6 steps to buying
1. Define your investment criteria
Investment criteria you need to consider include short or long term, a focus on yield or capital gain, or even a second home for personal use. As well as the type and size of investment, considerations should include the level of risk and the kind of property you are interested in-commercial, retail or residential.
Hikari Homes can provide you with an overview of the market and investment environment in line with your criteria, and help refine the search for the type of building and area to suit.
2. Select a short list and make site inspection
Having defined your investment criteria, the next step is to make a shortlist of available properties that meet your needs. With the high turnover in the market, the shortlist will only remain current for 7 to 10 days. On-site inspections and familiarization will further hone the selection, and if all goes well enable you to select an appropriate property.
Hikari Homes will organize and coordinate access and on-site inspections to suit your timetable, and provide any information and assistance you need to make an informed decision.
3. Make a written offer to purchase
Once you have selected a property, it is time to make an offer to purchase. This is the first formal step in the purchase process in Japan, notifying the seller you intend to purchase if terms can be agreed. The "Offer" needs to include a price, date the offer is live until, special requests, and a note of any conditional elements such as completing finance. This is an opening bid that can be negotiated between buyer and seller.
Hikari Homes can advise and assist you in making the offer and all negotiations, and provide you clear guidance on what to expect during the process.
4. Sign a contract
Once you and the seller have agreed on the price and conditions, it is time to conclude a formal contract. Both buyer and seller need to formally state the conditions associated with the transaction, and any over-riding conditions affecting the property and transaction. Formal acceptance of the offer requires a deposit against the full cost of the purchase - typically 10% of the full purchase price. Many contracts carry a conditional clause related to finalizing financing.
Hikari Homes can assist with negotiations and organizing the formal offer, and all paper work and transactions involved.
5. Complete the purchase and ownership handover
Once finances are arranged it is time to take ownership. Prior to the final handover of the property, we confirm all conditions related to the property have been fulfilled.
For properties that are already occupied, this includes transferring rental payments to the new owner. For unoccupied properties, once you take ownership we begin a tenant search.
Taking ownership requires completing and exchanging the necessary legal documents, and paying the outstanding balance. A judicial scrivener is employed to ensure all legal processes are completed. After the scrivener receives the official certification of ownership from the local government registration office, they will check it before sending it to you. This usually takes about 3 weeks.
Hikari Homes can assist with the property check, settling of details, and organizing the necessary legal documents and transactions, and introduce a judicial scrivener.
6. Meet tax obligations
All property ownership transactions in Japan are subject to three taxes: a Stamp Duty Tax on the contract; a Registration Tax, often in two parts: land and building; and a Real Estate Acquisition Tax on the purchase of land and building that is usually paid 2-3 months after settlement. In addition, there is an annual Fixed Asset Tax and City Planning Tax on ownership of the property.
Hikari Homes can help you complete the necessary forms for registration and payment with the local tax office, streamlining the process.
For more detailed information, ask our consultant.