Unlike many countries in Asia and Hawaii, Japanese real estate can be purchased by people from any country.
There is no such thing as not being able to own land, even foreigners can purchase real estate in the same way as Japanese.
So, how do you buy real estate in Japan?
1) Select a property
2) Apply to the seller for purchase
3) Seller and buyer sign a sales contract.
4) Settle the transaction according to the described in the sales contract.
5) Request a judicial scrivener to register the property.
6) If you pay property taxes or have income, you must file an income tax return and pay income taxes etc,.
These are the processes from selecting a property to owning it.
For above 3) to 5), a seal is generally used in Japan.
In particular for 5), we need a seal registered with the government office which is called “jitsuin”. If you are in a country that does not have a seal, you can use your signature as a substitute.
Transfer of rent income or settlement can be done by overseas remittance but confirmation is required as the fees are different for each.
Many of our clients set up a corporation in Japan to avoid having to pay a fee every time they remit rent and manage it in the corporation’s account.
In addition, there are many cases where the purchase agreement from 3) is done by an agent.In this case, the buyer can purchase Japanese real estate without coming to Japan but it is important to select the right agent.
We introduce affiliated law firm.The lawyer acts as the agent and handles everything from setting up the corporation to introducing tax accountants and accountants. Many people find it difficult to purchase real estate without such support.
Cost related to purchasing real estate in Japan
1) Stamp cost: Stamp duty to be affixed to contracts and receipts
Less than 100 million yen is 30,000 yen
2) Brokerage fee: Property price x 3% + 60,000 yen + tax
3) Remittance fee: Depends on financial institution
4) Registration of property fee: Registration and license tax + request cost of judicial
scrivener
5) Real estate acquisition tax: Required when acquiring real estate (not required for residential real estate)
6) Property tax: Annual tax for owning the property
7) Income tax, etc.: Taxes to be paid when there is rent income.
If you own real estate in Japan and generate rental income, you are obligated to pay taxes in Japan and must file a tax return.
- For individual
In the case that a person living in Korea buys a condominium in Tokyo and receives 1,000,000 yen of rent income every month.
The landlord (who lives in Korea) will receive 795,800 yen from the tenant (who pays rent) which is 1,000,000 yen minus taxes (income tax 20.42%).
Then, at the beginning of the year, you will file a tax return and add up the profit and loss such as expenses etc, and refund the taxes.
B) For corporation
In the case that a person living in Korea buys a condominium in Tokyo and receives 1 million yen in rent every month.
The landlord (a corporation established in Japan) will receive 1,000,000 yen from the tenant (the person who pays the rent).
Then, at the beginning of the year, you will file a tax return and add up the profit and loss such as expenses etc, and pay the taxes.
The taxes to be paid in both cases are roughly the same but there are differences in whether they are paid first or later. Also, you can open a bank account in Japan if you own real estate in a Japanese corporation so there is an advantage that you can save remittance fees without the need for overseas remittance.
For more details, it is best to consult with a tax accountant or accountant.We have affiliated with tax accountants, accountants, and lawyers who are also knowledgeable about Korean tax affairs.
If you have any questions, please feel free to contact us.