Tokyo Property Costs, Taxes & Closing Fees for U.S. Buyers for U.S. Buyers

What up-front closing costs actually include closing costs

Up-front transaction costs in Japan typically run about 6–8% of the purchase price for a resale apartment, paid around the time of contract and settlement. The exact percentage is higher on lower-priced properties (fixed fees weigh more) and lower on larger ones. New-build purchases direct from a developer can differ because brokerage commission may not apply.

Below is what makes up that 6–8%. Every figure here is a framework — your engagement letter and the brokerage partner's settlement statement will show the exact yen amounts for your property.

• Brokerage commission — Japan's statutory cap for properties above ¥4,000,000 is 3% of the price + ¥60,000, plus 10% consumption tax on that fee. For example, on a ¥50,000,000 purchase the cap is (3% × ¥50,000,000) + ¥60,000 = ¥1,560,000, and adding 10% consumption tax gives ¥1,716,000. This commission is paid to the licensed brokerage, not to Tokyo Property Desk.
• Registration & license tax (登録免許税 / tōroku menkyo zei) — a national tax paid to record the transfer of ownership and any mortgage in the property register. The rate is applied to the property's assessed value, which is usually well below the market price.
• Judicial scrivener fee (司法書士 / shihō shoshi) — a licensed scrivener verifies title, prepares the registration filings, and lodges them on settlement day. You pay their professional fee plus the registration & license tax they remit on your behalf.
• Real estate acquisition tax (不動産取得税 / fudōsan shutoku zei) — a one-time prefectural tax assessed on the property's assessed value and billed by Tokyo Metropolitan Government some months after purchase. Reductions and exemptions can apply, particularly for certain residential land and buildings.
• Stamp duty (印紙税 / inshi zei) — a national stamp tax affixed to the physical sale-and-purchase contract; the amount is tiered by the contract price (commonly in the low tens of thousands of yen for typical apartment prices, with temporary reduced rates that change over time).
• Fire and earthquake insurance — buildings insurance is effectively required, and earthquake cover is bought as a rider. Premiums vary with the building's age, structure, size, and the term you prepay.

Annual ongoing costs once you own ongoing costs

Holding costs in Tokyo are generally modest compared with many U.S. markets, but they recur every year for as long as you own.

• Fixed-asset tax and city-planning tax (固定資産税・都市計画税 / kotei shisan zei・toshi keikaku zei) — billed together by the municipality, these combined property taxes typically come to about 1–2% of the property's assessed value per year. The key point for U.S. buyers: the assessed value used for tax is usually meaningfully lower than what you paid on the open market, so the effective rate against your purchase price is lower than 1–2%. Residential land and small-unit reductions can lower the bill further.
• Building management fee (管理費 / kanrihi) — a monthly charge paid to the building's management association for cleaning, shared utilities, the front desk, and day-to-day upkeep of common areas.
• Repair reserve fund (修繕積立金 / shūzen tsumitatekin) — a monthly contribution to the building's long-term reserve for large periodic works such as exterior repainting, waterproofing, and elevator replacement. It tends to rise as a building ages, so check the building's repair plan and reserve balance before buying.
• Property management for absentee owners — if you will not live in the unit, budget for a local manager to handle tenants, inspections, bills, and tax correspondence on your behalf.

Financing costs, if you use a loan Financing costs

Many overseas buyers purchase in cash, because mortgage financing from Japanese banks is limited for non-residents and usually depends on residency status, Japanese income, or an existing banking relationship. If financing is available to you, it adds its own costs to the budget.

• Loan arrangement and administration fees charged by the lender, sometimes a flat amount and sometimes a percentage of the loan.
• Additional registration & license tax to record the mortgage (抵当権 / teitōken) against the property.
• Group credit life insurance (団体信用生命保険 / dantai shin'yō seimei hoken), which many Japanese lenders require.
• Currency exposure on a yen loan if your income is in U.S. dollars — repayments are owed in yen regardless of the exchange rate.

U.S.-side considerations and currency U.S.-side considerations

Owning property abroad can trigger U.S. reporting obligations that have nothing to do with Japan. The items below are flags to raise with a qualified cross-border tax professional — they are not advice, and your facts determine what actually applies.

We coordinate the Japan side and can work alongside the U.S. advisor you choose, but Tokyo Property Desk does not provide U.S. tax or legal advice.

• FBAR (FinCEN Form 114) — U.S. persons generally must report foreign financial accounts when the aggregate balance exceeds the reporting threshold at any point in the year. A Japanese bank account opened to fund a purchase or collect rent can fall within scope.
• FATCA (Form 8938) — separate from the FBAR, this may require reporting specified foreign financial assets above certain thresholds on your U.S. return.
• PFIC exposure — if you hold Japanese real estate through a fund or pooled entity rather than directly, passive foreign investment company rules can create complex U.S. tax treatment. Direct personal ownership of an apartment is a different situation. Ask your advisor before structuring through any entity.
• Rental income and gains — rental income and any future sale gain may be taxable in both Japan and the U.S., with foreign tax credits and the U.S.–Japan tax treaty relevant to avoiding double taxation. A cross-border accountant should model this for your situation.
• Currency and remittance (FX) — moving dollars into yen to settle a purchase exposes you to the exchange rate, and large international transfers can carry bank spreads and fees. Plan the timing and route of remittance with your bank, and keep records of the rate used for later tax reporting.

Freehold vs. leasehold and how it affects cost Freehold vs. leasehold

Most Tokyo apartments are sold freehold (所有権 / shoyūken), meaning you own the unit and a share of the land outright. Some are leasehold (借地権 / shakuchiken), where you own the building interest but lease the underlying land.

Leasehold units often carry a lower purchase price but add an ongoing ground rent (地代 / jidai) and may involve consent fees when you sell, renovate, or renew. Confirm the tenure type early, because it changes both your up-front budget and your recurring costs. Our brokerage partner and the judicial scrivener verify tenure as part of due diligence.