Tokyo Real Estate Myths Debunked
Foreign buyers have far more access to the Tokyo property market than most people think, but a handful of stubborn misconceptions keep getting in the way. Ken Corporation and Kozue Dunn are used to hearing the same common myths on a regular basis, so their answers come with the benefit of years of precise experience. Here’s what’s actually true, from two sources for whom it’s their bread and butter.
Table of Contents
Q: Do foreigners need permanent residency to buy property in Japan?
Q: You’ll pay a lot more than just the listing price, right?
Q: Wait — buyers have to pay brokerage fees themselves? Isn’t that the seller’s job?
Q: Property assessment values in Tokyo seem shockingly low. Does that mean the property is overpriced?
Q: Can you buy a property in Tokyo without visiting Japan?
Q: What’s the document situation for foreign buyers?
Do foreigners need permanent residency to buy property in Japan?
No.
This is probably the single most repeated misconception in Tokyo real estate circles, and it has talked more than a few serious buyers out of the market entirely.
There is no legal restriction preventing non-residents or non-citizens from purchasing property in Japan. Foreigners can buy freehold real estate, including apartments, houses and land, with the same ownership rights as Japanese nationals. You don’t need a visa, a residence card or permanent residency (PR) status to complete a purchase.
Where permanent residency does matter is financing. The number of Japanese banks willing to offer mortgages to non-PR holders is smaller, and terms can be less favorable. But “limited options” is not the same as “impossible.” Buyers who can put forward around 20% to 40% as a down payment — the exact figure depends on income and the property itself — have a realistic path to financing even without permanent residency. And for non-residents who can’t access individual mortgages at all, establishing a Japanese corporation opens another route to financing entirely.
You’ll pay a lot more than just the listing price, right?
Yes.
This one isn’t a myth, it’s something buyers genuinely need to budget for. Even savvy buyers have been caught out by the amount they’ve had to pay beyond the list price. On top of the purchase price, expect to add roughly 5% to 8% in transaction costs.
That includes a brokerage fee calculated as (property price × 3% + ¥60,000) plus consumption tax, registration and license taxes on both the land and building valuation amounts, a judicial scrivener’s fee typically in the ¥100,000 to ¥150,000 range, stamp duty, real estate acquisition tax and, if you’re financing, mortgage-related costs on top.
To give a concrete example: a ¥120 million, 10-year-old, 100-square-meter condominium purchased with ¥100 million in financing would carry around ¥5.6 million in upfront purchase costs alone — before annual fixed asset and city planning taxes (roughly 1.7% combined on the assessed value) and condominium maintenance fees kick in on an ongoing basis.
None of this makes Tokyo a bad investment. But walking in without this knowledge is how buyers get caught short.
Wait — buyers have to pay brokerage fees themselves? Isn’t that the seller’s job?
Yes.
In many markets, with the United States being the clearest example, the convention has traditionally been for the seller to cover the full brokerage commission, which then gets split between both agents. Buyers often never see that cost directly.
Japan works differently. The structure here is straightforward: the seller pays a commission to their agent, and the buyer pays a commission to theirs. Both parties pay their own side.
This catches a lot of international buyers off guard. But it makes more sense once you understand the scope of what Japanese real estate agents actually do. It’s not just listings and paperwork. A good agent in Tokyo typically handles property viewings, price negotiations, mortgage coordination, contract procedures, coordination with the judicial scrivener, the property handover, communication with the building management company and often translation support throughout. The fee reflects a much more hands-on service model than buyers from some other markets are used to.
Property assessment values in Tokyo seem shockingly low. Does that mean the property is overpriced?
No.
This is one that genuinely confuses even sophisticated foreign investors, and understandably so. You pay ¥80 million for an apartment, and the official assessment value comes back well under what you paid. Something feels wrong.
Nothing is wrong. The disconnect between market price and assessed value is a structural feature of Japanese real estate, not a red flag.
A few things drive it. First, Japan has a deeply embedded cultural tendency to treat buildings as depreciating assets rather than appreciating ones. The postwar era of rapid construction left behind a “newer is better” attitude that never really faded. As a result, once a building reaches 20 to 30 years old, the assessed building value can fall close to zero, even if the property is in excellent condition and perfectly livable. The land value is what typically carries most of the weight.
Second, Japanese banks set assessed values with liquidity and resale potential as primary concerns. They’re pricing for a quick sale in a stress scenario, not for current market demand. Add in strict land-use regulations, population decline risk and natural disaster exposure, and assessed values get pushed further below market.
The practical upshot: low assessed values mean lower property taxes and lower insurance premiums, which is mostly good news for buyers. It does not mean the market is mispricing the property, and it does not mean you’ve overpaid.
Can you buy a property in Tokyo without visiting Japan?
Yes. In theory.
It’s technically possible in limited cases. Practically speaking, though, the answer is no, and most reputable agents will tell you the same thing.
The standard purchase process in Japan runs like this: property search and viewings → negotiation and formal application → contract signing with a down payment → settlement. A buyer’s physical presence is expected at viewings, at signing and at settlement. Some steps can be adapted for overseas buyers with advance notice and careful planning, but skipping too many of them carries real risk.
Remote purchases, where a client buys without an in-person inspection, do happen, but they’re strongly discouraged. Photos and listings don’t tell the whole story. Interior condition, noise levels, light, the feel of the neighborhood, minor damage not visible in marketing materials: these things matter and can’t be assessed remotely. Once a purchase application is submitted, backing out is not simple.
If timing is an issue, the answer is to plan earlier, not to skip the viewing.
What’s the document situation for foreign buyers?
It depends.
Usually, it’s more manageable than people expect, though it requires some preparation. Non-residents need a Certificate of Signature (an apostilled document verifying your identity and signature, issued by a notary in your home country) and a Proof of Address. If your home country’s equivalents don’t match the standard Japanese format, a notarized affidavit from a notary public covers the gap.
For financing applications, add tax returns or income documentation for three years and proof of identity. The specific document list can vary by bank, so confirming requirements early saves time.
One logistical note: deposits need to be wired and received before contract signing, not after. International transfers take three to seven business days and exchange rates shift — building this into your timeline from the start prevents unnecessary stress.
Tokyo’s property market has real quirks, but most of the barriers foreign buyers fear are either smaller than advertised or entirely absent. The ones that do exist — the cost structure, the financing landscape, the document requirements — are navigable with the right preparation and the right team.
