NEWS

Did you know that Japanese real estate is attracting attention from foreigners for residential and investment purposes? Japanese real estate can be purchased by foreigners who do not have permanent resident status, and there are no ownership restrictions, so they can freely buy, sell, and inherit real estate. They can freely buy, sell, and inherit real estate in Japan, and they are required to pay taxes according to the same rules as Japanese nationals.

When purchasing real estate as an investment property, there are strict restrictions on purchase in China and other countries, but there are no restrictions on purchasing real estate in Japan just because you are a foreigner. Japanese real estate is popular among foreign investors because it can be purchased with less capital than overseas real estate and high yields can be expected.

Foreign buyers are required to have a residence card or other documentation at the time of contract. In addition, it may be difficult to prepare a copy of the foreign resident card or certificate of seal impression, and alternative documents may be required, so you will need to have them prepared well in advance. On the other hand, when selling to a foreigner who does not live in Japan, the procedures and other details are different, so you need to check with the other party in advance.

Here, let us review the general flow of real estate sales.

1. Real estate appraisal

2. Mediation contract with a real estate company

3. Sale activity

4. Sales contract

5. Settlement and delivery

Even if the sales partner is a foreigner, sales are advanced by the above-mentioned flow.

Sales contracts should be prepared in Japanese and translated if necessary.
Sales contracts should be executed in the same manner as with Japanese counterparts, and the sales contract should be prepared in Japanese. However, if the counterparty does not understand Japanese, there is a possibility that the Japanese contract will not be valid. In such cases, it is necessary to explain the contract in the language of the other party's country, and if necessary, a translated version of the contract must be prepared.

If an interpreter is required at the time of contract, the sales contract and the explanation of important matters must be signed and sealed (signed) by the interpreter, and a letter of attorney stating that the interpreter will interpret the contents of the sales contract and the explanation of important matters is required.


Points to note when selling real estate to a foreigner
Foreigners have a different language and culture from Japanese. Even if it is common knowledge for Japanese people, it may not be understood by foreigners. Although the procedures themselves are not much different from those for Japanese nationals, there are many things you need to pay attention to because you are dealing with a foreigner.


There is a possibility that a mortgage loan will not be approved.
Since buying and selling real estate is an expensive transaction, the buyer will basically have to take out a mortgage loan to purchase the property. However, there is a high possibility that a foreigner will not be able to obtain a mortgage loan. Financial institutions are not very active in providing loans to foreigners, since they may take money away to their home country if they take out a mortgage.

Basically, only holders of Japanese nationality or special permanent residents are eligible for a mortgage loan. If a mortgage loan is not available, the purchase price will be a lump-sum cash transaction. Before signing a purchase contract, it is necessary to confirm whether or not a mortgage loan can be obtained, and if not, whether or not lump-sum payment of the purchase price can be made.


It takes time for the property to be delivered.
If you are a foreigner living in Japan, the basic process is almost the same as for Japanese nationals. However, it is important to note that it is likely to take longer to conclude a sales contract with a foreigner.

Not only does it take time to prepare the necessary documents, but also the difference in time awareness with regard to scheduling has a lot to do with it. Japanese people tend to pay deposits and complete procedures on time and as quickly as possible.

However, foreigners often have a different sense of time from the Japanese, and may be held back until the very last minute. In some cases, they look for another property until the very last minute, only to have the contract terminated at the last minute.

To avoid unnecessary delays, it is a good idea to have the due date clearly stated in the contract, and to have a plan for what to do if you cannot meet the deadline.

You want to avoid problems that may occur in the future in advance.


We share with you the importance of keeping the details of the deal in writing to prevent problems.

Please look forward to the next issue!


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