Own a home in Japan

Own a home in Japan at low cost through court auctions


Acquiring real estate through court auctions has become much more secure than before, thanks to improvements in legal provisions. As the hurdles went down, the competition level has risen. There are more people who engage the services of auction concierges to buy assets through court auctions.

Please use this website to understand the advantages and disadvantages, as well as risks involved, and buy your home in Japan at lower costs via court auctions.

Does it lead to troubles later on?

Court auctions, judicial foreclosures, or foreclosed properties are words carrying some negative feelings. There were cases in the past that justified them. But court auctions now are safe and open. There are still many people who know little about them. Some illegal activities were indeed associated with foreclosed properties in the past. Now the laws are clearer and better enforced. Even then, however, it is vexing and cumbersome for a buyer to directly deal with a former owner. Wisely procuring the services of real estate agents who have knowledge and experiences in court auctioins, auction concierges, can make the transaction easy and secure for you.

Auction concierge

What are the risks?


Principal risks are associated with inability to see the inside and lack of warranty for defects. Evicting illegal occupants can also be troublesome. Each obstacle must be cleared according to the laws. Ignorance can lead to bigger problems. To circumvent risks, prior researches are important; professional agents can also help. Another thing a bidder must bear in mind is that bidding does not always lead to winning; in fact only one bid wins.

Advantages of court auctions

Primarily, one may acquire an asset through court auction at lower cost than in the general real estate market. And saved fund may be applied to renovations. Also one may encounter rare assets in auctions, not generally seen in ordinary markets.

A few things to know

In Japan buildings are separate from land which buildings stand on, so they are traded and registered separately. One may only buy a house and lease the land. As this arrangement may possibly lead to untenable situations there is statutory superficies that try to remedy some difficulties, requiring the land lease in some situations where the land and the building were owned by a single entity.

It is important to register the real property and your rights with the bureau, for otherwise your right may not be enforceable against some other third-party stakeholders.

At the time of purchase, there are various expenses including for research, transaction fees, stamp duties, registration fees, judicial scrivener's fee which is usually a small percentage of the sale, the acquisition tax of about 3 to 4%, and broker's commission which may be about 3.24% of the sale plus 64,800 yen; aside from those pertaining to court auctions, such as costs of eviction. In general, the buyer pays for the expenses, while the seller mostly does not.

To maintain a property, there are also various expenditures. There are two annual taxes. Property tax is about 1.4% of the property value based on the standard value for tax purpose called Rosenka value. The urban planning tax is usually about 0.3% in Tokyo 23 wards. The rental income is also taxed. For an apartment, there are monthly service and maintenance charge and usually renovation reserve payment. And unless specifically noted, an apartment usually does not come with a parking space; and to own a vehicle you need to provide an evidence of parking space. Utilities are for power, water and sewage, and gas; may differ depending on regions. Additional costs may include those for the Internet connection, TV (in Japan, if you own a set, you have to pay a monthly fee to NHK, the public broadcasting service), and property insurance.

When selling the property, the capital gain tax may range from roughly 20 to 40%.

In Japan, apartments are called mansions; and are often translated to condominiums even if small. Often they are in steel reinforced concrete structures of several stories. There are less solid and lower structures, which Japanese call apartments to distinguish the two. All of them are listed as apartments on 981.jp.

In some older assets in rural areas, there may be toilets without seats, which can be a big problem requiring a renovation. This is usually not a problem in newer properties in urban settings; however, one may still encounter one in a public bathroom. And, in general, everything is smaller, and lower; using a wash basin can tax your back, and you may have to bend down a bit to look at yourself in the mirror, or to get in and out of a room; in large cities, at least, however, there are many Japanese men taller than six feet. And please be aware of tatami mats, which are traditionally installed on the room floors, made of straw, because they may cause an allergy to some people. Some of you may want properties that reflect the traditional Japanese culture. Others may want something closer to the Western comfort; then two key words are new and urban, even though you should remember that you can always build what you want.

More than two million expatriates live in Japan. And communities are robust. In large cities, there are schools and pre-schools taught in English; some are bilingual. In the central Tokyo, there are several supermarkets that offer international food; even though civilians in general may not have an access to U.S. military exchanges. Tokyo, for example, is a bustling center of international business, vivacious, crowded and busy, full of entertainment, restaurants, retail shops of renowned brands. Yet, within two hours on trains, one may get to the beach, or to the mountains. And there are properties available in rural locations offering outdoor and natural attractions.

Disclaimer: Information above is intended for your benefit. While FKR and the 981.jp strive to be accurate and fair, we might not be. So please consult qualified professionals.

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