One of the most frequently asked questions from our non-Japanese clients is, “Can I get a housing loan at Japanese bank to purchase a Japanese property?”.

Mandatory condition to arrange a loan

The criteria of arranging a bank loan for non-Japanese differs to each bank, but here are some necessary conditions in all Japanese banks.

Mandatory condition 1: Need to have a Japanese address

If you lend your money to somebody, one of the biggest concerns/risks is that this person will escape without paying you, and you cannot contact this person anymore. It is same for banks, they will not arrange a loan to whom do not have a registered address in Japan.

Mandatory condition 2: Need to have a Job and income in Japan

If you lend your money to somebody, one of the biggest concerns/risks should be that this person does not work and does not have a capacity to return you the money. It is same for banks, they will not arrange a loan who do not have a stable job in Japan having certain amount of secured income.

Advantage condition to arrange a loan

The above conditions are mandatory to arrange a housing loan in Japan, and here are some advantage conditions if a lender is arranging a housing loan in Japan.

Advantage condition 1: Having PR (Permanent Residence)

If a non-Japanese is PR holder, banks think that you are considering staying in Japan for a long period, and most banks will treat you at totally same conditions with local Japanese. But some Japanese banks requires to have a certain level of Japanese communication skill to avoid a misunderstanding of the clauses when signing a loan contract with the bank.

Advantage condition 2: Spoused with a Japanese

If a wife or husband of non-Japanese is a Japanese, banks also think that you are considering to stay in Japan for a long period, and most banks will consider this point positively.

General condition to arrange a loan

If the mandatory conditions are covered (having a Japanese address and work in Japan), but without covering the advantage conditions (not PR holder and not having a Japanese wife), generally the following conditions are required from banks.

Standard condition 1: Cash payment for certain amount

In many cases, approx. 30% of the property price are required to pay by cash (payment will be 70% loan + 30% cash). Also the other costs such as tax and property registration are required to be paid by cash.

Standard condition 2: Certain length and salary amount of service in a same company in Japan

This depends on each bank, but generally 1 to 3 years period of work at a same company is required.

Example of necessary documents:

-Proof of income (certificate of income and withholding tax, salary slip for recent 3 months etc.）

-ID (Insurance card issued from company, Residence card, Driver’s license etc.)

-Personal stamp or signature

– Seal registration certificate

-Certificate of employment

-Certificate of residence

-Repayment schedule (if any, such as car loan)

Above is just a general trend if a non-Japanese applied a housing loan at Japanese banks.

If you have any questions, or want to know more details, please contact to the following e-mail address.

【REDS】Real Estate Distribution System (REDS) Japan

Hiroki Kano (Mr.)

mailto: hi.kano@red-sys.jp

In Japan, it is widely said that the other costs will be 6-8% of the property price when purchasing a property.

We would like to see if this is truth or not, comparing with a simulation of the cost estimation.
The following is the example of the cost estimation that we similarly provides to our clients.

Property: Condo in prime area
Property price: 160,000,000 yen

Brokerage fee for this property
‐ At typical agents : 5,346,000 yen (3% of price + 60,000 yen + tax)
‐ At REDS : 2,673,000 yen
‐ You will save 2,673,000 yen at REDS 【50% discount】

Cost estimation (in case of loan)
・Brokerage fee (above) ・・                       2,673,000 yen（To REDS）
・Fixed asset tax ・・・                 approx. 　 90,000 yen（from Oct1 to Dec31)
・Repair reserve fund ・・・        approx. 　 30,660 yen（from Oct1 to Nov30）
・Common area management fee approx. 　 21,650 yen（from Oct1 to Nov30）
・Stamp duty・・・・・・ 　                          60,000 yen（To government）
・Housing loan handling fee         approx.  3,520,000 yen（To bank, 2.2% of 160 mil loan)
・Bank administrative fee             approx.        55,000 yen（To bank)
・Stamp duty for housing loan                        60,000 yen（To government)
・Property Registration                 approx.   650,000 yen（To Lawyer / Judicial Scrivener）
・Fire insurance・・・・             approx.   350,000 yen（To insurance company, depends on the option you will choose）

Total cost estimation: approx. 7,510,310 yen  (at 50% discounted brokerage fee)

 *Please understand that this is a simulation and may differ according to actual conditions.

 *After few months from the property ownership registration, there will be a payment for “Real Estate Acquisition Tax” to government which is not included to this estimation.

If there is no discount for brokerage fee, then the total cost will be 7,510,310 yen + 2,673,000 yen = 10,183,310 yen, which is approx. 6.4% of the property price if you purchased this property from other typical agents.

For this property, we REDS can make 50% discount for brokerage fee, therefore the total of other costs is 7,510,310 yen, which is approx. 4.7% of the property price if you purchased from REDS.

There are properties that we REDS can offer 100% discount for brokerage fee, which depends on the type of the property. If this property was so, the total cost will be 7,510,310 yen – 2,673,000 yen = 4,837,310 yen, which is approx. 3% of the property price if you purchased at REDS.

As a result, the rate of other costs for this property can be said as,
At REDS (50-100% discount) : 3 – 4.7%
At typical agents (no discount) : 6.5%

Since the property price is very high, t is obvious that you will save a big cost when you chose REDS.

For your reference, here are the characteristics of each cost.

・Brokerage fee
Brokerage fee is the biggest occupancy of the total costs, so it is important to choose reliable agent but saving the brokerage fee as much as possible. All other costs are mostly same wherever agent you choose.

・Fixed asset tax
This is going to pay to the seller, since the seller had already paid the annual amount. So the date when you become the owner until the end of the year (December 31) will be calculated and paid to the seller.

・Repair reserve fund
Normally, the seller already paid 2 months ahead beforehand. So this amount will be also calculated and paid to the seller from the date you become the owner.

・Common area management fee
Normally, the seller already paid 2 months ahead beforehand. So this amount will be also calculated and paid to the seller from the date you become the owner.

・Stamp duty
The stamp should be purchased and attached to the original of the sales contract, which amount depends on the property price.

・Housing loan handling fee
This is only needed when you purchased using a housing loan. The cost depends on which bank and plan to choose, but 2.2% of the property price is one of the standards. There is an option that this amount can be lower but the interest will be higher.

・Bank administrative fee
This also depends on the bank, this fee will not be charged at some banks.

・Stamp duty for housing loan
The stamp should be purchased and attached to the original of the loan contract.

・Property Registration
This is to register your ownership, including tax and the fee to the layer who register the ownership.

・Fire insurance
It depends on the option you will choose. Generally 5 years fire insurance and add earthquake insurance as an option.

If you have any questions or want to know more details, please contact to the following e-mail address.

【REDS】Real Estate Distribution System (REDS) Japan

Hiroki Kano (Mr.)

mailto: hi.kano@red-sys.jp

When purchasing a mansion (condominium or apartment) in Japan, the repair fund, also known as a reserve fund or maintenance fund, is a critical aspect to consider. The repair fund is a pool of money set aside by the condominium management association or building management company to cover future repairs, renovations, and maintenance of the shared areas and facilities within the complex.

You may feel lucky if the monthly payment of repair fund is cheap when you are purchasing a mansion, but if it is lower than as it should be, there will be a big future risk.

Here are some reasons why the repair fund is important:

-Shared Facility Maintenance: In a mansion, various amenities and facilities, such as elevators, common areas, roofs, and building exteriors, are shared by all the unit owners. The repair fund ensures that there are sufficient funds to maintain and repair these shared facilities over time.

-Long-Term Planning: The repair fund allows for effective long-term planning for major repairs or replacements that are not covered by regular maintenance fees. It helps prevent sudden financial burdens on individual owners when major repairs are needed.

-Preserving Property Value: Proper maintenance is essential for maintaining the overall value of the property. A well-maintained building and common areas are more attractive to potential buyers or renters, and this can positively impact the property’s resale or rental value.

-Legal Requirement: In Japan, there are legal requirements for condominium management associations to establish and maintain a repair fund. The amount of contributions to the fund is typically determined based on the size and type of the building, as well as the estimated costs of future repairs.

-Emergency Repairs: Unexpected emergencies, such as damage caused by natural disasters or accidents, may require immediate repairs. Having a repair fund ensures that there are funds available to address such urgent situations promptly.

-Avoiding Special Assessments: Without a sufficient repair fund, the management association might need to levy special assessments on unit owners to cover major repair costs. These special assessments can be financially burdensome and may cause disputes among residents.

-Peace of Mind: Knowing that there is a well-funded repair reserve gives residents peace of mind that the building will be properly maintained and that their investment is protected.

If we talk about the legal lifetime of mansion, it is 47 years for standard RC and SRC made building according to the Japanese building standard law. But it is said that the building can be practically used for more than 100 years if the repairs, renovations, and maintenance of the building are done property.

The concept of modern apartments or mansions in Japan began to gain popularity after World War II due to the increased urbanization and housing demands. The first apartment buildings that resembled what is now referred to as “mansions” were built around the 1950s.

As for the average building age of mansions in Japan, it can vary significantly depending on the specific area and the building’s maintenance and renovation history. Many older mansions still exist and are in use, while others have been torn down or rebuilt. However, currently the mansions in Japan could be around 30 to 40 years old on average. So it can be imagined that after 20 – 30 years, there will be many mansions which ages are 50-60 years.

If we think to reconstruct a mansion in Japan, it needs to be complied with certain conditions and obtain approvals from the building association and relevant authorities. Basically, 4/5 association members should agree on the reconstruction, otherwise the reconstruction cannot be done. Even if it was agreed from the association members, specific requirements may vary depending on the location and local regulations.

Here are some common conditions that are generally required for reconstruction:

-Architectural Plans: You will need to hire a licensed architect to create detailed architectural plans for the reconstruction. These plans should comply with local building codes and zoning regulations.

-Building Permits: You must obtain building permits from the local government or municipality. The permit application process may involve submitting the architectural plans, construction details, and other relevant documentation for approval.

-Compliance with Building Codes: Ensure that the reconstruction adheres to the building codes and standards set by the government. This includes regulations related to safety, fire prevention, structural integrity, and energy efficiency.

-Environmental Regulations: You might need to adhere to environmental regulations, especially if the mansion is located in environmentally sensitive areas like coastal regions or near forests.

-Historical Preservation: If the mansion has historical significance or is located in a designated historical area, you may have to comply with additional preservation guidelines.

-Height and Boundary Regulations: Check the height restrictions and boundary regulations in the area to ensure the reconstruction does not violate any limits.

-Waste Disposal: Have a plan for waste disposal during the reconstruction process and after completion.

-Community Consultation: In some cases, you may need to consult with the local community or obtain their consent for the reconstruction, especially if the project might affect the neighborhood significantly.

-Financial and Legal Obligations: Be prepared to fulfill any financial and legal obligations related to the reconstruction, such as taxes, insurance, and contractual agreements.

Considered these hurdles of reconstructing mansion in Japan, it is not easy to rebuild a mansion although the building age exceeded the legal lifetime year.

To keep the practical lifetime of mansion longer as much as possible, repairs, renovations, and maintenance are mandatory.

In conclusion, when purchasing a mansion in Japan, it’s essential to review the condominium documents and financial statements to understand the status of the repair fund. Assessing the adequacy of the repair fund can help you make an informed decision about the overall financial health of the building and potential future expenses.

Please consult with REDS to ensure that you are well-informed about all aspects of the property’s maintenance and financial obligations before making your purchase.

If you are thinking to invest to real estate market, you may think which county the best choice for you.
If the Japanese real estate market can be one of your choices, I would like to explain you the advantages and disadvantages of investing to Japanese real estate market from my personal point of view.

There are 2 main advantages to invest to Japanese real estate market.

Advantage 1. There is no governmental restriction or extra taxes because of non-Japanese.

Japanese government do not set any restriction to foreigners owning real estate in Japan.
Some countries set extra tax or limit some real estate deal for foreigners, there is no extra tax or costs for foreigners, everyone can buy Japanese real estate at the same condition as local Japanese.

For example, some countries that have restrictions on foreign ownership of property include Australia, Britain, Hong Kong, Singapore and Switzerland.

In Australia, foreigners can buy property in Australia but typically you need to be a permanent resident or citizen. The property needs to be categorized as an investment and you need to get government approval. For non-residents or temporary visa holders, it’s legally necessary to buy non-residential property in Australia after getting permission from the Foreign Investment Review Board (FIRB). You will also need to provide copies of your personal identification documents (passport), proof you qualify to buy a property under FIRB rules, proof of legal residence in Australia, and documents to prove you’re creditworthy (usually a credit check, bank statements, proof of your wages, tax returns for the last three years or a letter from your employer).

In Singapore, foreigners can buy property in Singapore but there are certain restrictions. For example, foreigners are not allowed to buy landed properties without approval from the Singapore Land Authority. Additionally, foreigners are subject to additional buyer’s stamp duty (ABSD) when purchasing residential property in Singapore.

In Hong kong, foreigners can buy property in Hong Kong but there are certain restrictions. For example, foreigners are subject to additional stamp duty when purchasing residential property in Hong Kong.

As for other countries such as like Croatia, Turkey and South Korea, land ownership is open only to certain nationalities because of reciprocity agreements.

Advantage 2.Weak Japanese Yen

According to the historical chart of the daily U.S. Dollar – Japanese Yen (USDJPY) exchange rate, as of June 2023, the exchange rate is around 140 JPY per USD. In June 2018, it was around 110 JPY per USD as well. In June 2016, it was around 106 JPY per USD. It means that, to purchase a property which costs 100mil Japanese Yen, you needed to prepare 943,400 USD in June 2016, but you need to prepare only 713,400 USD in June 2023 to purchase the price property in Japanese Yen. It is not exaggerated to say, now is around 25% bargain sale of Japanese real estate compared with that period.

There is also a disadvantage for Japanese real estate market compared with other market from my personal point of view.

I feel that there are language and culture barriers, so it is not easy for non-Japanese to control everything by themselves. The deals are following Japanese real estate law, all original documents are written in Japanese, and there are Japanese business habits.
So I believe the most important point to make the successful deal is, to find a reliable Japanese agent who can work on behalf of you.

We REDS support Japanese local customers mainly, we have experienced agents only who deal daily in Tokyo, and we provide totally same services with totally same fees to foreigners.

Now is the good timing to invest to Japanese market, Japanese government removed immigration restriction from May this year, so now everyone can come to Japan to check properties.

We REDS are pleased to assist you searching a property based on your requirements, arranging a property tour, and negotiating prices with the sellers on behalf of you in Tokyo.

One of the most frequently asked questions from our customers is, will the brokerage fee be discounted or free.

Our company’s discount criteria is very open and clean as below.

– If the property price is higher than 50 mil yen, the brokerage fee will be discounted 50% at least in any cases.

– If the property price is lower than 50 mil yen, the brokerage fee will be discounted based on that property price as below at least.

For example,

property price 40 mil yen -> 40.4 % discounted brokerage fee compared with typical real estate companies

property price 30 mil yen -> 31.3 % discounted brokerage fee compared with typical real estate companies

property price 20 mil yen -> 22.7 % discounted brokerage fee compared with typical real estate companies

property price 10 mil yen -> 16.6 % discounted brokerage fee compared with typical real estate companies

– If the seller is a real estate company, then the brokerage fee will be FREE in the most cases.

For further details, please contact to the following e-mail address.

【REDS】Real Estate Distribution System (REDS) Japan

Hiroki Kano (Mr.)

mailto: hi.kano@red-sys.jp

There was an official announcement that ” Shojiki Fudosan (Honest Real Estate) Special ” will be broadcast in the winter of 2023.

In the previous drama of NHK ” Shojiki Fudosan (Honest Real Estate)”, our CEO Fukaya of REDS was involved in real estate supervision.

As you may know, there is a comic ” Shojiki Fudosan (Honest Real Estate)”, the story of the agent who was telling a lie to customers but one day he suddenly become unable to tell any lie and become honest.

I cannot wait until the winter of 2023!

?ついに発表！?

嘘がつけないあの男が
　　帰ってくる！

【#正直不動産スペシャル】
2023年度 冬放送予定

?続編制作記念?
待てないあなたに・・・
シーズン１をギュギュっと
濃縮してお届け！#正直不動産 #山下智久 #福原遥https://t.co/Qadr3lWUDL pic.twitter.com/Y8wD3PtbHV

— ＮＨＫドラマ (@nhk_dramas) February 28, 2023

We are happy to inform that one of our valued customers in US is going to make a Purchase Agreement of a premium residence in Minato-ku.

The customer visited Japan from US for a business purpose and could visit this property during their very busy schedule. It is very difficult to find a specious comfortable residence in this popular area, but it was fortune that an ideal property become avilable during the short stay in Japan.

We REDS will support all process in English by licensed local agent, from the beginning until the ownership has been transferred and further beyond.

If you are willing to purchase a valued condominium in greater Tokyo area with a discounted brokerage fee, having a full support from REDS in English language, please contact to the following e-mail address.

【REDS】Real Estate Distribution System (REDS) Japan

Hiroki Kano (Mr.)

mailto: hi.kano@red-sys.jp

Thank you very much for your strong patronage to REDS in year 2022.
We wish you a happy and prosperous new year to you and your family in 2023.

We are happy to inform that one of our non-Japanese valued customers had successfully executed the Purchase Agreement of a beautiful condominium in Kawasaki city.

Our customer had a difficult time because of getting COVID just before the planned contract date, and there was no choice but to postpone the contract date. But our customer recovered and could successfully signed the contract at the last minute of the year 2022.

We REDS will support all process in English with such unexpected cases from our experiences, until the ownership has been transferred, and further beyond.

If you are willing to purchase a valued condominium in greater Tokyo area with a discounted brokerage fee, having a full support from REDS in English language, please contact to the following e-mail address.

【REDS】Real Estate Distribution System (REDS) Japan

Hiroki Kano (Mr.)

mailto: hi.kano@red-sys.jp

We are happy to inform that one of our non-Japanese valued customers living in US had successfully executed the Purchase Agreement of a premium condominium in Minato-ku.

This property is under the work of fully renovation, and it will be completed in December.

There was a concern of the buyer who will make the payment from US, but we work with a Judicial Scrivener who supply a escrow service which is the safest way to deal from oustide Japan.

We REDS will support all process in English until the ownership have been transferred, and further beyond.

Moreover, REDS’ brokerage fee was discounted 100% (FREE!) for this property.

If you are willing to purchase a valued condominium in Tokyo with a discounted brokerage fee, having a full support from REDS in English language, please contact to the following e-mail address.

【REDS】Real Estate Distribution System (REDS) Japan

Hiroki Kano (Mr.)

mailto: hi.kano@red-sys.jp