After you’ve lived in Japan for a long time, you will eventually start thinking about looking to buy a house or apartment. After all, it gives you something with value and allows you to finally make those renovations that you wanted.
While jumping into purchasing may seem spontaneous and, dare I say, romantic, there are a number of things that people new to the market should be aware of.
No Residency Permit No Residence
Photo: PIXTA/R-DESIGNLoans that are unfortunately only available to permanent residents or naturalized immigrants.
The first problem foreign property buyers will encounter is the residency status problem. In theory, even people on holiday visas can purchase property with the right paperwork, but the reality is that unless you are very well-off financially, you will have to take out a loan. Loans that are unfortunately only available to permanent residents or naturalized immigrants.
Another option if you are married or living with a partner, is to let your significant other take on the full loan. Although asking your beau to take on the burden may not seem like a bad choice, it has a few drawbacks for tax purposes.
When the tax collector comes calling, the person on the loan can claim a special tax reimbursement called a jutaku ron kojo (住（じゅ）宅（たく）控（こう）除（じょ）), or mortgage deduction, which will help to ease the pain of koteishisanzei (固（こ）定（てい）資（し）産（さん）税（ぜい）), Japanese property taxes.
Maintenance Costs
Photo: iStock/ marokeBe wary of maintenance costs, especially for older buildings.
One of the strange things about purchasing property in Japan is that Japanese people seem terrified of buying older places, even when they are being given away for free. As a Brit, I always wondered why this was, after all, many of the more desirable houses in the UK are the older ones. One of the reasons is maintenance costs, called ijihi (維（い）持（じ）費（ひ）), which increase whenever the apartment is old enough that a full reform is needed.
Similarly, when looking for apartments online, you will notice that many apartments on offer are 13–17 years old. While Japan does have a lot of superstitions about numbers, there is no significance to these numbers, instead, the reason for this period being so common is financial.
When purchasing a new apartment, a fee is commonly paid 15 to 18 years after the apartment is built called daikiboshuzenkoji (大（だい）規（き）模（ぼ）修（しゅう）繕（ぜん）工（こう）事（じ）), or large-scale repair work. This fee can be surprisingly high as it covers all the general wear and tear to the building.
Square Footage Rules
Photo: iStock/ kokouuBuying a bigger apartment than the neighbors means you effectively pay double the fees of everyone else in the building.
At the time I was looking at apartments to buy, I was insistent on one area we were shown that consisted of stairs going up with four small apartments on each floor. My plan was to purchase two neighboring smaller apartments and convert them into one big place for a steal. I’d then have my own half a floor. What could go wrong?
This is a trap that many people fall into when they see large apartments going for a steal on real estate platforms. In Japan, apartment fees, such as caretaker fees, aren’t decided per apartment, but rather by the size of the apartment.
Therefore, buying two apartments and converting or buying a bigger apartment than the neighbors means you effectively pay double the fees of everyone else in the building.
Real Estate Agents: Helpful and Expensive
Photo: iStock/SetsukoNWatch out for high brokerage fees.
A useful tip is if you are happy with the apartment you’re living in, you may want to buy it from the owner. You’d be surprised how many owners will consider it simply to avoid paying to renovate and clean the apartment, which can be quite expensive.
At first, when I reached out to the owner of my apartment about potentially buying it, he was lukewarm, presumably because he considered that the location was convenient enough that he could do minimal renovation and find renters again. It was the real estate agent we were seeing other apartments with who told us he could change the owner’s mind.
A few months later, he knocked on our door to show us a letter that the owner had sent, showing his willingness to part with the property. The price was ridiculously high, but obviously meant for a counteroffer, so we set about the negotiations before settling on a price that both of us were satisfied with.
While the real estate agent was helpful with a lot of things, he was not being helpful from the kindness of his heart. Because he’d entered into the negotiations in a professional capacity, he could claim a chukai tesuryo (仲（ちゅ）介（かい）手（て）数（すう）料（りょう）), or brokerage fee, of 3–5%, which in this case was hundreds of thousands of yen (Japanese currency).
The Ins and Outs of Contracts
Photo: iStock/takasuuRead the fine print before signing on the dotted line.
Of course, this wasn’t entirely wasted money, for as well as being a finder, the real estate agent had a lot of connections to lawyers for drafting contracts—making sure that everyone was happy with the arrangement. He even came down on our side in a dispute when the landlord lost his copy of the master key, which was included in the contract.
Ideally, you would cut out the middleman and do the haggling and contract drawing yourself with the help of a lawyer. The problem is that it can be a tricky process, and it is easy to overlook things. Of course, lawyers will want to get paid too. If you do take this route, some of the things that you’ll want to include are payment terms, property conditions, and, of course, not only the key but also the mold that the key was made from.
Overall, despite all these challenges, I am happy with my purchase and enjoy doing things you can’t normally do as a renter—like putting holes in the wall to hang my pictures and purging my apartment of tatami (Japanese-style flooring). However, when I add up all the unexpected costs it came out to almost 10% or so of the value of the property, something which I hadn’t budgeted for.
How about you? Are you ready to take the plunge into house ownership or happy to stay a renter for the time being? Wherever you are on the journey from renter to owner, GaijinPot has an affordable place for you.
