How to Buy Investment Property in Japan as a Foreigner

1. Ownership — no restrictions

Non-residents can own freehold land and buildings in Japan the same as a Japanese national. There are no purchase quotas, no forced JV structures, no golden-visa requirements. Reporting obligations exist (foreign-exchange law notifications for large transactions) but they are procedural, not gates.

2. The 6-step process

1. Underwriting. Model yield, DSCR, tax and exit before you ever contact an agent. Overseas buyers waste months on deals that never made lender math.
2. Purchase offer (買付証明書). Non-binding. Submitted through a licensed agent (宅地建物取引士).
3. Important-matters explanation (重要事項説明). Legally required disclosure session, in Japanese. Bring a bilingual professional; some agencies (Housing Japan, Plaza Homes, Real Estate Japan) run it in English.
4. Purchase & sale contract (売買契約). Deposit of 10% typically. Contract is bilingual only if you arrange it.
5. Loan drawdown & remittance. If financing, this is where most foreign deals slow down. See §3.
6. Closing & registration (決済・登記). A judicial scrivener (司法書士) files the title transfer on the same day funds move.

3. Financing as a non-resident

Domestic Japanese banks generally require Japanese residency. Practical options:

• SMBC Trust (Prestia): lends to select non-residents. Rate ~2.5–4.5%. LTV 50–70%.
• SBJ Bank: Korean-owned, actively lends to non-residents in Asia. Similar terms.
• ORIX Bank: investment-property specialist. Selective on non-residents.
• Overseas-branch of your home bank: HSBC Premier, DBS Treasures, Bank of Singapore lend against Japan collateral on a private-banking basis.
• All-cash. The most common path under ¥100M — cleaner and faster.

Your DSCR math is stricter than a resident's because rates are higher and terms are shorter. See DSCR for Japanese property loans.

4. Remittance & FX

Wire yen directly rather than USD/SGD/HKD into a Japanese account — the agent's bank will often quote worse than a specialist FX broker (Wise, OFX, Convera). For deals above ¥30M, get 2–3 FX quotes; the spread difference can be 30–80 bps.

You'll need a Japanese yen account to receive rent. SMBC Trust, Shinsei and Sony Bank open accounts for non-residents; some require an in-person visit.

5. Ongoing tax & compliance

• Withholding tax: 20.42% on gross rent, withheld by the tenant (if corporate) or the PM company. See the non-resident tax guide.
• Annual tax return (確定申告): due March 15 the following year. You claim back excess withholding against actual expenses and depreciation.
• Tax representative (納税管理人): non-residents must appoint one — usually the PM company or a Japanese tax accountant (¥5,000–¥15,000/month).
• Property tax: billed to your Japan address every June; the PM company typically handles payment.

6. Common mistakes

• Buying based on advertised gross yield without pricing in the ~7–10% acquisition costs.
• Using an agent that doesn't work with non-residents — expect “we cannot help you” from smaller offices.
• Ignoring the ¥100M consumption-tax threshold on commercial property.
• Assuming your home country's tax treaty exempts Japanese rental income. It usually doesn't — treaties eliminate double taxation, not Japanese tax.