The Complete Guide to Understanding the Total Cost of Buying Real Estate in Central Tokyo
Why Understanding the Total Cost Matters
When purchasing real estate in Central Tokyo, understanding the total cost beyond just the property price is crucial for financial planning. In addition to the purchase price, there are several taxes, fees, and administrative costs that buyers need to be aware of.
At EM Labo, we specialize in helping non-Japanese buyers navigate the Tokyo real estate market with clarity and confidence. This guide will break down the costs you need to consider when buying property in Central Tokyo.
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What Costs Should You Expect?
When purchasing property in Tokyo, the total cost typically falls into two categories:
- For buyers using financing: Expect an additional 7-8% of the property price.
- For cash buyers: Additional costs are around 5-6% of the property price.
The exact costs can vary based on the property type, financing details, and tax regulations. Feel free to contact us for a specific estimate based on your situation.
Breakdown of Key Costs
1. Stamp Duty (印紙税 – Stamp Tax)
Stamp duty applies when signing a sales contract or mortgage contract. The amount depends on the property price and must be paid using a revenue stamp affixed to the contract.
| Property Price | Standard Stamp Duty | Reduced Rate (Valid Until March 31, 2027) |
|---|---|---|
| ¥10M – ¥50M | ¥20,000 | ¥10,000 |
| ¥50M – ¥100M | ¥60,000 | ¥30,000 |
| ¥100M – ¥500M | ¥100,000 | ¥60,000 |
2. Real Estate Agent Commission (不動産仲介手数料)
The standard brokerage fee for real estate agents in Japan is: 3% of property price +60,000 yen +10% TAX
3. Title Transfer & Mortgage Registration Fees (登記費用)
When a property is purchased, ownership needs to be legally registered. This is handled by a judicial scrivener and involves the following fees:
| Type | Estimated Cost |
|---|---|
| Title Transfer Registration (ownership change) | ~ 1.5% of land value + 0.3% of building value (varies by property type and size) |
| Mortgage Registration (if using a loan) | 0.4% of the mortgage amount (may be reduced to 0.1% for residential use) |
💡 Tip: The tax is based on the property’s assessed value (not the purchase price). This is usually lower than the market price and assessed by the government.
4. Fixed Asset Tax & City Tax (固定資産税・都市計画税)
These are annual property taxes paid by owners every year, usually in June-July.
| Tax Type | Estimated Rate |
|---|---|
| Fixed Asset Tax | ~ 1.4% of the assessed property value |
| City Planning Tax | ~ 0.3% of the assessed property value |
📌 Note: If the property is transferred mid-year, the tax is prorated between the seller and buyer based on the time of ownership.
5. Mortgage-Related Fees (ローン関連費用)
If you are financing your purchase with a loan, additional fees apply:
| Fee Type | Estimated Cost |
|---|---|
| Mortgage Loan Processing Fee | ~ 2.2% of the loan amount |
| Mortgage Loan Administration Fee | ¥30,000 – ¥50,000 |
| Mortgage Insurance Fee | Depends on loan conditions |
Loan Amount:
- Non-Permanent Residents: Banks typically lend 70-80% of the property price.
- Permanent Residents: You may qualify for loans up to 110%, covering even closing costs.
- Loan eligibility is usually 7-8 times your annual income, and monthly payments typically range 25-35% of your annual income.
Recommended Banks for Non-Japanese Buyers:
- SMBC Prestia Bank
- Shinsei Bank
- Bank of China
- SBI Bank
Each bank offers different loan terms, so we recommend consulting with us to explore your best financing options.
6. Fire & Earthquake Insurance (火災保険・地震保険)
- Fire insurance is often required by banks if you take a mortgage.
- Earthquake insurance is optional but must be bundled with fire insurance.
- Typically, insurance is purchased for 5 years at a time.
Tip: The maximum payout amount in case of damage varies, so reviewing policy details is essential.
7. Real Estate Acquisition Tax (不動産取得税)
This is a one-time tax paid after purchasing a property.
- Residential properties: Tax reductions may apply (in some cases, no tax is due).
- Non-residential properties: 4% of the assessed value.
How Much Should You Budget?
| Buyer Type | Estimated Additional Costs |
|---|---|
| Cash Buyer | 5-6% of property price |
| Mortgage Buyer | 7-8% of property price |
💡 Since costs vary by property, we encourage you to contact us for a detailed breakdown based on your specific purchase.
Conclusion – Let Us Help You Navigate the Costs!
Buying property in Central Tokyo involves various costs beyond the purchase price. Understanding taxes, fees, and financing ensures a smooth and stress-free transaction.
At EM Labo, we provide:
✔️ Personalized cost breakdowns for each property
✔️ Guidance on financing options for non-Japanese buyers
✔️ Expert negotiation support to help you get the best deal
Thinking about buying property in Tokyo？ Contact us today for a consultation!
