Purchasing a Property in Japan: A Personal Experience

While you are living in Japan, you would come across the question... should I buy a property or keep renting...

For those considering buying a house in Japan, I recently navigated this process myself and thought it would be valuable to share my insights with you - life in Japan!

The first step is determining where to buy and whether to opt for land or a second-hand house. You can purchase an old house and demolish it if you wish to build from scratch as finding suitable flat land can be a challenge.

Finding the right piece of land was the most daunting aspect for us. In our area around Tsukuba, formerly major farmlands, unique regulations apply to the lands we desired. For instance, the "10 Nen Toku-rei**" rule, requiring residency in the area for over ten years, posed a significant hurdle.

In new development areas, house makers often purchase land and offer it as part of a package deal with a built house. However, we faced difficulties as our preferred house maker couldn't secure land for us, which was a stressful period.

Once you find area you wish to live, you have two choices: finding a house maker yourself or opting for a package deal where the land comes with a predetermined house maker. 

It highlights the importance of establishing a budget once you have chosen the area you want to live in and selected a house maker to collaborate with. Additionally, it hints at the potential for costs to increase as you progress through the design process and make specific requests to the house maker.

Notably, house loans are for the house itself, not the land. You can only use a loan for land if you purchase a house simultaneously. It means everything needs to run all at once.

The next stage involves dealing with banks. You can benefit from tax breaks with a house loan, so combining family income is advisable. However, if you lack permanent residency (PR), your bank options are limited, and interest rates are higher. Considering PR when applying for a house loan is advisable, as it affects interest rates. In our case, the primary income earner in our household is my husband, an Australian whose visa has been supported by his business since we arrived in Japan. Following the birth of our second child, my work has been limited to part-time employment. Therefore, even though I am a Japanese, I can’t be the primary of the loan lender. As you can imagine, now we are rushing to PR process…

House makers assist with bank assessments. Once you pass the initial assessment, securing a loan is likely. Japanese banks also consider job stability, so changing jobs during this process is discouraged.

Finalizing the loan and land purchase involves multiple visits to the bank. If the land belongs to your house maker, the process is streamlined, but if you purchase land from an owner, a land transfer process is required.

If you feel you are treated unfair because of your nationality, there is a place you can contact which runs by Japanese government. Human rights consultation for foreigners. It is available in Engish, Chinese, Nepali, Spanish, Tagalog, Portuguese, Vietnamese, Indonesian, Thai.

https://www.moj.go.jp/JINKEN/jinken21.html

In my next blog, I'll delve into the exciting process of house designing. Stay tuned!

** 10 nen-tokurei: 10-year special exemption" refers to a regulation applied when acquiring real estate in specific areas "Aza*". Typically, when purchasing certain land or buildings, it is required to reside in that area for a certain period. If this period is set at 10 years, it is referred to as the "10-year special exemption." When this exemption applies, fulfilling the residency requirement for 10 years may entitle you to certain tax and fee benefits. (*"Aza":The term "Aza" refers to the designated sections or blocks within a particular area registered in official address in Japan - it may not be shown in your post address. In Japan, administrative divisions such as prefectures, cities, towns, and villages are subdivided into smaller units, with each unit identified by a specific "aza" designation. For example, within a given area, there are "chō, chōme" (districts), and each chō, chōme contains multiple "aza." These "aza" are typically used to denote the layout of roads and buildings within the area.).