Buying a home is an exciting but major life decision. It’s common for buyers to assume that only the purchase price needs budgeting, but there are also other costs—like additional fees and taxes—that need to be covered in cash, as they’re often not eligible for mortgage coverage. Generally, the total of these costs runs around 3–5% of the purchase price for a new property and 5–10% for pre-owned properties. Below is a breakdown of the primary additional fees and taxes to expect.
Additional Fees
- Brokerage Fee
This fee applies when buying through a real estate company.
Standard amount: 3% of the purchase price + 60,000 yen + consumption tax
- Deposit
This payment is made as a contractual commitment. If the buyer cancels, the deposit is non-refundable, but if the seller cancels, they must return double the deposit to the buyer.
Standard amount: 5–10% of the purchase price
- Registration Fees
This covers registering ownership, which typically requires hiring a judicial scrivener. The fee includes administrative fees and registration tax.
Standard amount: around 50,000–100,000 yen
- Fire and Earthquake Insurance
For those using a mortgage, fire insurance is usually mandatory, while earthquake insurance is optional but highly recommended to protect against natural disasters.
Standard amount: Fire insurance runs about 150,000–400,000 yen (for a 10-year contract); earthquake insurance costs about 50,000–250,000 yen (for a 5-year contract)
Taxes
- Stamp Duty
Stamp duty is required for each sales contract and mortgage agreement, with the amount depending on the contract’s value. Generally, the higher the contract amount, the higher the stamp duty.
Standard amount: around 20,000–40,000 yen
- Registration and License Tax
This tax applies when filing a property registration with the Legal Affairs Bureau to ensure the legal security of ownership rights. Tax rates vary depending on the content of the registration.
Standard amount: 0.1–2% of the assessed value for tax purposes
- Real Estate Acquisition Tax
This tax is levied on all real estate acquisitions, including new and pre-owned homes, as well as for expansions or renovations. The prefecture administers this tax, with reductions available for new homes.
Standard amount: 0–3% of the assessed property value
- Fixed Asset Tax and City Planning Tax
Fixed Asset Tax and City Planning Tax are annual taxes applied to land and buildings owned as of January 1. For newly purchased properties, the amount due is calculated on a pro-rata basis from the purchase date.
Fixed Asset Tax: Fixed asset assessed value × 1.4%
City Planning Tax: Fixed asset assessed value × 0.3%
These rates may vary depending on the municipality, so it’s important to check with your local city or town office. Additionally, the assessed fixed asset values are re-evaluated by each municipality every three years.
Standard amount:
For a house: 100,000–150,000 yen per year
For a condominium: 80,000–120,000 yen per year
All these costs may seem complex, but SeaHome is here to guide you step-by-step. Our team will provide clear explanations and thorough support so that you can proceed confidently with this significant purchase. Taking the first step toward your dream home is exciting—let’s embark on it together!
