【Basic knowledge of real estate Vol.3】 What are the costs of purchasing real estate in Japan?
- Japanese real estate expertise
The cost of purchasing real estate in Japan is not limited to the selling price of apartment.
When purchasing real estate in Japan, the following "miscellaneous expenses" are generally required.
・Brokerage (Intermediary) Fee
When purchasing a secondhand apartment, there is a real estate company between the Seller and the Buyer who brokers the apartment.
In this case, the Buyer is required to pay a statutory fee (brokerage fee) to the brokerage company.
This fee is applied when the selling price is over JPY 4 million
It has been decided that "Selling price x 3% + JPY 60,000 + Consumption tax ".
If the real estate company sells new apartments as a seller, this brokerage fee will not be charged.
Stamp duty must be levied by placing a revenue stamp on the "Sales and Purchase Agreement" for the purchase of land, houses, apartments, etc.
The Stamp duty which the Buyer is also responsible for, will be paid equally to the Seller.
As of May 2020, if you purchase an apartment priced between more than JPY 10 million and JPY 50 million or less, the Stamp duty of JPY 20,000 (JPY 10,000 under the current reduced tax rate) on one sales agreement is levied.
<National Tax Agency website>
In order to change the ownership of the purchased apartment to your own, it is necessary to register the real estate. In this case, the costs related to the registration will be charged.
Generally, "Registration License Tax and compensation for judicial scrivener" is the registration fee, and the amount varies depending on the type of registration.
Registration includes "registering ownership" and "registering mortgage".
・Financial Institution Fee
I think that there are many people who use a mortgage from a financial institution when buying an apartment.
In that case, you will need to pay the bank's administrative fee for the mortgage procedure.
・Non-life Insurance Premium
If you purchase an apartment, you can have damage insurance against fire or earthquake.
Although it is an optional subscription, in most cases when you purchase an apartment by using a mortgage from a bank, etc., you will need to purchase insurance as a financing condition of the financial institution.
CLEARTH LIFE recommends that you have insurance when you purchase an apartment, just in case.
・Fixed Asset Tax and Property Acquisition Tax
When you purchase an apartment, taxes are levied on the owner of the apartment.
Typical examples include "Fixed Asset Tax" and "Property Acquisition Tax".
Fixed Asset Tax is levied on the owner as of 1st January of the year for one year.
Regarding the Fixed Asset Tax after the apartment is handed over to the Buyer, there are many cases where the Buyer pays the Seller on a prorated basis.
Also, regarding the Property Acquisition Tax, a tax notification will be delivered several months after the actual acquisition of the apartment, so its need to be paid. It is necessary to estimate it separately from the miscellaneous expenses at the time of purchase.
・Sinking Fund and Management Fund
In addition to the costs mentioned above, there are other necessary costs.
This is a fund for repairs and operation management that you pay when you purchase an apartment.
In general, you need to pay a sinking fee or management fee as a monthly fee.
Apart from that, when purchasing a new apartment in Japan, it is almost the case that all owners (buyers) start to make a fund as a sinking fund or management fund.
These are calculated from the "Long-Term Repair Plan" formulated based on the repair plan, and is important for the future when the repair work of exterior walls and common area is required.
In some cases, in order to reduce the burden at the time of purchase, there are cases where the amount of money collected as a fund is small or there is no fund.
It is necessary to pay close attention to the fact that the low cost of purchasing an apartment may cause an increase in expenses after the apartment is owned.
As described above, when purchasing an apartment, apart from the selling price, various expenses are incurred.
In particular, expenses for repairs and operation management are necessary to maintain the value of apartment and secure tenant.
It can be said that an apartment that requires less initial investment and is easier to buy requires a more thorough preliminary investigation .
CLEARTH LIFE introduces multilingual registration, insurance and tax specialists to everyone who owns our own apartments brand "CONCIERIA".
Please be assured that we also provide full support when purchasing or holding our apartments.
If you have any questions, please feel free to contact us.
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