Should you buy or rent in Japan?

Starting a new life in Japan? One of the major things to consider is the housing options. Is it better to buy or rent in Japan? What to consider before making the final decision? Buying is a big step (no matter where you want to buy a property), if you are moving to Japan and planning to stay longer, this is the option. So, what should you do? Make a list of things to consider, budget, priorities, etc.

Can you own a property in Japan as a foreigner?

When buying a house overseas, the first question to ask is – can a foreigner own a property? In this case, can you own a property without Japan citizenship?

Yes, buying is an option for you too, even if you are not a Japan citizen. There are no legal restrictions for foreigners to buy a home. But, on the other hand, buying does not entitle the purchaser to receive a residence visa in Japan.

You can get a mortgage from a Japanese bank as a foreigner too. The only concern (for them) will be are you going to stay in Japan. It is because, during the loan re-payment, you should live in Japan. It is difficult for the banks to ensure that you will make payments outside of Japan – it is kind of, their insurance.

A mortgage from a bank.
You can take a loan from a bank in Japan

What to do – buy or rent in Japan?

This depends on many different factors, mostly depends on you, on your finances, and plans for the future. If you are moving to another country from Japan in the near future, then you shouldn’t consider buying a home yet. The calculation is very personal, of course.

But, there are some facts you should consider and that will help you make the right call. If you want to stay in Japan for a longer time (more than a couple of years), then both options are on a table.

Street in Japan at night..
Research Japan real estate market and see what it has to offer

Pros and cons of buying a home

Buying the first house in Japan has good and bad sides too. It is a big step, so you should consider everything in advance. Before you buy or rent in Japan, these facts you should know.


  • Morgage will probably be less than rent in Japan because of the low-interest rate and high property yield. You will save money every month by paying a mortgage, not rent.
  • If you own a home, you can redecorate and change it as you want, there are no limits. You don’t need to ask for making changes, it is yours.
  • There are some tax benefits of owning a property in Japan.
  • If you don’t want to live in Japan anymore and want to move, you can rent your home.


  • You will have more responsibilities around the home and maintaining.
  • If you don’t love a property or a neighborhood after buying, you can lose money and time by reselling your home.
  • You will need to invest more money at the beginning.
  • More paperwork and obligations.

Pros and cons of renting a home

As we mentioned before, the decision about renting or buying a home mostly depends on you. But, if you are considering renting a home in Japan, there are some facts to investigate and calculate. Maybe buying is the right option for you, after all.


  • You are flexible and you are able to move if you don’t like neighbors, neighborhood, a home, etc.
  • Employers may pay some of the renting costs to expats, depending on the company where you work.
  • Your landlord will take care and you will be a hassle-free.
  • You are not obligated to stay in the country because of banks.


  • Rent is more expensive than a mortgage in Japan, and probably you will pay for someone else’s mortgage.
  • You can’t make changes and remodel as you want.
  • Usually, rental leases are 2-year terms, if you will live in Japan shorter than that or you need to travel a lot, you will lose money.
  • Rent may increase.

Other things to consider

What else you should consider when settling in Hong Kong? Real estate in Japan varies from the USA’s real estate.

Taking the keys after you buy or rent in Japan.
Before you take the keys, consider all factors
  • Before you buy or rent in Japan, research the real estate market in the area you want to rent/buy. Check the history, are real estate prices going up or down? Property prices in Japan often go down after purchase.
  • If you want to rent, will your employer pay rent direct from a salary?
  • What if you leave Japan and you still have to pay a loan?
  • What are real estate trends in Japan and what is your financial status/How much can you spend on buying/renting?

Transaction costs when buying a home in Japan

When buying, you will have more costs at the beginning. How much money you should spend and what is included in the transaction costs? To calculate it easier 100 USD is equal to 10,819 JPY.

  • The broker fee in Japan is 3.24% plus 64,800 yen. Both sides, a buyer and a seller have a broker.
  • Judicial scrivener fees can vary anywhere from 60,000 to 120,000 yens plus add 1.5% of the total transaction price.
  •  Stamp duty can also vary between 10,000 and 80,000 yens.
  • Acquisition tax needs to be paid within a few months of purchasing your home, and the rate is between 0.5% and 1% of the home price.
  • Annual taxes are also different, but the first year will not be that hard for you – they are 1.4% fixed assets tax plus 0.3% city planning tax.

Would you buy or rent in Japan depends on many different factors, buy two main factors are finances and for how long you will stay in Japan. Talk to a real estate agent and with your bank, and find the best solution together.

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