How Much Are the Initial Costs of Buying a Condominium?

When purchasing a condominium, various upfront costs arise in addition to the property price itself. Because the breakdown and amount of these costs differ significantly depending on whether the property is new or pre-owned, it is important to understand them in advance. Here, we explain the typical upfront costs involved in buying a condominium, their breakdown, and practical ways to keep those expenses under control.

How much are the typical upfront costs for new and pre-owned condominiums?

Upfront costs for purchasing a condominium vary considerably depending on the type of property.

• New condominium: approximately 3% to 6% of the property price
• Pre-owned condominium: approximately 6% to 9% of the property price

For example, for a condominium priced at 30 million yen, typical upfront costs are around 900,000 to 1.8 million yen for a new unit and 1.8 million to 2.7 million yen for a pre-owned unit. The main reason pre-owned properties cost more upfront is that brokerage fees and renovation costs are added.

What is included in the costs incurred at purchase and contract signing?

Upfront costs when purchasing a condominium occur at several stages, as outlined below.

At the time of the sales contract

• Stamp tax: 20,000 yen for property prices from 10 million to 50 million yen, and 60,000 yen for 50 million to 100 million yen
• Deposit: 5% to 10% of the property price (paid in cash)
• Down payment: prepared separately from the deposit (0 yen to 10% to 20% of the property price)

Before handover

• Home loan guarantee fee: approximately 200,000 yen per 10 million yen borrowed
• Home loan administrative fee: either a fixed amount or a percentage-based fee of 2.2% of the borrowed amount
• Fire insurance and earthquake insurance premiums: often required when signing a home loan agreement
• Registration and license tax, plus registration service fees: roughly several tens of thousands of yen to about 200,000 yen
• Property tax settlement payment: prorated with the seller when purchasing partway through the year

After move-in

• Real estate acquisition tax: paid about six months to one year after acquisition
• Fixed asset tax and city planning tax: incurred every year (new properties may qualify for a five-year half-rate reduction)

Why are upfront costs higher for pre-owned condominiums?

There are two main reasons why upfront costs for pre-owned condominiums are higher than for new ones.

• Brokerage fee: 3% of the property price + 60,000 yen + consumption tax (for new properties, this is often unnecessary when purchased directly)
• Renovation costs: roughly several hundred thousand yen to 3 million yen (or 5 million to 10 million yen for large-scale renovations)

How can upfront costs be reduced?

The following methods can help reduce the burden of upfront costs.

• Use a digital contract for the home loan to save on stamp tax
• Across multiple financial institutions, compare administrative fees
• Target the off-season for moving to lower costs
• Tax relief measures for new condominiums can be used (fixed asset tax and real estate acquisition tax)

Frequently Asked Questions (FAQ)

Q. Can I buy a condominium without a down payment?

Yes, it is possible to obtain a home loan with a 0 yen down payment. However, because the borrowing amount increases, the monthly repayment burden becomes heavier. In practice, preparing a down payment of 10% to 20% of the property price is common.

Q. Can upfront costs be included in the loan?

Depending on the financial institution, they may be incorporated through a separate loan for ancillary costs. However, because the total repayment amount increases, it is generally advisable to prepare these funds in cash if possible.

Q. Is the application fee for a new condominium refundable?

If the purchase is canceled, the application fee (usually up to 100,000 yen) is generally refunded.