When considering the purchase of a home, one question concerns everyone: “How much will I actually need?” This article explains the full picture of the costs involved in buying a newly built home, from construction costs and land prices to ancillary work and various fees.
What is the typical cost of buying a newly built home?
There are two types of newly built home purchases: custom-built homes and built-for-sale homes. The nationwide average purchase costs are as follows.
- Custom-built home：approximately JPY 39 million
- Built-for-sale home：approximately JPY 38 million
Custom-built homes tend to cost slightly more because they offer greater design flexibility. In addition, purchase price ranges differ between the Tokyo metropolitan area and regional areas due to differences in land prices and income levels.
Housing grade guide by budget
| Budget | Total floor area | Main features |
|---|---|---|
| JPY 10 million range | 90〜110㎡ | Simple exterior and only the minimum necessary equipment |
| JPY 20 million range | 110〜120㎡ | Tile exterior walls and a balcony may also be possible |
| JPY 30 million range | 120〜130㎡ | Well-equipped with features such as floor heating and a dishwasher |
| JPY 40 million range | 130㎡ or more | An inner courtyard, large windows, and premium building materials may also be selected |
What is included in the cost of buying a newly built home?
Construction costs (70〜80% of total cost)
Construction costs account for 70〜80% of the total cost. These include the foundation, exterior work, interior finishing, and residential equipment installation costs. Because costs vary significantly depending on the contractor and construction method, obtaining and comparing multiple estimates is important.
Land cost
If you are acquiring land as well, it becomes one of the largest costs after construction. The closer the property is to the city center, the higher the price, and land prices can vary significantly by area even within the same prefecture.
Ancillary work costs (20〜30% of total cost)
These include exterior work, land preparation, infrastructure development, industrial waste disposal, and building confirmation application fees. Exterior work costs are easy to overlook and often cause budget overruns, so careful attention is necessary.
Other fees (by timing)
At the time of purchase contract：earnest money deposit (5〜10% of the property price)
At handover：stamp tax, registration and license tax, judicial scrivener fees (about JPY 100,000), fire and earthquake insurance, housing loan fees, and brokerage fee (half)
After handover：real estate acquisition tax, moving costs, furniture and appliance purchase costs, TV antenna, and internet installation costs
For guidance on how to build a funding plan, the guide to fixed asset tax for rental property management is also helpful.
Related reading
Frequently Asked Questions (FAQ)
Q1. How much should I expect for “other fees” when buying a newly built home?
A general guideline is about 3〜8% of the property price. The main components are the housing loan guarantee fee, fire insurance, registration and license tax, and judicial scrivener fees.
Q2. Which is usually more cost-effective, a custom-built home or a built-for-sale home?
In general, built-for-sale homes tend to keep costs lower because they are standardized. However, if the land cost is included, the total amount may be higher.
Q3. When is the cheaper season for moving costs?
Late March, April, and the year-end and New Year period are peak seasons for moving companies, so costs rise. Quieter periods such as May, June, and November are generally more affordable.
Q4. What helps improve the chances of passing a housing loan screening?
Annual income, length of employment, existing borrowing amounts, and credit information are the main screening items. Completing multiple pre-screenings and increasing the ratio of your own funds can work in your favor.
