1. I want to purchase a property in Japan. What sort of documents should I prepare?
- A copy of your HKID card.
- A copy of your passport.
- A declaration of your home address (you can obtain it for free at Home Affairs Department of every district).
- An inkan (official ink seal that serves as your signature)
2. I don’t speak Japanese. Will it cause any problem during the transaction?
Don’t worry, we will provide translation services during the transaction.
3. Is there any restriction towards foreigners purchasing real estate in Japan?
Currently there is no particular restriction towards foreigners. The restriction has been cancelled since April, 1988.
4. Can I apply for a mortgage?
Yes. Most Japanese banks do not accept mortgage application from foreigners without the right of abode in Japan. Yet clients from Hong Kong can apply mortgage from the Tokyo branch of Bank of China, or ORIX Asia Limited by providing proof of asset and income. Half of the price of the property can be mortgaged. You must be present during the opening of the account and application. Minimum amount of the mortgage is 35 million yen.
5. Can I go check out the property myself?
We will arrange local staff to show you the property shall you decide to fly to Japan for house scouting. For clients who are unable to travel Japan, we will request local staff to take pictures/ videos of the interiors (unless the property is already occupied).
6. Is there only Japanese on the contract? What do I do if I am not able to understand Japanese?
Yes, there is only Japanese text on the contract. As the cost of hiring a lawyer to translate the contact into English is high, we usually only do so when a listed company purchase a whole block of property. But before signing the contract, our staff will translate the contact to you and will mark down important items to be noticed.
7. What if the tenant falls behind with rent payment?
Japanese people are generally honest and rent arrears rarely take place. There are ‘guarantee companies’ in Japan and they will pay for the arrear rent shall it happens. Such institution is commonly used across Japan. The tenant will also name a warrantor and landlord can go to the warrantor shall the tenant falls behind the rent.
8. Can I purchase property outside Tokyo?
Yes. We can search for property across Japan that suits your investment needs.
9. Can I purchase a property under the name of my company?
Yes, but the taxation is different from purchasing as an individual. Please consult with us.
10. Can I purchase the property with my spouse or family members?
Sure you can. The only thing you need to do is to provide their address declaration and copy of their passport/ID. But when filling the annual tax returns, everyone needs to fill in theirs separately.
11. Can I open a bank account in Japan for rent collection?
Generally banks in Japan will not open account for foreigners without the right of abode. But JPCC provides a one-stop rental management service to clients, and the fee is only 5% of the total rent. Please learn more at the Rent Management section.
12. I don’t live in Japan. How can I collect rent from the tenant and deal with related issues?
JPCC provides a one-stop rental management service to clients. We can help overseas clients find suitable Japanese tenants, collect rent monthly and transmit rental collection to you regularly. We also help overseas client to arrange move in and move out process for tenants. Shall the tenant needs anything, we will inform you and help settle in due course. The fee is merely 5% of the rental income. Overseas clients can just stay home, and enjoy the returns from real estate investment in Japan.
13. How is the property size measured in Japan?
Different from Hong Kong, the exclusive area or the construction area doesn’t include the corridor and common area. Exclusive area measures from the center-line of the outer walls, and construction area measures from the inside of the outer walls for registration purposes. Therefore there is a slight difference between the two, but it is usually less than 10%. The size of the balcony is measured separately.
14. Types of property in Japan and factors of consideration?
Mainly there are mansion (マンション) and apartment (アパート).
Mansion is made from a steel frame and reinforced concrete, and is refractory. It is usually multi-story and is sound resistant and feels classier. As the construction cost is higher, the rent is higher than apartment as well. It also gets elevator and management staff, so the management fee is also higher.
Apartment is of wooden structure with light steel frame and is quasi-refractory. They are usually two-story and not high class residency. Because of the relatively low construction cost, the rent is usually lower. The management fee is also lower due to the lack of elevator and management staff. But in recent years, there are a rise of superior and sound-resistant apartment built. Therefore it is recommended to check out the property on site for consideration, instead of just looking at which type of property it is. We will also provide detailed information regarding the property for your consideration.
15. On property ads, we often see terms like “RC/ SRC”. What does that mean?
RC (Reinforce Concrete Construction) is a composite material in which concrete's relatively low tensile strength and ductility are counteracted by the inclusion of reinforcement having higher tensile strength and/or ductility. RC is used for building below 15-story and the average cost is lower than SC and SRC.
SRC (Steel Reinforce Concrete Construction) uses steel as the main structural material, and supplemented by reinforced concrete. Due to the toughness and flexibility of the materials it is often advertised as earthquake proof and safe. It is mainly used for high building (about 12 to 25 floors), and the construction cost is higher than the RC.
Yet there is no need to over-worry the safety of Japanese property. All buildings constructed after 1982 meet the requirement of earthquake resistance standard. You can also purchase earthquake insurance after the transaction.
16. Do I have to pay the management fee and building maintenance fee every month?
Yes. The management fee covers the cost of managing and maintaining the public area, which also including regular inspection of the property and facility, the cost of the management staff, cleaning, water and electricity fee for public area, insurance, and commission for property management company. The building maintenance fee is for the long term maintenance of the property for safety and value sake. The fund is to avoid a sudden overhead expenditure. Therefore owner of each household contribute to this fund monthly. Basically purchase of all single units will have to pay this fee, but there is no such enforcement when you purchase a whole building.