In this article we take a look at some issues related to owning a second-home in Japan for overseas buyers and investors and how a property manager can make it easier for you to manage your property from overseas.
Can a foreigner buy property in Japan?
A foreigner can buy and own both property and land in Japan.
Can I get a loan from a Japanese bank as an overseas buyer?
Japanese banks generally do not lend to offshore buyers. You may be able to get a loan from a bank in your home country, but providing all the documentation required for underwriting and how your bank evaluates the value of the property may be significant hurdles in getting the loan approved in a timely manner. Also, as in any market, the seller ultimately has discretion as to whether to accept your offer and using offshore financing may be a reason they reject an offer.
How do I get financing as a foreign resident of Japan?
If you are a foreign resident of Japan, please see this article on Basic Requirements for Getting a Mortgage as a Foreigner in Japan.
What documents do I need as an overseas purchaser of real estate?
Aside from the financing-related documentation you provide to your lender, when buying real estate in Japan, you will also need to submit documents that provide proof of where you are currently living.
For residents of Japan this is a simple document that can be received at a ward office, but for investors outside the country, the exact documents differ from country to country. Please speak with a representative at your country’s embassy to confirm exactly what documents the Japanese government will require for you to register your ownership of the property.
Registration of Property Rights
After the completion of a property purchase, the new proprietary right is registered at the Legal Affairs Bureau.
A “Notice of Information for Registration Identification” will be issued to you as the new owner.
When registering ownership of a property, the buyer’s name will be written on the property’s ownership history, but this can only be done in Japanese characters.
For those investors from a country that commonly uses Japanese “Kanji” or Chinese characters, it is acceptable to write the new owner’s name in that form.
However, for buyers from a western country that does not use these characters, it is important to decide how you will record you name in Japanese “Katakana” characters which are commonly used for foreign loan words and foreigners’ names.
Real estate agencies in Japan will be able to help you with this.
How a Property Management Company Can Help You Manage Your Second-Home in Japan
The following information on how a property management company can help you manage your second-home in Japan, was provided with the kind assistance of Mr. Nils Herchenroeder of Tokyu Housing Lease, one of Japan’s leading property management companies.
How do I turn on utility (electricity, gas, and water) services?
In order to use electricity, gas and water, you will need to submit a written application to the local utility providers. Also, for the gas line to be turned on, someone must be present at the property itself.
Some property management (PM) companies will take care of opening utility accounts on behalf of owners, as well as be present on your behalf for the opening of the gas line.
For paying monthly utility bills, your PM may be able to make proxy payments for you, since these bills require a Japanese bank account.
An easier way might be to set up automatic payments using a credit card issued in your name. However, please be aware that the application forms will usually be in Japanese and have to be taken care of while you are in Japan.
What is the so-called “Patrol Service” that some property managers offer?
Some PM companies offer a “patrol service,” which involves checking the ventilation, water circulation, the property’s mailbox, and the inside of the unit in the owner’s absence.
A patrol of the property can help prevent unwanted smells which result from a property not being properly ventilated or the water supply not being using for an extended period of time.
In your absence, it is also a good idea to have your mailbox regularly checked to empty it of advertisements which may cause the mailbox to overflow and make you miss important documents.
And, of course, while you are away from your property, it is good if you can arrange for a responsible third-party to check the inside of your home to make sure that everything is in order.
It is best practice for a property management company to send the owner a written report each time the property is patrolled.
What are the legally required inspections for my property?
Fire safety inspections are required by law and happen at fixed intervals during the year.
After-service is offered by the developer and involves fixing equipment and the interior of the property. Pipe cleaning is also arranged by the developer at some point and will involve cleaning all the pipes in your unit.
For all of these legally required inspections, someone as to be present to let the staff into the property.
Some PM companies offer a proxy attendance service on your behalf. This usually includes a written report after the procedure has been completed.
What should I do about paying the yearly property taxes?
Every owner is legally required to pay annual property taxes.
For overseas non-resident owners who do not have a Japanese bank account, some PM companies can pay property taxes on your behalf.
You may also be interested in: Managing an Investment Property in Japan: FAQs Part 1 and Buying and Managing a Rental Investment Property in Japan
If you are interested in learning more about Tokyu Housing Lease’s PM services, please fill out the form below, and a representative will contact you shortly.