Buying a House in Japan as a Foreigner: What UK Buyers Need to Know

For British buyers priced out of London or seeking lifestyle diversification abroad, Japan is increasingly entering the conversation.

The surprise? Foreigners face no legal restrictions on buying property in Japan. You don’t need residency. You don’t need citizenship. You don’t even need to live there.

In a region where many countries limit or prohibit foreign land ownership, Japan stands out for its openness—and for UK buyers watching currency shifts and global property trends, that accessibility is compelling.

But buying a house in Japan as a foreigner works differently from buying in the UK. From how property values behave to how mortgages are approved, understanding those differences is essential before making a move.

Can Foreigners Buy Property in Japan?

Yes—outright and in full freehold ownership.

Japan does not impose nationality-based restrictions on real estate purchases. A foreign buyer can own both land and a building with the same rights as a Japanese citizen. There is no equivalent to the UK’s leasehold-heavy structure; ownership is typically freehold.

However, property ownership does not grant residency rights. If you plan to live in Japan long-term, you will still need a valid visa through employment, business, marriage, or another qualifying category.

How Japan’s Property Market Differs from the UK

Before viewing listings, it helps to understand a fundamental difference:

Buildings Depreciate

In the UK, houses are often long-term appreciating assets. In Japan, the structure itself is typically treated as a depreciating asset, while the land holds value.

Because of earthquake risk and evolving building codes, newer homes are often preferred. Properties built after 1981 (when major seismic standards changed)—and especially after 2000—are generally viewed as more desirable.

The result? You may find detached homes at prices that seem remarkably low compared to British equivalents, particularly outside central Tokyo.

Stable, Not Speculative

Japan’s market is considered stable rather than speculative. You won’t typically see dramatic boom-and-bust cycles like parts of the UK experienced pre- and post-2008. Appreciation tends to be modest, location-dependent, and strongest in central urban districts.

The Buying Process: Step by Step

The Japanese property transaction process is structured, transparent, and surprisingly efficient.

1. Work With a Bilingual Agent

Most property documentation is in Japanese. A bilingual agent experienced in cross-border transactions is essential for overseas buyers. Agencies familiar with international clients can explain property classifications, zoning rules, and terminology such as “3LDK” (three bedrooms plus living, dining, and kitchen).

2. Secure Financing (If Needed)

This is where foreign buyers encounter the most friction.

Japanese banks typically require:

• Permanent residency or long-term work visa

• Proof of income in Japan

• Strong credit history

Non-residents often purchase in cash or explore financing through international banks. Interest rates in Japan remain comparatively low by global standards, but eligibility is the primary hurdle.

3. Make an Offer and Sign the Agreement

After submitting an offer and agreeing on a price, the buyer signs a purchase contract and pays a deposit (often 5–10%).

Japan’s disclosure requirements are thorough. Sellers must provide detailed property information, and transactions are generally considered transparent.

4. Final Settlement and Registration

Ownership transfer is completed at the Legal Affairs Bureau. Identity verification is required, and buyers may use either a registered seal (inkan) or notarised signature authentication.

From offer acceptance to completion, transactions can move more quickly than in the UK—often within one to two months.

What Does It Cost Beyond the Purchase Price?

Transaction costs in Japan are typically lower than those in many UK property purchases.

Expect approximately 6–10% of the purchase price in additional costs, including:

• Agent commission (around 3% + tax)

• Real estate acquisition tax

• Registration and legal fees

• Annual fixed asset (property) tax

There is no equivalent to the UK’s progressive stamp duty tiers, though acquisition taxes do apply based on assessed value.

If purchasing an older property—particularly in rural areas—renovation costs can be high and should not be underestimated.

Where Are UK Buyers Looking?

Tokyo

Prime wards such as Minato, Shibuya, and Setagaya remain the most liquid markets. Rental demand is stable, and yields typically range between 3–5% depending on property type and location.

Osaka and Kyoto

The Kansai region offers lower entry pricing than Tokyo while still providing urban infrastructure and international appeal.

Rural Japan and “Akiya”

Japan’s demographic shift has resulted in vacant homes, known as akiya, in regional areas. Some municipalities offer properties at extremely low prices to attract new residents.

However, buyers should carefully evaluate:

• Infrastructure access

• Renovation requirements

• Long-term resale liquidity

An inexpensive purchase price does not always mean a low total investment.

Tax Considerations for UK Buyers

If you are UK-based, you may have reporting obligations on overseas property and rental income.

In Japan:

• The annual property tax is payable locally.

• Capital gains tax applies if you sell.

• Inheritance tax rules can be complex and should be reviewed carefully.

Consult both a UK and a Japanese tax adviser to ensure compliance in both jurisdictions.

Is Buying in Japan a Good Investment?

It depends on your objective.

If you are seeking rapid capital appreciation similar to high-growth UK property cycles, Japan may not deliver that profile consistently.

However, Japan offers:

• A stable, transparent legal system

• Low corruption risk

• Strong tenant protections and structured rental systems

• Global city exposure (Tokyo remains one of the world’s largest metropolitan economies)

• Currency diversification for sterling-based investors

For many British buyers, the appeal is a blend of lifestyle, portfolio diversification, and long-term stability rather than pure speculative return.

Frequently Asked Questions

Can I buy a house in Japan without living there?

Yes. There are no residency requirements for foreign ownership. You can purchase from abroad, though practical logistics are easier with local representation.

Do I need a visa to buy property in Japan?

No. Property ownership and visa status are separate. Owning a home does not grant residency rights.

Is it hard to get a mortgage as a foreigner?

If you are not a resident of Japan, obtaining financing from a Japanese bank can be difficult. Permanent residents and long-term visa holders have better access to domestic mortgage products.

Are houses in Japan really cheap?

Compared to London or the South East of England, prices can appear low—especially outside central Tokyo. However, location, building age, and land value significantly affect pricing.

What about earthquake risk?

Japan has strict seismic building standards. Properties built after 1981—and particularly after 2000—are generally aligned with modern earthquake codes. Buyers should always confirm structural compliance.

Are there restrictions on land ownership?

No, foreign buyers can own land and buildings outright with a freehold title.

Final Thoughts

Before you decide to buy a house in Japan as a foreigner, it’s important to understand how the market differs from the UK. The key differences lie not in ownership rights, but in financing access, market psychology, and how Japanese real estate values behave over time.

For British buyers seeking geographic diversification, lifestyle opportunities, or exposure to one of the world’s most established property markets, Japan represents a compelling — and often overlooked — option.

As with any international purchase, careful due diligence, bilingual professional guidance, and coordinated tax planning are essential. If you plan to relocate, organisations such as the Intercultural Association of Japan (ICAJ) can also provide valuable support for foreign residents adjusting to life in Japan. With the right preparation, owning property in Japan is not only possible — it is increasingly practical.