Documents Required for Real Estate Registration by Foreign Nationals
When foreigners buy or sell real estate in Japan, the documents required for registration differ significantly from those required for Japanese nationals. Since many countries do not have systems for resident registration certificates or seal registration certificates, alternative documents must be prepared.
For Foreign Nationals with a Status of Residence
Individuals holding work-related residence statuses such as “Engineer, Specialist in Humanities, or International Services” or “Management and Administration,” as well as those holding status-based residence statuses such as “Spouse of a Japanese National” or “Permanent Resident,” are registered in the Basic Resident Register just like Japanese nationals. Since they can obtain a Resident Certificate and register their personal seal, they can also obtain a Seal Registration Certificate.
For Short-Term Residents and Overseas Residents
Foreign nationals without a Resident Record require the following alternative documents.
In lieu of a Resident Certificate
- Affidavit + Copy of Passport (prepared at a notary office in the home country)
- A document equivalent to a certificate of residence registration from your home country or country of residence
In lieu of a seal registration certificate
- Certificate of Signature or Affidavit with a certified signature (issued by the embassy or consulate in Japan)
- For South Korea and Taiwan, a seal registration certificate from the home country may be used
Please note that while China also has a seal system, individuals generally do not own seals, and there is no seal certification system, so caution is required.
Changes to the registration system starting in 2024
Mandatory Romanization (Starting April 2024)
Starting in April 2024, when foreign individuals acquire property ownership, Romanized spelling must be included in addition to the Japanese spelling of their name.
- Romanized names must be in the order "Last Name → First Name" and written entirely in uppercase letters
- There must be a space between the family name and given name (symbols such as “・” cannot be used)
- Characters or symbols other than Roman letters are not permitted
- Proof: Copy of residence certificate or passport
Registration of a Domestic Contact (Effective April 2024)
If the registered owner of the property does not have an address in Japan, registration of a domestic contact is now required. The contact may be either an individual or a corporation. Even if there is no domestic contact, registration stating "no contact available" is required.
Taxes Related to Real Estate Transactions by Foreign Nationals
Taxes at the Time of Purchase
- Real Estate Acquisition Tax: Levied only once at the time of acquisition. Calculated by multiplying the assessed value for fixed asset tax by the tax rate
- Registration and License Tax: Levied upon registration of the transfer of ownership
- Stamp Tax: Affixed to the sales contract
Taxes During Ownership
- Property Tax: Levied on the owner as of January 1 of each year
- Urban Planning Tax: Levied on real estate located within urbanized areas
Taxes at the Time of Sale
- Capital Gains Tax: Taxed on capital gains. Tax rates differ between long-term transfers (held for over 5 years) and short-term transfers (held for 5 years or less)
For non-residents, filing and payment of these taxes must be handled through a tax representative.
Appointment of a Tax Agent
When a non-resident or foreign corporation purchases real estate, they must appoint a tax representative to handle tax filing and payment procedures on their behalf.
Once a tax representative has been appointed, a “Tax Representative Notification Form” must be submitted to the director of the tax office with jurisdiction over the property’s location. After the notification is filed, all documents from the tax office will be sent to the tax representative.
In addition to taxes, it is necessary to maintain a local presence in Japan to handle matters such as the payment of condominium management fees and repair reserve funds, expressing opinions at general meetings of the homeowners’ association, and maintaining various contact points.
Notification under the Foreign Exchange and Foreign Trade Act
Real estate transactions with non-residents require ex post notification under the Foreign Exchange and Foreign Trade Act (Foreign Exchange Act).
- Non-resident: Submit a "Report on Transactions" to the Bank of Japan
- Resident (Seller, etc.): Submit a “Report on Payments, etc.” to the Bank of Japan
- Submission Deadline: Within 20 days from the day following the transaction
Cases Where Reporting Is Not Required
- When the property is acquired for residential use by the non-resident themselves, or by their relatives or employees
- Acquisition for the non-resident’s own office use
- Acquired from another non-resident
However, vacation homes and second homes do not qualify as "residential use," so reporting is required.
Preparation of Japanese Translations
When using documents written in a foreign language for registration, a Japanese translation bearing the translator’s signature or name and seal must be attached. The translator may be the person themselves or a third party. A full translation is not required; translating only the parts relevant to the certification is sufficient.
Frequently Asked Questions (FAQ)
Q. When a foreign national purchases a condominium, how should they handle matters with the homeowners’ association?
You must pay management fees and repair reserve funds and express your intentions at general meetings. For non-residents, it is important to secure a contact person in Japan who can handle communications and matters on your behalf. As of April 2024, registering a domestic contact person has also become mandatory.
Q. Where can I have an affidavit prepared?
You can have it prepared at a notary office in your home country or at your country’s embassy or consulate in Japan. We recommend confirming in advance whether it can be issued and what documents are required.
Q. What should I be aware of when paying for real estate via international wire transfer?
The main challenges are high remittance fees and the time required for processing. Additionally, if the transfer is made to an overseas bank account with a month-end balance exceeding the equivalent of 100 million yen, a separate report is required. Verifying the source of funds is also a critical point.
