What are the most common mistakes or overlooked details when foreigners buy property in Japan for the first time?

Hello! I see you're considering buying property in Japan—that's a big deal, congratulations on taking this significant step! As someone who's been through it, I have to share some insights. Buying your first property here can be full of pitfalls, as many details differ completely from practices in China or other countries. Below, I’ve summarized key points to help you avoid common mistakes.

1. Things About "Money" — Your Budget Will Always Be Higher Than You Think

Mistake #1: Focusing Only on the Listing Price, Forgetting "Incidental Costs"

This is the most common rookie mistake! The listed price of a property—say, ¥30 million JPY—is absolutely not the final amount you’ll pay.

What it is: In Japan, beyond the property price itself, there’s a slew of additional fees collectively called "諸費用 (Shohiyō)" (Incidental Costs).
What’s included:
- Agent Commission (仲介手数料): Typically 3% of the property price + ¥60,000 + consumption tax. Paid to the real estate agent.
- Registration License Tax (登録免許税): Tax paid when transferring the property and land titles.
- Real Estate Acquisition Tax (不動産取得税): A tax bill sent by the government a few months after purchase.
- Stamp Duty (印紙税): "Stamps" affixed to contracts; cost depends on the contract value.
- Judicial Scrivener Fees (司法書士報酬): Fees for the professional handling title transfer paperwork.
- Fire/Earthquake Insurance: Mandatory if taking out a loan.
- Fixed Asset Tax / City Planning Tax (固定資産税/都市計画税): Annual holding costs. The first year’s payment is prorated and paid to the seller.
How much: Typically, these "incidental costs" add up to 6%–10% of the property price. For a ¥30 million property, expect to pay an extra ¥1.8–3 million JPY in cash.
Solution: Always ask your agent for a detailed "諸費用見積書" (Cost Estimate Sheet) upfront, listing all potential fees. This gives you a clear financial picture.

Mistake #2: Over-Optimism About Getting a Loan

Many assume stable employment in Japan guarantees easy loans, but banks set higher hurdles for foreigners.

Visa status is critical: Without "Permanent Residency" (永住権), securing a loan becomes much harder. Many banks don’t lend to non-permanent residents or require a Japanese spouse as guarantor. Some banks may offer loans but with higher interest rates or lower amounts.
Job & Income: Banks scrutinize your employer’s size, job tenure (minimum 2–3 years), and annual income. Working for a small company or having recently changed jobs makes approval difficult.
Don’t forget the down payment: Even "zero-down" loans usually require you to cover the incidental costs in cash. Buying with zero cash reserves is nearly impossible.
Solution: Conduct "事前審査" (Preliminary Screening) with multiple banks before house hunting. Know your borrowing capacity upfront to avoid disappointment later.

2. About the "Property" Itself — Seeing Isn’t Always Believing

Mistake #3: Ignoring the Difference Between "Ownership Rights" and "Leasehold Rights"

Property rights in Japan fall into two categories with huge implications.

Ownership (所有権): Congratulations—the land and building are yours. You can freely sell, renovate, or pass it to heirs. Most purchases are this type.
Leasehold (借地権): You own the building but lease the land beneath it. You pay monthly rent to the landowner. When the lease expires, you may need to demolish the building, return the land, or pay a hefty sum to renew. These properties are cheaper but come with risks and are harder to resell.
Solution: Always check the "権利" (Rights) section in property details. Ensure it states "所有権" (Ownership). Beginners should stick to Ownership.

Mistake #4: For Condos (Mansion), Focusing Only on Management Fees, Ignoring Repair Reserves

Buying a condominium (マンション) involves two monthly fees:

Management Fee (管理費): Covers daily cleaning, security, elevator maintenance, etc.
Repair Reserve Fund (修繕積立金): Savings for major future repairs (e.g., exterior renovation, waterproofing).

Most overlooked issues:

Insufficient Repair Reserves: Some older condos set this fee artificially low to attract buyers. This risks insufficient funds later, forcing sudden large assessments on owners or deferred maintenance leading to deterioration.
Future Fee Increases: This fund isn’t fixed. Well-managed buildings have a "長期修繕計画" (Long-Term Repair Plan) outlining scheduled fee hikes.

Solution: Always request the condo’s "長期修繕計画書" (Long-Term Repair Plan) and "重要事項調査報告書" (Critical Facts Investigation Report). Review the repair schedule and current reserve fund balance.

Mistake #5: Underestimating the Lifespan and Maintenance of Wooden Houses

Many detached houses (一戸建て) are wooden. While well-built, they aren’t permanent.

Rapid Depreciation: Japanese properties, especially wooden structures, depreciate quickly. The building itself may be nearly worthless after 20–30 years; the land retains value.
Maintenance Costs: Wooden houses typically need exterior and roof repainting/waterproofing every 10–15 years—a significant expense (often exceeding ¥1 million JPY).
Solution: When buying a used wooden house, scrutinize the "リフォーム履歴" (Renovation History). Recent major maintenance by the previous owner saves you money. If untouched for over a decade, factor in imminent repair costs.

3. About "Process and Culture" — The Devil’s in the Details

Mistake #6: Not Understanding or Downplaying the "Important Matters Explanation"

Before signing, a licensed "Takken-shi" (宅建士) will spend 1–2 hours explaining the "重要事項説明書" (Important Matters Explanation) document.

What it is: This critical document details everything material about the property—good and bad. Examples: history of incidents (suicide, fire), legal land restrictions (e.g., renovation limits), nearby nuisances (landfills, cemeteries).
Why mistakes happen: Packed with jargon and legal terms, delivered rapidly in Japanese. Many foreigners glaze over, trusting the agent and signing blindly.
Solution:
1. Get a copy early: Ask for the document days beforehand. Use translation tools to review and flag unclear points.
2. Bring a translator: If your Japanese isn’t fluent, bring a knowledgeable friend or hire a professional translator for the explanation session.
3. Ask questions relentlessly: Interrupt and ask! "What does this mean?" "How does this affect me?" Don’t hesitate—this concerns your multi-million yen investment.

Mistake #7: Overlooking Neighbor Relations & Community Rules

Japan is a harmony-focused society. Neighbor relations and community rules matter more than you might think.

Garbage Sorting: Fundamental. Wrong timing or category can prompt complaints. Rules vary by district.
Noise: Soundproofing is often poor. Noisy activities (children running, loud talking, vacuuming) at night can upset neighbors.
Neighborhood Association (町内会): Many areas have a "Chōnaikai" requiring fees, participation in events, or even serving as a block leader. While not mandatory, non-participation might label you as "uncooperative."
Solution: Visit the area both during the day and at night. Observe the atmosphere and check notice boards for complaints or rules. Ask the agent about resident demographics (e.g., many elderly families vs. young families).

Final Summary:

Don’t rush into buying property in Japan. Look extensively, ask questions, and learn thoroughly. Finding a reliable, patient agent who explains things clearly is crucial. Crunch the numbers, research the property deeply, and understand the contract fully.

While the process is complex, the sense of achievement when you unlock the door to your chosen home is unparalleled. Best of luck!