If you buy a resale (chūko, 中古) condominium in Tokyo priced at ¥30 million (approx. USD 190,000 at ¥158/US$1, the rate as of August 2026), plan to set aside roughly ¥2.07 million (approx. USD 13,100) in closing costs on top of the purchase price — about 6.9% of the price. This article exists so that you, as a prospective buyer, can work out that number for your own case before you sign anything.
Here is the first thing that surprises most international buyers about Japanese real estate: this is a uniquely Japan-specific cost structure with no direct Western equivalent, and not only because the line items are unfamiliar. Japan has no MLS (Multiple Listing Service) with a public record of actual closing prices. In the US, UK, Australia, and most of Europe, a buyer or their agent can pull historical sold prices for comparable units within minutes. In Japan, the closest official equivalent — the Ministry of Land, Infrastructure, Transport and Tourism's (MLIT, 国土交通省) real estate transaction price survey and REINS market reports — publishes aggregated, delayed statistics rather than address-level sold prices. That opacity is precisely why a guide like this one, built entirely from primary regulatory and industry-association sources, matters more in Japan than it might in a market where you could simply search for three recent comparables.
Two regulatory changes make older cost estimates unreliable. The real estate brokerage commission cap changed under a new government notice effective July 1, 2024, and Japan's mortgage tax deduction (jūtaku rōn genzei, 住宅ローン減税) was expanded for buyers moving in from 2026 onward. Budgeting with pre-2024 numbers can leave a gap of several hundred thousand yen — several thousand dollars — right before signing. Below, we lay out price-tier quick-reference tables, tax tables, and a fully itemized worked example, every figure sourced to a primary document (Japanese government ministries, the National Tax Agency, and industry associations), with USD conversions throughout. All USD figures in this article use approximately ¥158 = US$1, the exchange rate as of August 2026; they are for orientation only and will drift with the market, so recheck the live rate before finalizing any purchase budget.
Key takeaways
- Closing costs on a resale condominium run about 6–8% of the purchase price: roughly ¥2.07 million (approx. USD 13,100) on a ¥30 million (approx. USD 190,000) unit, and roughly ¥3.27 million (approx. USD 20,700) on a ¥50 million (approx. USD 316,500) unit.
- The brokerage commission cap, under the current notice effective July 1, 2024, is 5.5% / 4.4% / 3.3% (tax included), tiered by price; for properties over ¥4 million (approx. USD 25,300), the cap works out to "price × 3.3% + ¥66,000 (approx. USD 418)."
- Most closing costs are paid in cash at handover (settlement). Registration tax, judicial scrivener fees, loan origination charges, insurance premiums, and prorated adjustments all cluster on that single day.
- Starting with 2026 (Reiwa 8) move-ins, Japan's mortgage tax deduction was extended five more years, with higher borrowing caps and longer deduction periods for existing (resale) homes, and the floor-area requirement relaxed to a standard 40 square meters.
- Real estate acquisition tax frequently comes to ¥0 on both the building and the land portion, provided the property meets age and assessed-value conditions.
How Much Do Total Closing Costs Run? A Price-Tier Quick Reference
Here is the conclusion up front. When you finance a resale condominium with a mortgage, closing costs typically fall within 6–8% of the purchase price, and the percentage edges slightly lower as the price rises. That is because the brokerage commission scales with price, while stamp duty and judicial scrivener fees barely increase at all as the price climbs.
For US, UK, or Australian buyers, this is worth pausing on: American home-buyers often think in terms of "closing costs" in the 2–5% range because the seller customarily pays the buyer's agent commission. In Japan, the buyer typically pays the brokerage fee directly, which is the single largest line item below — a structural difference, not merely a naming difference.
Closing Cost Simulation for Properties Priced ¥20 Million–¥50 Million
The table below simulates a resale condominium in Tokyo's 23 wards (23-ku, 23区) — 25 years old, 60 square meters of exclusive floor area, newly built after April 1997 — purchased with a mortgage covering 80% of the price. Registration tax and acquisition tax are calculated from the fixed-asset tax assessed value (kotei shisan-zei hyōka-gaku, 固定資産税評価額), so this simulation assumes the assessed value equals 60% of the purchase price (40% land share, 20% building share). The prorated adjustment figure adds half a year of property tax and city-planning tax plus 1.5 months of management fee and repair reserve fund (based on the FY2023 nationwide average of ¥24,557 / approx. USD 155, from the Condominium Comprehensive Survey). Tax rates and caps below follow the primary sources cited throughout this article, but the assessed-value ratio and the insurance/proration assumptions are simulation assumptions — please treat them as illustrative, not as a quote for your specific unit.
| Line item | ¥20 million (approx. USD 126,600) | ¥30 million (approx. USD 190,000) | ¥40 million (approx. USD 253,200) | ¥50 million (approx. USD 316,500) |
|---|---|---|---|---|
| Brokerage commission (cap, tax included) | ¥726,000 (approx. USD 4,600) | ¥1,056,000 (approx. USD 6,680) | ¥1,386,000 (approx. USD 8,770) | ¥1,716,000 (approx. USD 10,860) |
| Stamp duty (sale contract, reduced rate) | ¥10,000 (approx. USD 63) | ¥10,000 (approx. USD 63) | ¥10,000 (approx. USD 63) | ¥10,000 (approx. USD 63) |
| Stamp duty (loan agreement) | ¥20,000 (approx. USD 127) | ¥20,000 (approx. USD 127) | ¥20,000 (approx. USD 127) | ¥20,000 (approx. USD 127) |
| Registration tax (land transfer, 1.5%) | ¥120,000 (approx. USD 760) | ¥180,000 (approx. USD 1,140) | ¥240,000 (approx. USD 1,520) | ¥300,000 (approx. USD 1,900) |
| Registration tax (building transfer, 0.3%) | ¥12,000 (approx. USD 76) | ¥18,000 (approx. USD 114) | ¥24,000 (approx. USD 152) | ¥30,000 (approx. USD 190) |
| Registration tax (mortgage registration, 0.1%) | ¥16,000 (approx. USD 101) | ¥24,000 (approx. USD 152) | ¥32,000 (approx. USD 203) | ¥40,000 (approx. USD 253) |
| Judicial scrivener fee (transfer + mortgage) | approx. ¥100,000 (approx. USD 630) | approx. ¥100,000 (approx. USD 630) | approx. ¥100,000 (approx. USD 630) | approx. ¥100,000 (approx. USD 630) |
| Loan origination fee (flat-rate, 2.2%) | ¥352,000 (approx. USD 2,230) | ¥528,000 (approx. USD 3,340) | ¥704,000 (approx. USD 4,460) | ¥880,000 (approx. USD 5,570) |
| Earthquake insurance (annual, Structure A, Tokyo) | ¥27,500 (approx. USD 174) | ¥27,500 (approx. USD 174) | ¥27,500 (approx. USD 174) | ¥27,500 (approx. USD 174) |
| Prorated adjustment (property tax, management fee, etc.) | approx. ¥82,000 (approx. USD 520) | approx. ¥105,000 (approx. USD 665) | approx. ¥128,000 (approx. USD 810) | approx. ¥150,000 (approx. USD 950) |
| Real estate acquisition tax | ¥0 | ¥0 | ¥0 | ¥0 |
| Total | approx. ¥1.47 million (approx. USD 9,300) | approx. ¥2.07 million (approx. USD 13,100) | approx. ¥2.67 million (approx. USD 16,900) | approx. ¥3.27 million (approx. USD 20,700) |
| Ratio to purchase price | 7.3% | 6.9% | 6.7% | 6.5% |
Fire insurance is excluded from this table because premiums vary widely by coverage scope and insurer, with no published rate schedule. Earthquake insurance is different: Japan's Ministry of Finance (財務省, Zaimushō) publishes standard base rates, so we can show one year of premium for Structure A (i-kōzō, イ構造 — steel-frame/reinforced-concrete, the classification condominiums fall into) in Tokyo, at ¥27,500 (approx. USD 174) per ¥10 million (approx. USD 63,300) of coverage. In practice, many buyers pay for five years of fire insurance up front at signing, which adds another few tens of thousands to well over ¥100,000 (roughly USD 200–USD 700) on top of this table.
Real estate acquisition tax shows as ¥0 here because, under this simulation's assumptions, the building's fixed-asset tax assessed value falls below the ¥12 million (approx. USD 75,900) deduction threshold, and the land deduction likewise exceeds the tax otherwise owed. Older properties carry a smaller deduction and will owe real tax — we walk through the calculation in the "Costs After Move-In" section below.
Three Moments When Closing Costs Become Due in Cash
Most buyers who stumble over closing costs are not confused about the total — they misjudge the order in which payments come due. The earnest-money deposit moves in cash at contract signing, and the bulk of remaining closing costs cluster at handover. Use the table below to check your cash-flow timeline.
| Timing | Main line items | Approx. figure for the ¥30 million (approx. USD 190,000) case | Payment method |
|---|---|---|---|
| At contract signing | Earnest-money deposit, stamp duty (sale contract), half of the brokerage commission | Deposit ¥1.5–3.0 million (approx. USD 9,500–19,000) + approx. ¥540,000 (approx. USD 3,420) | Cash, in principle for all of it |
| At handover (settlement) | Registration tax, judicial scrivener fee, loan origination fee or guarantee fee, stamp duty (loan agreement), fire/earthquake insurance, prorated adjustment, remaining brokerage commission | approx. ¥1.53 million (approx. USD 9,680) | Cash, or funded from the disbursed loan |
| After move-in (typically 3–6 months later) | Real estate acquisition tax | ¥0 to several hundred thousand yen (roughly USD 0 to a few thousand dollars) | Paid against a tax notice mailed by the prefecture |
The earnest-money deposit (tetsuke-kin, 手付金) is exchanged as "cancellation money" (kaiyaku tetsuke, 解約手付) and is credited toward the purchase price at closing — it is not "extra money going out the door." But because it must be ready in cash at the moment of contract signing, it is, in cash-flow terms, the single heaviest peak in the whole process. Unlike the refundable "earnest money in escrow" structure common in the US, a Japanese deposit is not held by a neutral third party by default and is forfeited outright if the buyer walks away — worth discussing with your agent before you sign.
Which Costs Can Be Folded Into the Mortgage, and Which Require Cash
A growing number of Japanese lenders offer "closing-cost loans" or mortgage products that bundle closing costs on top of the purchase price. Not everything qualifies, however.
- Costs that are usually loan-eligible: brokerage commission, registration tax, judicial scrivener fee, fire insurance premium, real estate acquisition tax. What each lender counts as "eligible closing costs" varies by product.
- Costs that generally require cash: the earnest-money deposit, stamp duty (revenue stamps must be affixed at signing), and the prorated adjustment due at handover.
- Costs deducted directly from the loan proceeds: flat-rate origination fees. Some lenders — Docomo SMTB Net Bank (formerly SBI Sumishin Net Bank) is one example — deduct the origination fee directly from the disbursed loan amount rather than requiring a separate cash payment.
Folding closing costs into the mortgage lightens your initial cash burden. On the other hand, it raises your outstanding loan balance and your loan-to-value ratio against the collateral, which can make underwriting stricter. For more on how Japanese lenders evaluate resale-condominium mortgage applications, see our related guide on what lenders check in a resale condominium mortgage review.
Resale Condominium Market Prices and What Buyers Actually Bring in Cash
Before calculating your own closing costs, it helps to know where your target price range sits in the broader market — that context sharpens the precision of your budget.
Greater Tokyo Resale Condominium Closing Prices (April–June 2026)
According to the "Quarterly Market Watch Summary Report, April–June 2026" (Kihō Market Watch Summary Report) from the East Japan Real Estate Distribution Organization (東日本不動産流通機構, commonly known as Higashi-Nihon REINS), resale condominium transactions across the greater Tokyo area totaled 11,853 units (down 2.0% year-on-year), with an average closing price of ¥52.01 million (approx. USD 329,200), an average closing price per square meter of ¥831,300 (approx. USD 5,260/m²), an average exclusive floor area of 62.57 m² (about 673 sq ft), and an average building age of 27.70 years.
| Area | Average closing price | Closing price per m² |
|---|---|---|
| Greater Tokyo area (overall) | ¥52.01 million (approx. USD 329,200) | ¥831,300 (approx. USD 5,260/m²) |
| Tokyo 23 wards | ¥75.74 million (approx. USD 479,400) | ¥1,362,200 (approx. USD 8,620/m²) |
| Tokyo, Tama area | ¥38.82 million (approx. USD 245,700) | — |
| Yokohama City / Kawasaki City | ¥43.92 million (approx. USD 278,000) | — |
| Rest of Kanagawa Prefecture | ¥30.95 million (approx. USD 195,900) | — |
| Saitama Prefecture | ¥30.48 million (approx. USD 192,900) | — |
| Chiba Prefecture | ¥29.88 million (approx. USD 189,100) | — |
The Tokyo 23-ward average, at ¥75.74 million (approx. USD 479,400), runs about 1.46 times the greater-Tokyo-wide average. Even within "resale condominiums" as a single category, the 23 wards and outer prefectures like Saitama or Chiba diverge by nearly double in actual closing-cost yen. You can reasonably map the ¥20 million and ¥50 million columns of the quick-reference table above onto that geographic spread. For a fuller breakdown of what drives price movement, see how resale condominium prices are determined and how to time your purchase.
Average Purchase Funds and the Cash-to-Loan Ratio for Resale Buyers
According to MLIT's "FY2024 Housing Market Trends Survey Report" (published June 2025), households that purchased an existing (resale) condominium spent an average of ¥29.19 million (approx. USD 184,700; median ¥25.6 million / approx. USD 162,000), broken down into ¥12.78 million (approx. USD 80,900) in cash and ¥16.4 million (approx. USD 103,800) in borrowed funds. The cash-to-total ratio came to 43.8%.
For comparison, households that purchased a newly built condominium spent an average of ¥46.79 million (approx. USD 296,100), with a cash ratio of 44.7%. Resale buyers spend about ¥17.6 million (approx. USD 111,400) less on average than new-build buyers, yet the cash ratio is nearly identical between the two.
That 43.8% figure does not mean "you need a 40% down payment to buy." Households with substantial cash from inheritance or family gifts skew the average upward — a phenomenon less common among first-generation international buyers. What matters more for your own planning is this: closing costs of roughly ¥2.07 million (approx. USD 13,100) must, as a rule, come from cash on hand regardless of your down payment percentage, so even a zero-down strategy still requires a separate cash reserve sized for closing costs alone.
Costs Due at Signing: Earnest Money, Stamp Duty, and Brokerage Commission
On the day the sale contract is signed, three things move: the earnest-money deposit, stamp duty, and — often — half the brokerage commission. Of these, stamp duty and the brokerage commission are set by statute and government notice; only the earnest-money deposit is negotiated freely between the parties.
Typical Earnest-Money Deposit Ranges, and the 20% Cap When the Seller Is a Licensed Dealer
There is no general statutory rule fixing the size of the earnest-money deposit; in practice, it is commonly negotiated at 5–10% of the purchase price. Under the standard "cancellation deposit" (kaiyaku tetsuke) structure, a buyer who walks away forfeits the deposit, while a seller who walks away must repay double the deposit to the buyer (tetsuke bai-gaeshi, 手付倍返し) — a reciprocal walk-away penalty that has no precise US or UK equivalent, where earnest money is more often held in escrow and released or forfeited under narrower contractual conditions.
One protection worth knowing: when the seller is a licensed real estate dealer (takuchi tatemono torihiki gyōsha, 宅地建物取引業者) — as is the case with many "buy-and-resell" (kaitori saihan) companies that flip resale condominiums — Article 39 of the Building Lots and Buildings Transaction Business Act (宅地建物取引業法) caps the deposit at 20% of the price. If you are buying from an individual seller rather than a licensed dealer, this cap does not apply.
For a deeper look at typical deposit sizes and the cancellation-deadline clauses you should check before signing, see resale condominium earnest-money types, typical ranges, and contract-stage cautions.
Stamp Duty Differs Between the Sale Contract and the Loan Agreement
This is where many buyers get tripped up. Japan's Act on Special Measures Concerning Taxation provides a reduced stamp-duty rate for real estate sale contracts, but no such reduction applies to the mortgage loan agreement (kinsen shōhi taishaku keiyakusho, 金銭消費貸借契約書). For the same contract amount, the tax owed can more than double depending on which document you're looking at.
| Contract amount | Real estate sale contract (reduced rate) | Loan agreement (standard rate) |
|---|---|---|
| Over ¥5 million, up to ¥10 million (approx. USD 31,600–63,300) | ¥5,000 (approx. USD 32) | ¥10,000 (approx. USD 63) |
| Over ¥10 million, up to ¥50 million (approx. USD 63,300–316,500) | ¥10,000 (approx. USD 63) | ¥20,000 (approx. USD 127) |
| Over ¥50 million, up to ¥100 million (approx. USD 316,500–632,900) | ¥30,000 (approx. USD 190) | ¥60,000 (approx. USD 380) |
| Over ¥100 million, up to ¥500 million (approx. USD 632,900–3,164,600) | ¥60,000 (approx. USD 380) | ¥100,000 (approx. USD 633) |
The reduced rate on the sale-contract side applies to contracts drawn up from April 1, 2014 through March 31, 2027 (Reiwa 9), per the National Tax Agency's (国税庁, Kokuzeichō) Tax Answer No. 7108. The loan agreement, by contrast, is taxed under the standard "Document No. 1" rate schedule with no time-limited discount (Tax Answer No. 7140).
For a ¥30 million (approx. USD 190,000) property purchased with a ¥24 million (approx. USD 151,900) loan, that means ¥10,000 (approx. USD 63) in stamp duty on the sale contract and ¥20,000 (approx. USD 127) on the loan agreement — ¥30,000 (approx. USD 190) in revenue stamps combined.
Brokerage Commission Caps: Reading the Post-July-2024 Quick-Calculation Table
The brokerage commission cap is set under a government notice (Notice No. 1552 of 1970, issued by the then-Ministry of Construction) pursuant to Article 46 of the Building Lots and Buildings Transaction Business Act. That notice was revised by MLIT Notice No. 949 (dated June 21, 2024) and took effect July 1, 2024. The current caps are shown below, and — unlike the older notice — all figures already include consumption tax.
| Sale-price tier | Brokerage fee cap (tax included) | Old-style figure (tax excluded) |
|---|---|---|
| ¥2 million (approx. USD 12,660) or less | 5.5% of the price | 5% |
| Over ¥2 million, up to ¥4 million (approx. USD 12,660–25,300) | 4.4% of the price | 4% |
| Over ¥4 million (approx. USD 25,300) | 3.3% of the price | 3% |
| Low-priced vacant homes, etc. (¥8 million / approx. USD 50,600 or less) | Up to ¥330,000 (approx. USD 2,090) from either party | ¥300,000 (approx. USD 1,900) + consumption tax |
Because the tiers are calculated cumulatively and summed, properties over ¥4 million (approx. USD 25,300) reduce to the quick formula "sale price × 3.3% + ¥66,000 (approx. USD 418)." That matches exactly what you get by adding consumption tax to the pre-2024 shorthand of "3% + ¥60,000 (tax excluded)." In other words, the amount buyers actually pay has not changed — the notice's wording was simply reorganized to state tax-included figures directly.
Separately, under Article 7 of the notice, brokerage on the sale of a low-priced vacant home priced at ¥8 million (approx. USD 50,600) or less is capped at 1.1 times ¥300,000, i.e. ¥330,000 (approx. USD 2,090), per party. The ¥8 million figure in the table above is exactly the price point where the quick-calculation formula and the special exception converge on the same ¥330,000 figure. Below ¥8 million, the exception can produce a higher fee than the standard formula: at ¥5 million (approx. USD 31,600), for instance, the quick formula caps the fee at ¥231,000 (approx. USD 1,460), while the special exception allows up to ¥330,000 (approx. USD 2,090). This is the mechanism behind brokers in lower-priced regional markets charging more than the standard formula suggests — it is lawful, provided it stays within the special exception's own limit. MLIT's revised "Interpretation and Operation of the Building Lots and Buildings Transaction Business Act" guidance also makes explicit that brokers must disclose and obtain the client's agreement on the fee amount before signing the brokerage (agency) agreement.
| Sale price | Brokerage commission cap (tax included) |
|---|---|
| ¥8 million (approx. USD 50,600) | ¥330,000 (approx. USD 2,090) (identical under either formula) |
| ¥10 million (approx. USD 63,300) | ¥396,000 (approx. USD 2,510) |
| ¥20 million (approx. USD 126,600) | ¥726,000 (approx. USD 4,600) |
| ¥30 million (approx. USD 190,000) | ¥1,056,000 (approx. USD 6,680) |
| ¥40 million (approx. USD 253,200) | ¥1,386,000 (approx. USD 8,770) |
| ¥50 million (approx. USD 316,500) | ¥1,716,000 (approx. USD 10,860) |
| ¥70 million (approx. USD 443,000) | ¥2,376,000 (approx. USD 15,040) |
Keep in mind this figure is a ceiling, not a fixed price. The notice states only that brokers "may not receive more than" this amount — it sets no floor. When a firm represents both the buyer and seller in the same transaction (dual agency, common in Japan and distinct from the stricter dual-agency restrictions in many US states), the commission actually charged can vary within that ceiling.
Costs Due at Handover: Registration, Loan Fees, Insurance, and Prorated Adjustments
On handover (settlement) day, registration tax, judicial scrivener fees, loan-related charges, insurance premiums, and prorated adjustments all move at once. In the ¥30 million (approx. USD 190,000) case, this single day accounts for roughly ¥1.53 million (approx. USD 9,680) — more than 70% of total closing costs.
Registration Tax Rates and Their Expiration Dates
Registration tax (tōroku menkyo-zei, 登録免許税) is calculated by multiplying the value recorded in the fixed-asset tax ledger (the fixed-asset tax assessed value) by a statutory rate. The one exception is the mortgage registration, where the tax base is the loan principal itself rather than the assessed value. Buying a resale condominium requires three separate registrations.
| Type of registration | Tax base | Standard rate | Reduced rate | Reduced-rate expiration |
|---|---|---|---|---|
| Land (site-use-right) ownership transfer, by sale | Fixed-asset tax assessed value | 2.0% | 1.5% | March 31, 2029 (Reiwa 11) |
| Residential building ownership transfer | Fixed-asset tax assessed value | 2.0% | 0.3% | March 31, 2027 (Reiwa 9) |
| Mortgage registration for home-acquisition financing | Loan principal | 0.4% | 0.1% | March 31, 2027 (Reiwa 9) |
| (Reference) Residential building ownership preservation — new-build only | Fixed-asset tax assessed value | 0.4% | 0.15% | March 31, 2027 (Reiwa 9) |
The 1.5% reduced rate on land was extended three more years under the Reiwa 8 (2026) tax reform, pushing its expiration out to March 31, 2029.
One catch worth flagging: claiming the reduced rate on the building and mortgage registrations requires a Residential Building Certificate (jūtaku-yō kaoku shōmeisho, 住宅用家屋証明書) issued by the municipality, and that certificate's own eligibility rule includes a minimum floor area of 50 m². The mortgage tax deduction discussed later in this article now uses a relaxed 40 m² threshold in most cases — but registration-tax relief still requires 50 m². If you're considering a compact unit in the 40 m² range, treat these as two separate thresholds, not one. The certificate must also be issued within one year of the registration date to qualify.
Average Judicial Scrivener Fees and What to Check on the Estimate
Registration procedures are typically outsourced to a judicial scrivener (shihō shoshi, 司法書士 — Japan's licensed conveyancing specialist, broadly comparable to a conveyancer or real estate attorney in common-law jurisdictions). According to a "Fee Survey" conducted by the Japan Federation of Shiho-Shoshi Lawyer's Associations (日本司法書士会連合会) in March 2024, the nationwide average fees were as follows.
- Ownership transfer registration (sale, combined fixed-asset assessed value of ¥10 million / approx. USD 63,300): average ¥56,678 (approx. USD 359) (1,082 valid responses)
- Mortgage registration (loan amount ¥10 million / approx. USD 63,300): average ¥42,699 (approx. USD 270) (1,038 valid responses)
Fee schedules for judicial scriveners were deregulated years ago, so each practitioner sets fees independently today. These averages are a benchmark only and will vary by region and by the complexity of the file. A resale condominium settlement requires both an ownership transfer and a mortgage registration, so budget roughly ¥100,000 (approx. USD 630) in combined fees, plus registration tax and certificate costs on top.
When you receive an estimate, confirm that the fee and the disbursements (registration tax, certificate fees, transportation, etc.) are itemized separately. A single lump-sum figure makes it impossible to tell how much is statutory tax versus discretionary fee.
Upfront Guarantee Fee vs. Flat-Rate Origination Fee: Which Costs Less?
Japanese mortgage initial costs generally split into two structures: paying a guarantee fee to the bank's affiliated guarantor company, or paying no guarantee fee but a flat-rate origination fee calculated against the loan amount. The two look similar in headline cost, but they diverge sharply on whether you get money back after an early repayment.
| Comparison | Upfront guarantee fee | Flat-rate origination fee |
|---|---|---|
| Sample rate | ¥20,614 (approx. USD 130) per ¥1 million borrowed over 35 years (Resona Bank) | 2.2% of the loan amount (Docomo SMTB Net Bank) |
| ¥24 million (approx. USD 151,900) loan, 35 years | ¥494,736 (approx. USD 3,130) | ¥528,000 (approx. USD 3,340) |
| ¥30 million (approx. USD 190,000) loan, 35 years | ¥618,420 (approx. USD 3,910) | ¥660,000 (approx. USD 4,180) |
| Payment method | Cash, or funded from loan proceeds, at disbursement | Some lenders deduct it directly from the loan proceeds |
| Refund on early repayment or refinancing | Unused portion refunded (minus a handling fee) | No refund |
| Relationship to loan term | Cheaper for shorter terms (10 years: ¥8,544 / approx. USD 54, per ¥1 million) | Scales with loan amount regardless of term |
Resona Bank's published guarantee-fee schedule charges ¥8,544 (approx. USD 54) per ¥1 million for a 10-year term, ¥14,834 (approx. USD 94) for 20 years, ¥19,137 (approx. USD 121) for 30 years, ¥20,614 (approx. USD 130) for 35 years, and ¥21,745 (approx. USD 138) for 40 years — the shorter the term, the cheaper the fee.
The decision rule breaks down like this: if you expect to make an early repayment or refinance within a few years, the guarantee-fee structure is generally the better choice, since you can expect a partial refund of the unused portion. If you intend to ride the loan to full term over 35 years and simply want the lowest interest rate, the flat-rate structure costs you nothing extra in practice. Some lenders also let you fold the guarantee fee into a higher interest rate (typically about +0.2 percentage points) instead of paying it upfront — that lowers your initial cash outlay but raises your total lifetime interest cost.
On group credit life insurance (dan-shin, 団信 — mortgage life insurance bundled into most Japanese home loans): private lenders typically fold the premium into the interest rate rather than billing it separately. However, enrollment can be denied on health grounds, in which case the loan itself cannot be issued. If you have a pre-existing condition, it's worth confirming underwriting requirements at the pre-approval stage, well before you're committed to a contract.
Fire Insurance and Earthquake Insurance Premiums
Most Japanese lenders require fire insurance as a condition of the loan. Because premiums swing widely with coverage scope, building structure, and policy term, there is no published official rate table for fire insurance. Earthquake insurance is different: the Ministry of Finance publishes standard base rates, so we can show concrete figures.
Condominiums fall under Structure A (i-kōzō, イ構造 — steel-frame and reinforced-concrete construction). For policies with a start date on or after October 1, 2022, the annual premium per ¥10 million (approx. USD 63,300) of coverage is as follows.
| Location | Annual premium, Structure A (per ¥10 million / approx. USD 63,300 of coverage) |
|---|---|
| Tokyo, Kanagawa, Chiba | ¥27,500 (approx. USD 174) |
| Saitama | ¥26,500 (approx. USD 168) |
| Osaka, Aichi | ¥11,600 (approx. USD 73) |
Even within the same Structure A classification, Tokyo's premium runs more than double Osaka's — a regional seismic-risk difference with no exact parallel in most Western property-insurance markets, where earthquake coverage is either bundled or entirely optional depending on the state or region. Discounts based on the building's seismic-isolation or earthquake-resistance performance can also apply, so your actual premium may come in lower depending on the documentation the management association (kanri kumiai) holds on file.
Note also that the fire insurance you purchase for your exclusive unit is entirely separate from the policy the building's management association carries for the common areas. As a unit owner, you insure your exclusive space and its contents, and the standard practice is to set the coverage amount based on replacement cost, not acquisition cost.
Prorated Property Tax, City-Planning Tax, and Management Fee Adjustments
The item most often overlooked at handover is the prorated adjustment. The taxpayer of record for property tax (kotei shisan-zei, 固定資産税) and city-planning tax (toshi keikaku-zei, 都市計画税) is whoever owns the property as of January 1 of that year — the seller, in most transactions. Even if the buyer takes ownership mid-year, that year's tax notice is mailed to the seller. Japanese market custom addresses this by having the buyer reimburse the seller a prorated share based on the handover date.
It's important to understand that this proration is not a statutory requirement — it is purely a market custom, and the same is true for prorating the management fee and repair reserve fund. Who owes which period, and whether the proration clock starts on January 1 or April 1, is a matter for the special-terms clause of the sale contract. Convention leans toward a January 1 start in the Kanto region and an April 1 start in Kansai, but neither is fixed by rule — read the relevant clause of your contract carefully.
In Tokyo's 23 wards, the property-tax rate is 1.4% and the city-planning tax rate is 0.3%. Residential land carries a special reduction: for small residential lots of 200 m² or less, the property-tax base drops to one-sixth and the city-planning-tax base drops to one-third. The 23 wards additionally continue a further 50% reduction on the city-planning tax owed on small residential lots through FY2026 (Reiwa 8). For our ¥30 million (approx. USD 190,000) case (land-share assessed value ¥12 million / approx. USD 75,900; building assessed value ¥6 million / approx. USD 38,000), the annual tax works out as follows.
- Property tax on the land: ¥12 million (approx. USD 75,900) ÷ 6 × 1.4% = ¥28,000 (approx. USD 177)
- City-planning tax on the land: ¥12 million (approx. USD 75,900) ÷ 3 × 0.3% = ¥12,000 (approx. USD 76) → reduced by half under the 23-ward measure to ¥6,000 (approx. USD 38)
- Property tax on the building: ¥6 million (approx. USD 38,000) × 1.4% = ¥84,000 (approx. USD 532)
- City-planning tax on the building: ¥6 million (approx. USD 38,000) × 0.3% = ¥18,000 (approx. USD 114)
- Total annual tax: ¥136,000 (approx. USD 861)
This is a simplified calculation using the standard tax base. Land assessments are also subject to a burden-adjustment mechanism based on the current burden level, so confirm the actual tax base on your property tax statement (kazei meisai-sho) rather than relying on this estimate alone. For a mid-year handover, half of the annual figure — about ¥68,000 (approx. USD 430) — becomes the prorated adjustment. Add the prorated management fee, repair reserve fund, and the following month's advance payment, and the quick-reference table earlier in this article estimates the combined figure at roughly ¥105,000 (approx. USD 665). For a detailed walkthrough of resale-condominium property tax calculations and the settlement mechanics at resale, see how to calculate resale condominium property tax and settle it at sale.
Costs After Move-In: Acquisition Tax and Ongoing Costs
Even after handover is complete, one payment still remains: real estate acquisition tax (fudōsan shutoku-zei, 不動産取得税). A tax notice from the prefecture typically arrives three to six months after acquisition, which is why this cost has a reputation for arriving "just when you'd forgotten about it." For resale condominiums, though, this often comes to ¥0 when certain conditions are met.
Real Estate Acquisition Tax Relief and a Worked Calculation
The real estate acquisition tax rate is 3% for both land and residential buildings (for acquisitions between April 1, 2008 and March 31, 2027), and 4% for non-residential buildings. Land classified for residential use has its tax base halved (through March 31, 2027).
For a resale home, the building's tax is calculated as (fixed-asset tax assessed value − deduction) × 3%. The deduction amount varies significantly depending on the building's original construction date.
| Building's original construction date | Deduction |
|---|---|
| April 1, 1997 (Heisei 9) or later | ¥12 million (approx. USD 75,900) |
| April 1, 1989 – March 31, 1997 | ¥10 million (approx. USD 63,300) |
| July 1, 1985 – March 31, 1989 | ¥4.5 million (approx. USD 28,500) |
| July 1, 1981 – June 30, 1985 | ¥4.2 million (approx. USD 26,600) |
| January 1, 1976 – June 30, 1981 | ¥3.5 million (approx. USD 22,150) |
| January 1, 1973 – December 31, 1975 | ¥2.3 million (approx. USD 14,560) |
| January 1, 1964 – December 31, 1972 | ¥1.5 million (approx. USD 9,490) |
| July 1, 1954 – December 31, 1963 | ¥1 million (approx. USD 6,330) |
The floor-area requirement was also revised. Acquisitions through March 31, 2026 required 50–240 m²; acquisitions from April 1, 2026 onward are relaxed to 40–240 m². The seismic-standard requirement is that the building was newly built on or after January 1, 1982 (Showa 57) — or, if built earlier, that it carries certified proof of meeting the "new earthquake-resistance standard" (shin-taishin kijun, 新耐震基準). You'll sometimes see this described loosely as "built from 1982 onward," but the precise cutoff is "newly built on or after January 1, 1982."
Building calculation example: a 25-year-old unit (built in 2001 / Heisei 13), 60 m² of exclusive area, with a building assessed value of ¥6 million (approx. USD 38,000). The deduction is ¥12 million (approx. USD 75,900), so ¥6 million minus ¥12 million produces a negative figure, meaning the building's acquisition tax is ¥0. Condominiums around 25 years old with roughly 60 m² of floor space very often land in exactly this position.
Land calculation example: a land-share assessed value of ¥12 million (approx. USD 75,900). Because this is residential-use land, the tax base is halved: ¥12 million × 1/2 × 3% = ¥180,000 (approx. USD 1,140) is the tax before relief. From this, subtract the residential-land reduction, whichever is greater of ¥45,000 (approx. USD 285) or "land price per m² × twice the building's floor area (capped at 200 m² per unit) × ownership share × 3%."
If the land ownership share is 20 m² and the price per m² (after the 50% base reduction) is ¥300,000 (approx. USD 1,900), the reduction works out to ¥300,000 × 120 m² × 3% = ¥1,080,000 (approx. USD 6,840) — far exceeding the ¥180,000 tax otherwise owed. So the land's acquisition tax is also ¥0. Condominium units tend to carry a small land ownership share relative to floor area, and the "twice the floor area" formula frequently exceeds that share, which is structurally why this ¥0 outcome recurs so often for condominiums specifically — a relief mechanism considerably more generous than the one-time transfer or stamp taxes many Western buyers are used to.
The reverse is also true: buildings constructed before 1981 whose assessed value exceeds the (smaller) deduction, or units under 40 m², will owe real tax. Some prefectures require an application to receive the relief, so when your tax notice arrives, confirm the relief has actually been applied at your prefectural tax office before paying the face amount. For details on how relief and refund procedures vary by prefecture, see resale condominium acquisition tax calculations and relief measures.
Average Management Fees and Repair Reserve Fund Contributions, per Square Meter
Two costs recur monthly after move-in: the management fee and the repair reserve fund contribution. According to MLIT's "FY2023 Condominium Comprehensive Survey Results," the nationwide average per-unit monthly figures were as follows.
| Item | Average, per unit per month | Note |
|---|---|---|
| Management fee (excluding amounts offset by usage fees, etc.) | ¥11,503 (approx. USD 73) | Most common bracket: over ¥10,000 up to ¥15,000, at 30.8% of respondents |
| Repair reserve fund | ¥13,054 (approx. USD 83) | Total including parking-fee offsets: ¥13,378 (approx. USD 85) |
| Combined | approx. ¥24,557 (approx. USD 155) | — |
The same survey found that 36.6% of condominiums currently hold a repair reserve fund balance that falls short of their own long-term repair plan — meaning more than one building in three is underfunded relative to its own plan. If you don't check the long-term repair plan and reserve-fund balance before purchasing, you risk a post-move-in fee increase or a special one-time assessment that upends your budget — a risk broadly analogous to underfunded HOA reserves in the US or underfunded sinking funds in UK/Australian strata schemes, though Japan's monitoring survey is unusually systematic and government-run.
So what counts as an adequate reserve? MLIT's "Guidelines on Condominium Repair Reserve Funds" (originally issued April 2011, revised June 2024) provides a benchmark average monthly unit price per square meter of exclusive floor area, covering the full length of the repair plan (excluding mechanical parking equipment).
| Building scale | Average (¥/m²/month) | Range covering two-thirds of surveyed cases | Monthly equivalent for a 60 m² unit (at the average) |
|---|---|---|---|
| Under 20 floors, under 5,000 m² total floor area | ¥335 (approx. USD 2.12) | ¥235–430 (approx. USD 1.49–2.72) | ¥20,100 (approx. USD 127) |
| Under 20 floors, 5,000–10,000 m² | ¥252 (approx. USD 1.59) | ¥170–320 (approx. USD 1.08–2.03) | ¥15,120 (approx. USD 96) |
| Under 20 floors, 10,000–20,000 m² | ¥271 (approx. USD 1.72) | ¥200–330 (approx. USD 1.27–2.09) | ¥16,260 (approx. USD 103) |
| Under 20 floors, 20,000 m² or more | ¥255 (approx. USD 1.61) | ¥190–325 (approx. USD 1.20–2.06) | ¥15,300 (approx. USD 97) |
| 20 floors or more | ¥338 (approx. USD 2.14) | ¥240–410 (approx. USD 1.52–2.59) | ¥20,280 (approx. USD 128) |
This table is simple to use: if the reserve fund contribution on a unit you're considering falls well below this per-square-meter benchmark, plan your budget assuming a future increase or a special assessment. Conversely, a contribution above the benchmark may simply mean the building is funding its plan responsibly. The deciding factor is not the raw fee level, but whether the contribution actually matches the building's long-term repair plan. We go deeper into reading repair reserve funds in typical repair reserve fund levels and how to spot future fee-increase risk.
[Worked Example] Building Up the Closing Costs on a ¥30 Million, 25-Year-Old, 60 m² Unit With a ¥24 Million Loan
Now let's assemble everything above into a single worked case. Assumptions: a resale condominium in Tokyo's 23 wards, purchase price ¥30 million (approx. USD 190,000), built in 2001/Heisei 13 (25 years old), 60 m² exclusive floor area, ¥6 million (approx. USD 38,000) cash down payment, a 35-year mortgage of ¥24 million (approx. USD 151,900), and fixed-asset tax assessed values of ¥12 million (approx. USD 75,900) for the land share and ¥6 million (approx. USD 38,000) for the building.
| Line item | Calculation | Amount |
|---|---|---|
| Brokerage commission | ¥30 million (approx. USD 190,000) × 3.3% + ¥66,000 (approx. USD 418) | ¥1,056,000 (approx. USD 6,680) |
| Stamp duty (sale contract) | Over ¥10 million, up to ¥50 million bracket, reduced rate | ¥10,000 (approx. USD 63) |
| Stamp duty (loan agreement) | Over ¥10 million, up to ¥50 million bracket, standard rate | ¥20,000 (approx. USD 127) |
| Registration tax (land transfer) | ¥12 million (approx. USD 75,900) × 1.5% | ¥180,000 (approx. USD 1,140) |
| Registration tax (building transfer) | ¥6 million (approx. USD 38,000) × 0.3% | ¥18,000 (approx. USD 114) |
| Registration tax (mortgage registration) | ¥24 million (approx. USD 151,900) × 0.1% | ¥24,000 (approx. USD 152) |
| Judicial scrivener fee | Transfer ¥56,678 (approx. USD 359) + mortgage ¥42,699 (approx. USD 270) (nationwide averages) | ¥99,377 (approx. USD 629) |
| Loan origination fee | ¥24 million (approx. USD 151,900) × 2.2% (flat-rate structure) | ¥528,000 (approx. USD 3,340) |
| Earthquake insurance (1 year) | ¥10 million (approx. USD 63,300) coverage, Structure A, Tokyo | ¥27,500 (approx. USD 174) |
| Prorated adjustment | Half of the ¥136,000 (approx. USD 861) annual property/city-planning tax + 1.5 months of management fee, etc. | approx. ¥105,000 (approx. USD 665) |
| Real estate acquisition tax | ¥0 on both building and land, under relief | ¥0 |
| Total closing costs | — | approx. ¥2,068,000 (approx. USD 13,090) |
| Ratio to purchase price | — | approx. 6.9% |
If you choose the upfront-guarantee-fee structure instead, the ¥528,000 (approx. USD 3,340) origination fee is replaced by a ¥494,736 (approx. USD 3,130) guarantee fee, bringing the total to approximately ¥2,035,000 (approx. USD 12,880). The difference is about ¥33,000 (approx. USD 209) — within the margin of rounding error for initial-cost purposes. The better basis for that decision is your expected early-repayment timeline, not this small gap.
Put together, the funding plan reads as: a ¥6 million (approx. USD 38,000) down payment plus ¥2.07 million (approx. USD 13,100) in closing costs, for roughly ¥8.07 million (approx. USD 51,100) in total cash required. If you pay for five years of fire insurance up front, add another few tens of thousands to well over ¥100,000 (roughly USD 200–USD 700) on top of that.
What You Get Back: The 2026 Mortgage Tax Deduction Changes
Closing costs are money going out. The mortgage tax deduction is money coming back. Under the Reiwa 8 (2026) tax reform, Japan's mortgage tax deduction (jūtaku rōn genzei, 住宅ローン減税 — broadly analogous to the US mortgage interest deduction, though structured as a direct tax credit rather than an itemized deduction) was extended five more years, and the borrowing cap and deduction period for higher-quality existing homes were both expanded. The floor-area requirement was also relaxed to a standard 40 m².
Borrowing Caps and Deduction Periods for Existing Homes (2026 Move-Ins)
According to materials MLIT published on December 26, 2025, the borrowing cap and deduction period for existing (resale) homes for 2026 (Reiwa 8) move-ins are as follows. The deduction rate is 0.7%, and the income requirement is total income of ¥20 million (approx. USD 126,600) or less.
| Housing category (existing homes) | Borrowing cap | Child-rearing households, etc. | Deduction period |
|---|---|---|---|
| Long-life quality housing / low-carbon housing | ¥35 million (approx. USD 221,500) | ¥45 million (approx. USD 284,800) | 13 years |
| ZEH-level energy-efficient housing | ¥35 million (approx. USD 221,500) | ¥45 million (approx. USD 284,800) | 13 years |
| Energy-efficiency-standard-compliant housing | ¥20 million (approx. USD 126,600) | ¥30 million (approx. USD 190,000) | 13 years |
| Other housing | ¥20 million (approx. USD 126,600) | — | 10 years |
The floor-area requirement is 40 m² or more, but buyers with total income over ¥10 million (approx. USD 63,300), and buyers using the child-rearing household top-up, must meet a 50 m² minimum. MLIT's published Q&A (Attachment 2) further clarifies that homes in the 40 m² range are excluded from the child-rearing top-up specifically, while still qualifying for the standard borrowing cap and deduction period tied to the home's performance grade. This revision has already been enacted through the relevant tax legislation, and MLIT's "Mortgage Tax Deduction" webpage has been updated to reflect the Reiwa 8 tax reform.
A Worked Example of the Annual Deduction, and How to Tell If You're Hitting the Cap
Returning to our worked example (¥24 million / approx. USD 151,900 loan), here is what actually comes back.
- "Other housing" category: the ¥20 million (approx. USD 126,600) borrowing cap applies, so ¥20 million × 0.7% = ¥140,000 (approx. USD 886) per year. Over a 10-year deduction period, that's a maximum of ¥1.4 million (approx. USD 8,860).
- Energy-efficiency-standard-compliant housing: the same ¥20 million cap and ¥140,000 (approx. USD 886) per year, but the deduction period stretches to 13 years, for a maximum of ¥1.82 million (approx. USD 11,520).
- Long-life quality housing / ZEH-level energy-efficient housing: with a ¥35 million (approx. USD 221,500) cap, the full ¥24 million (approx. USD 151,900) year-end balance qualifies: ¥24 million × 0.7% = ¥168,000 (approx. USD 1,060) per year, for roughly ¥2.18 million (approx. USD 13,800) over 13 years.
These maximum figures assume the year-end loan balance stays above the borrowing cap for the entire deduction period — a simplification. In reality, as you pay down principal, the year-end balance shrinks, and so does the annual deduction, year after year.
Here is the one insight worth internalizing: whether your loan exceeds ¥20 million (approx. USD 126,600) completely changes how much the home's performance grade matters. Below ¥20 million, every category produces the same annual deduction (balance × 0.7%) — the only difference is whether your deduction period is 10 or 13 years. Above ¥20 million, the gap in borrowing caps translates directly into a gap in the deduction itself.
One more constraint: the deduction is capped by your actual income tax liability (with any unused portion partially creditable against resident tax). If you owe ¥100,000 in income tax for the year, a ¥140,000 deduction entitlement on paper does not mean ¥140,000 comes back — only ¥100,000 does. Check the income-tax line on your withholding statement (源泉徴収票) before you build this deduction into your cash-flow model, to avoid an expectation gap.
Documentation Required When Buying a Home Built On or Before December 31, 1981
To qualify for the mortgage tax deduction, an existing home generally must show a registered construction date of January 1, 1982 (Showa 57) or later. Homes built earlier can still qualify if you can produce one of three certifications proving compliance with the "new earthquake-resistance standard": a Seismic Standard Compliance Certificate, an Existing Home Performance Evaluation, or proof of an existing-home defect (warranty) insurance policy.
The practical catch: this certification generally must be applied for before you take title, not after. If you discover after handover that the certification wasn't obtainable, you lose both the mortgage deduction and the registration-tax relief — with no way to retroactively fix it. If you're considering a property over 40 years old, confirming whether a Seismic Standard Compliance Certificate is obtainable should be a condition written into the sale contract itself, not an afterthought.
New-Build vs. Resale: How Do Closing Costs Actually Differ?
The common claim that "closing costs are higher for resale than new-build" comes down mainly to the brokerage commission and registration tax. Here is the line-by-line comparison.
| Line item | New-build condominium | Resale condominium |
|---|---|---|
| Brokerage commission | Not applicable if bought directly from the developer/seller | Cap of "price × 3.3% + ¥66,000 (approx. USD 418)" applies when a broker is involved |
| Registration tax (building) | Ownership preservation registration, 0.15% (reduced) | Ownership transfer registration, 0.3% (reduced) |
| Registration tax (land) | Site-use-right ownership transfer, 1.5% (reduced) | Same, 1.5% (reduced) |
| Repair reserve fund initial contribution | Sometimes required as a lump sum at handover | Generally not required (the seller's accrued reserve carries over to the management association) |
| Real estate acquisition tax (building deduction) | ¥12 million (approx. USD 75,900) for new construction | ¥1 million–¥12 million (approx. USD 6,330–75,900) depending on original construction date |
| Mortgage tax deduction | Higher borrowing caps than existing homes, scaled by performance grade | Existing homes: ¥35 million (approx. USD 221,500) or ¥20 million (approx. USD 126,600) cap |
| Average purchase funds (FY2024 survey) | New-build condominiums: ¥46.79 million (approx. USD 296,100) | Existing condominiums: ¥29.19 million (approx. USD 184,700) |
On a ¥30 million (approx. USD 190,000) property, the resale side incurs a brokerage commission of ¥1.056 million (approx. USD 6,680), and the building's registration tax runs 0.15 percentage points higher (¥9,000 / approx. USD 57, on a ¥6 million / approx. USD 38,000 assessed value). Combined, that's about ¥1.06 million (approx. USD 6,710) extra, or roughly 3.5% of the purchase price — the resale-side premium.
Yet the average purchase amount runs about ¥17.6 million (approx. USD 111,400) lower for resale than for new-build. The closing-cost gap is tiny compared to the purchase-price gap, and choosing new-build purely to save on closing costs is not, on its own, a rational basis for the decision. What we tell clients in purchase consultations is this: judge the property on management quality and repair-reserve health, not on the size of the closing-cost line item.
Five Things Worth Confirming Before You Sign, to Keep Closing Costs Down
Most closing-cost line items are fixed by statute or government notice, leaving limited room to negotiate. Even so, these five checks are worth doing before you sign.
- Confirm whether the brokerage commission is set at the cap. The notice sets a ceiling, not a floor — there is no minimum. When a firm represents both buyer and seller, the fee actually charged can vary within that ceiling. Check the fee-amount field in your brokerage agreement.
- If the floor area is in the 40 m² range, map out every system that uses the 50 m² threshold. Both registration-tax relief (via the Residential Building Certificate) and the mortgage-deduction child-rearing top-up require 50 m² or more. Below that, registration tax reverts to the standard 2.0% rate — a difference of over ¥100,000 (approx. USD 630) on a ¥30 million (approx. USD 190,000) property.
- Compare loan initial costs between the guarantee-fee and flat-rate-fee structures. If you expect to make an early repayment or refinance, the guarantee-fee structure — with its partial refund — may be the better call.
- Settle whether you need a Seismic Standard Compliance Certificate before you sign, not after. For buildings from December 31, 1981 or earlier, whether that certificate is obtainable determines whether you can claim both the mortgage deduction and the registration-tax relief. Applying after handover is too late.
- Review the long-term repair plan and reserve-fund balance directly with the management association's documents. Surveys show 36.6% of condominiums hold reserve balances short of their own plan. A post-move-in fee increase can end up outweighing your entire closing-cost budget.
If you'd like the full picture of the purchase process before diving into costs, see our companion guide on how to buy a resale condominium and what to check at each stage of the process.
Frequently Asked Questions
What percentage of the purchase price do closing costs typically run for a resale condominium?
When financed with a mortgage, closing costs typically run 6–8% of the purchase price. Our simulations in this article show approximately ¥1.47 million (approx. USD 9,300, or 7.3%) on a ¥20 million (approx. USD 126,600) property, approximately ¥2.07 million (approx. USD 13,100, or 6.9%) on ¥30 million (approx. USD 190,000), and approximately ¥3.27 million (approx. USD 20,700, or 6.5%) on ¥50 million (approx. USD 316,500). The ratio declines as price rises because stamp duty and judicial scrivener fees don't scale with price the way the brokerage commission does. Fire insurance is a separate line item not included in these figures.
What is the cap on brokerage commission, and can it be negotiated down?
For properties over ¥4 million (approx. USD 25,300), the cap is "sale price × 3.3% + ¥66,000 (approx. USD 418), tax included." On a ¥30 million (approx. USD 190,000) property, that comes to ¥1,056,000 (approx. USD 6,680). This figure follows the current government notice (MLIT Notice No. 949, dated June 21, 2024), effective July 1, 2024. Because the notice sets a ceiling rather than a fixed price, the fee actually charged can vary depending on the circumstances — but charging exactly the cap amount is entirely lawful.
Under what conditions does real estate acquisition tax come to ¥0?
For the building, tax comes to ¥0 whenever the fixed-asset tax assessed value falls below the deduction tied to the original construction date. For homes built on or after April 1, 1997, the deduction is ¥12 million (approx. USD 75,900), and a 25-year-old unit around 60 m² frequently has an assessed value below that threshold. For land, the reduction is whichever is greater of ¥45,000 (approx. USD 285) or "price per m² × twice the floor area × ownership share × 3%" — and because condominium land shares are small relative to floor area, this reduction very often exceeds the tax owed, bringing it to ¥0 as well. The floor-area requirement for acquisitions from April 1, 2026 onward is 40–240 m².
Should I choose the guarantee-fee structure or the origination-fee structure for my loan?
If you expect to make an early repayment or refinance, the upfront guarantee-fee structure is generally favorable, since the unused portion is refunded (minus a handling fee) at that point. If you plan to carry the loan to full term, prioritizing whichever product offers the lower interest rate is a reasonable approach either way. For a ¥24 million (approx. USD 151,900) loan over 35 years, initial costs run ¥494,736 (approx. USD 3,130) under the guarantee-fee structure versus ¥528,000 (approx. USD 3,340) under the 2.2% flat-rate structure — a difference of only about ¥33,000 (approx. USD 209).
Can closing costs be folded into the mortgage?
Brokerage commission, registration tax, judicial scrivener fees, and fire insurance premiums can often be folded in through a closing-cost loan or an add-on financing product. The earnest-money deposit, stamp duty, and the prorated adjustment due at handover, on the other hand, generally require cash. Folding costs in lowers your initial cash burden but raises your loan balance and loan-to-value ratio, which can affect underwriting. Confirm with your lender at the pre-approval stage exactly which line items their product allows.
How much actually comes back through the mortgage tax deduction?
For 2026 move-ins into an existing home, the deduction rate is 0.7%. On a ¥24 million (approx. USD 151,900) loan: "other housing" is capped at the ¥20 million (approx. USD 126,600) borrowing limit, yielding ¥140,000 (approx. USD 886) per year and a maximum of ¥1.4 million (approx. USD 8,860) over 10 years. Energy-efficiency-standard-compliant housing extends the deduction period to 13 years for a maximum of ¥1.82 million (approx. USD 11,520). Long-life quality housing or ZEH-level energy-efficient housing, with a ¥35 million (approx. USD 221,500) cap, yields ¥168,000 (approx. USD 1,060) per year on the full loan balance. In every case, the actual refund is capped by the income tax (and partially, resident tax) you actually owe.
Related Reading
Citations and Sources
- Ministry of Land, Infrastructure, Transport and Tourism (国土交通省, MLIT), "Amount of Compensation Real Estate Brokers May Receive for Brokering the Sale of Land or Buildings" (Notice No. 1552 of 1970, Ministry of Construction, as last revised by MLIT Notice No. 949, June 21, 2024)
- MLIT, "Building Lots and Buildings Transaction Business Act (Revision of the Brokerage Fee Notice)"
- MLIT, "Revision of the Circular 'Interpretation and Operation of the Building Lots and Buildings Transaction Business Act'" (effective July 1, 2024)
- e-Gov Japanese Law Search, "Building Lots and Buildings Transaction Business Act" (宅地建物取引業法, Article 39, Limits on Earnest-Money Amounts)
- National Tax Agency (国税庁, NTA), Tax Answer No. 7108, "Reduced Stamp-Duty Measures for Real Estate Transfer and Construction Contract Documents"
- NTA, Tax Answer No. 7140, "Stamp Duty Rate Table (Part 1): Documents No. 1 through No. 4"
- NTA, "Notice on Reduced Registration Tax Rates for Land Sales and Preservation Registration of Residential Buildings" (April 2026)
- NTA, Tax Answer No. 7191, "Registration Tax Rate Table"
- Tokyo Metropolitan Government, Bureau of Taxation, "Real Estate Acquisition Tax"
- Tokyo Metropolitan Government, Bureau of Taxation, "Property Tax and City-Planning Tax (Land and Buildings)"
- MLIT, "Necessary Measures Related to the Mortgage Tax Deduction and Other Home-Purchase Promotion Policies (Attachment 1)" (December 26, 2025)
- MLIT, "Q&A on Mortgage Tax Deduction Changes Under the FY2026 Tax Reform (Attachment 2)"
- MLIT, "Overview of the FY2026 MLIT Tax Reform" (December 2025)
- MLIT, "Mortgage Tax Deduction" (updated to reflect the FY2026 tax reform)
- East Japan Real Estate Distribution Organization (東日本不動産流通機構, Higashi-Nihon REINS), "Quarterly Market Watch Summary Report, April–June 2026" (July 17, 2026)
- MLIT, "FY2024 Housing Market Trends Survey Report" (June 2025)
- MLIT, "FY2023 Condominium Comprehensive Survey Results (Management Association Survey)"
- MLIT, "Summary of FY2023 Condominium Comprehensive Survey Results"
- MLIT, "Guidelines on Condominium Repair Reserve Funds" (originally issued April 2011, revised June 2024)
- Japan Federation of Shiho-Shoshi Lawyer's Associations (日本司法書士会連合会), "Fee Survey Results" (conducted March 2024)
- Ministry of Finance (財務省), "Standard Earthquake Insurance Rates (for policies with a start date on or after October 1, 2022)"
- Resona Bank, "Guarantee Fee (Upfront) Rate Table"
- Docomo SMTB Net Bank, "Mortgage Fees and Closing Costs"
The tax rates and caps in this article are drawn from the primary sources above, but the assessed-value ratio, insurance premiums, and prorated-adjustment figures used in the simulations are assumptions made for illustration. Actual figures will vary by property and contract terms. For decisions specific to your own tax situation, consult a licensed tax accountant (zeirishi) or your local tax office / prefectural tax office directly.
