PURCHASING
PROPERTY
Property prices in Japan
Japan currently has a large number of vacant homes, particularly in rural and mountainous areas. This is due to an aging population, declining birthrate, and ongoing migration toward major cities and the fact that in japan. These factors along with heavy taxation aimed at stopping house flipping and speculative investment is the main reason property prices remain low in Japan.
Houses in Japan are depreciating assets and one must understand that for the most part, money spend on property in Japan is simply money down the drain. As a result, buyers can sometimes find properties at very attractive prices compared with many western markets.
While this is the case for much of Japan, popular ski destinations like Hakuba, Niseko and now Myoko are proving to be exceptions to the rule. These regions have experienced tremendous development and price appreciation over the last 20 years going from sleepy rural ski towns to thriving international luxury ski destinations in just a short period of time.
Myoko is next in line, poised be receiving a massive 1.3 billion dollar investment aimed at turning it into the Whistler of Japan. This goes without saying that window of opportunity to buy affordable property in neighboring regions such as Nojiri, is quickly closing.
Costs beyond purchase
While some properties appear very inexpensive on the surface, there is usually a good reason for this. A large number of cheap homes in Japan will have been empty for a number of years and may require significant repairs, renovations, or upgrades to make them comfortable for winter use.
Sometimes increasing your budget modestly can make a substantial difference — potentially turning a high-maintenance project into a comfortable, move-in-ready home.
Regardless of the state of the property, buyers should still plan for additional renovation costs and factor in the cost of ongoing maintenance, utilities, taxes and possible unforeseen expenses before deciding whether a property is right for you.
It is important to set a realistic budget beyond the sale price and to understand the level of work you are prepared to take on.
Careful planning, realistic budgeting, and local guidance are key to making a successful property investment in Japan.
Snow Country
When purchasing a property in snow country, the most important factor is having good access and space that allows you to easily keep on top of snow clearing in winter. Properties out here can quickly become overwhelmed in snow. To the point where access becomes totally impossible serious structural damage to the building can occur.
Winters are harsh and winterizing old houses,insulating and heating pipes, boarding up windows and putting up lean-tos around the house may be necessary to stop snow breaking first and even second story windows.
Removing snow piles that have built up against the house and in some cases climbing onto the roof may be necessary to remove snow after heavy storms. Snow clearing can be very labour intensive, especially in areas where a snow blower cannot reach! Having someone local to handle snow clearing and maintenance while your are away is a must if you own property in snow country.
Frequently Asked Questions
Can I get a loan in Japan?
No. If you are not a permanent resident or Japanese National, you can not get any form of financial loan before buying a property in Japan. You must have funds available back home before even considering buying a property in Japan.
What taxes and other expenses are there when buying?
Apart from utilities such as water, gas and electricity, there is a yearly Property Tax in Japan.This is usually priced at 1.4% of the property's assessed value. But generally the assessed amount is around half of the purchase price. This is just a general rule of thumb but it can vary.
There may also be yearly Management Fee (Union Fee) should you purchase property in a resort area like Nojiriko Greentown. This is usually to cover resort area maintenance, snow plowing and preferential access to certain contractors and services for members.
There is also a one time Real Estate Tax that is paid to your local government after purchase. This usually comes a few months after purchase and is about 4% of purchase price. This is just a one time fee however.
The Real Estate brokerage fee for property is usually around 5% on top of purchase price or around 330,000 yen for property under 40k. The exact fee varies by agent. This fee is separate from our consulting fee.
The Legal Scrivenger Fee can vary but this is around 160,000 yen on top of purchase price.
There may be other potential expenses not outlined above but this will again depend on the property. Please keep this in mind when you are working out your budget.
How long does the process usually take?
Generally once you have found a property you like and your offer gets accepted, it usually takes about 3-4 weeks for the the contract to be drawn up. From this point on wards it is simply a matter of signing and making payment. The keys can then be handed over to you pretty much straight away.
To get the ball rolling today