How to Buy a property in Japan
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The legal process of buying and selling a property is called conveyance. We understand that buying a property in Japan can be stressful, especially if you are not completely clear about what purchasing a property entails. It’s therefore wise to establish contact with a professional before you start looking for a property to avoid having to make this important decision in a rush. Our expert team is on hand and our mission is to take care of all legal aspects of moving conveyance.
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Real property in Japan and Highly-Skilled Foreign Professionals
Effectiveness of property registration in Japan https://akikohorishihoshosilawyer.wordpress.com/2021/08/02/effectiveness-of-property-registration-in-japan/
The Dual Agency system in Japan https://akikohorishihoshosilawyer.wordpress.com/2021/08/09/the-dual-agency-system-in-japan/
The official record of real property and corporate registry and Japanese culture.
How can I check and confirm rights relating to a particular land or building?
Types of Property rights. “Fixed Term Land Lease Right” (事業用定期借地権)https://akikohorishihoshosilawyer.wordpress.com/2021/04/12/types-of-property-rights-fixed-term-land-lease-right-%e4%ba%8b%e6%a5%ad%e7%94%a8%e5%ae%9a%e6%9c%9f%e5%80%9f%e5%9c%b0%e6%a8%a9/
Purchase price by the recorded dimensions and by the determined boundary dimensions
Proof of identity in Japan: Proof of address and a seal certificate as a proof of agreement
Can a non-Japanese person or non-Japanese entity buy a property in Japan?
The Real Property Registration System in Japan
In Japan, Civil law Article 86 says that “Land and any fixtures thereto are regarded as real property.” A fixture usually refers to a building. Also, Land and a building are each regarded as separate and independent pieces of real property.
A conveyance of real property by purchase must be recorded in writing to be legally valid and so that ownership can be asserted against persons other than the seller. Property registration is made at the local Legal Affairs Bureau by submitting the necessary application form and attachments to prove a conveyance of real property. Shihoshosi lawyers are responsible for preparing documents related to the registration of real property rights, such as ownership transfer and mortgage.
Flowchart for buying a property in Japan
1. Using a Shihoshosi lawyer to buy a property
If you’re considering buying a house, there’s much to think about. Aside from personal considerations, such as what type of property you’d like to purchase and in which location, it’s a good idea to select your estate agent and Shihoshosi lawyer and arrange your mortgage (if necessary) early on.
Acting in a timely manner is likely to save you a great deal of energy and ensure your transaction goes as smoothly and efficiently as possible.
2. Steps buying a property
Step 1 : Making an offer
The intending purchaser conducts his own due diligence, including whether the price is fair and sends a Letter of Intent as part of the negotiation of price
Step 2 : Drawing up a legal contract to transfer ownership
Once the price and any other conditions are agreed, a Real Estate Purchase and Sales Agreement and an Important Disclosure Statement for the property will be prepared by the estate agent.
Broadly speaking, the buyer should arrange to have the deposit 10% of the purchase price ready for when the contract is signed.
The contract contains details about:
・the sale price
・the property boundaries
・any legal restrictions or rights, like public footpaths or rules about using the property
・any planning restrictions
・services to the property, like drainage and gas
・when the sale will complete
The buyer and seller (or authorised agents) sign the contract, which will specify a date for settlement of the balance of payment.
On the Settlement date, the impartial shihoshoshi lawyer deals with the property rights transfer and the outstanding balance of the purchase price (and any costs) is settled.
The seller will also hand over various original documents related to the property.
3. Preparation for an application form
Some documents relating to conveyance are needed with the application for registration of transfer of ownership, (Purchase and sale agreement or a document in which the seller confirms details of the conveyance such as buyers, date and time, the contents of the property.), seller’s Seal certificate (within three months from verification), Registration certificate and buyer’s copy of the certificate of residence.
4. Submission of application form to the Legal Affairs Bureau
5. Examination at the Legal Affairs Bureau
6. Registration is completed
A registration certificate and registration completion certificate are issued by the local Legal Affairs Bureau.
The information recorded on a title is legally assumed to be correct and is the best evidence of ownership in Japan. However, registering a transfer does not guarantee ownership of the real property registered, in the cases of valid but unrecorded rights. Equally, it is only in very exceptional cases, and these are defined in law, that an unrecorded or unregistered property right can be asserted against a registered owner. In some cases, where property rights were not recorded because someone acted in breach of trust or in bad faith, or failed in their duty to apply to record a transfer or who obstructed it, the courts will recognise and protect those unrecorded rights.
Advantages and Disadvantage of Real Estate Investment in JAPAN
Q&A How to buy a property in Japan
Q1 Can a non-Japanese person or non-Japanese entity buy a property in Japan?
A1 Yes. When buying a property in Japan, there is no limitation about nationality.
Q2 Is there a time limit on owning a property after purchase?
A2 No. You can own a property permanently until you convey the property to someone else.
You can have a right of the ownership of Japanese property. There is no time limit to keeping ownership of the property.
You can also rent an office and a land. However, there is a time limit to the lease which depends on your contract.
When you have permanent ownership of a property your individual name, you are recommended to consider the legal provisions on inheritance.
Q3 How can I check and confirm rights relating to a particular land or building?
A3 You can investigate property details by obtaining the certificate of registration for the property at the Legal Affairs Bureau. The certificate can be issued quickly, about 10-20 minutes after submission of the application form, and the fee is ¥600. The certificate is issued only in Japanese, unfortunately not in English.
The certificate of the registration (Registration History) includes details of the owner, mortgage and leasehold rights. The certificate of the registration (Registration History) describes previous transactions, such as the past owner, who conveyed the property to the present owner, the reason for the conveyance, such as purchase-and-sale, donation or inheritance. In Japan, an escrow service can be provided by the nation.
Q4 How can I register my ownership of the property (Transfer of Ownership Registration) after conveyance?
A4 You can register your ownership by submitting application forms to the Legal Affairs Bureau. Examination at the Legal Affairs Bureau will take one or two weeks after submission. After the procedures of the registration are completed, you can obtain the certificate of your ownership. Anyone can take the certificate by paying a ¥600 fee.
You should attach to the application form: the certificate that the seller creates, the seller’s stamp certificate, the Registration Settled Certificate (the proof of the ownership that can only be issued for the owner and it is never issued at a second time.) and your Residential Certificate. This very strict procedure ensures the security of the property transaction.
The procedures for property registration are very strict and difficult to understand for most people, so that a national qualified professional, Shihoshoshi Lawyer conducts the registration procedures.
Q5 What are the benefits when a Shihoshoshi Lawyer deals with the process of registering the transference of property ownership?
A5 There are many benefits in asking a Shihoshoshi Lawyer to conduct the procedure for registering the transference of property ownership.
– Review of the Purchase and Sale agreement
– The smooth transference of Property Ownership Registration
– An explanation of the taxation of the property
– Introduction to a tax consultant about the tax declaration of the property
– To conduct the legal procedures relating to the future inheritance of the property and preparation of any necessary inheritance countermeasures.