointly with a non-resident partner? Yes. Joint ownership by two or more individuals — regardless of residency status — is permitted. Both owners are registered on the title with their respective share. Each owner's tax obligations are assessed separately according to their share.

Quick Reference Summary

Buying a home in Japan as a foreigner is entirely achievable — and for those with long-term plans here, it often makes compelling financial sense compared to Japan's rental market, where tenant protections are somewhat weaker than buyers assume and rents in major cities have been rising. The process is more paper-intensive and longer than in many other countries, and the mortgage market is genuinely more restrictive for non-PR foreign residents. But the legal framework is fair, the property rights are solid, and the market — particularly with the yen's current position — offers real value for well-informed buyers who go in with clear eyes and the right professional support around them.