JandK 0 Posted January 22, 2012 Share Posted January 22, 2012 Hi All, I am looking for some 'words of wisdom' from those of you with experience in this area. I would like to buy land and build a place, or buy an existing place in Furano, but know nothing about the hidden traps involved. It is obviously ok for foreigners to purchase property in Japan, but what are the legal requirements? Is financing available for foreigners? Do i have to put up the full amount? How about TAX? If I rent out the place while not using it myself, there must be extra considerations? (like insurance etc...) Thank you for your help. Cheers - JandK Link to post Share on other sites
seemore 66 Posted January 22, 2012 Share Posted January 22, 2012 Hi Jandk I looked into building which is very expensive compared to Australia I downloaded a PDF guide called whixh you can google or I can send it to you if you PM (Private Message) me. Japanese Real Estate A legal guide for foreign investors Seemore All the other info I got from local realestate vendors through different websites 1 Link to post Share on other sites
Go Native 70 Posted January 22, 2012 Share Posted January 22, 2012 Financing is not available to foreigners unles you have permanent residency. If you have equity in an existing property you may be able to borrow against it to purchase a property in Japan from a local bank. It will depend on the bank. Otherwise you'll need to put up the full amount. Finding a block to build on shouldn't be too difficult and not overly expensive but building in Hokkaido is reasonbly expensive. Especially if you are looking to build something more western rather than a run of the mill Japanese house. Buying an existing house will be much less hassle but it might be pretty dificult to find one to your tastes (depending on what they are). If building, unless you speak Japanese, you'll probably need an intermediary between the builders and yourself. Even if you have good Japanese unless you're there the whole time you would probably want someone you can trust to project manage the build. One of the big considerations when designing a building in a place like Hokkaido is where will the snow shed off the roof. Residential blocks are often quite small even in rural areas and you can't have your roof shedding onto your neighbours land. If it sheds onto your land beside the house you have to consider who will clear the snow so it doesn't build up too much against the house. It's one of the reasons, much to many people's surprise, so many houses in Hokkaido are flat roofed. If the roof doesn't shed snow though you'll then have to organise for it to be cleared periodically. You do have to pay tax on the council evaluation of the property. Their evaluations are often significantly less than the market value so the tax shouldn't be too much. Depending on whether or not the road you are on is considered private of public will depend on whether you'll have to put in money for a private snowclearing contractor in winter (shared with other residents on the road). If you rent the place out of course you'll need insurace and will pay tax on the rental income. You would need to have a local real estate management company look after most of that for you. They should be able to take care of all the tax and snowclearing issues as well. 1 Link to post Share on other sites
norcal 5 Posted January 22, 2012 Share Posted January 22, 2012 Good thread. I'd also like to know about this topic, as I may get into it myself. Some interest (for me), but the opportunity/option is there. Link to post Share on other sites
panhead_pete 27 Posted January 22, 2012 Share Posted January 22, 2012 Looked into this in detail last year - purchasing is simple, building relatively expensive hence my thoughts along using shipping containers as building blocks. Real Estate agents can act VERY differently in Japan then Aus including buying properties then reselling them. This happens quite often from what I can see. I had found a block, agreed to pay the price mentioned but when it came to contracts it had gone up 20% or thereabouts. I walked away on principal. Another agent had tried to sell me the same block earlier for 100% more than the asking price so do your research and make sure you go and inspect anything you buy. Have a long hard think about how much you'll need to invest initially then in maintanence as the climate has approx 50 degree variance so costs are much higher than in Aus. It may be LOTS cheaper to stay somewhere on holidays then paying the cost of the up front $ - approx 7% now and then the ongoing with little or no proposect of capital growth. 1 Link to post Share on other sites
seemore 66 Posted January 22, 2012 Share Posted January 22, 2012 Jandk The Vale in Furano has apartment for sale Just in case you have won the lottery. Seemore Link to post Share on other sites
rider69 18 Posted January 23, 2012 Share Posted January 23, 2012 Building here is a bit more expensive but if you know what you are trying to build you can reduce costs. The Local rules in Hakuba would be similar to those in Hokkaido. Your roof has to be 4 meters away from the edge of your land. Also look into the build laws of the area. for example. Can you build on 40% of the land or 60% or maybe 80% etc. After that how much are you allowed to build. Can you build 60% over your land size or 200%. For example if you by a 200 square meter block and you have a 60% build law you can only build a 120square meter house. For Hokkaido you'll need good insulation and an efficient heating system. At least R3.5 rated insulation for the temps there maybe more. I would also consider storm windows which are rarely used in Japan. At my local shop I can only buy R2 insulation so I double the stuff up when I reform my houses. I get maybe close to r2.5 to r 3 rated on the insulation. Spray foam insulation seems to be the way to go though really, but it is quite expensive. The tax depends on what you build plus or minus the depreciation. Wood, Concrete steal, Lots of Concrete steal are the 3 types of building that have different levels of taxes minus depreciation. For example if you by an old wooden house that is 25 years old: your house is worthless so you will only pay the land tax. I really like the kit log homes for function and cost IMHO. Also it is very hard to damage the home if you rent it out. Renting out your home is tricky. cause If you go over a certain size on you must conform to the hotel laws. That means proper firewalls, signage, alarm systems and a Health check. If you break this law and have a fire at your home you will have to go to jail, if someone dies in that fire. Getting a loan in Japan is not easy even if you live here. I have been approved for some loans and also been turned down many times. If you dont live in Japan and or you dont have the Ejuken status dont even waste your time trying to get a loan. Pete Hakuba wont let you build those container homes anymore. Trust me they wont hook up your water or power even if you snuck the build through. Gone are the days when you could get away with that. I have many examples of people that had to stop building in the middle of construction. 1 Link to post Share on other sites
provide 3 Posted January 23, 2012 Share Posted January 23, 2012 interesting article i just found: http://au.finance.yahoo.com/news/Japanese-banks-offering-cheap-yahoo7financewp-2898550161.html?x=0 Wonder if you could get a loan here (australia) from a japanese bank to buy a place in japan.... 1 Link to post Share on other sites
panhead_pete 27 Posted January 23, 2012 Share Posted January 23, 2012 Thanks Rider, yeah have backed away from it all mate but appreciate the input. Decided its much cheaper to just come and holiday and invest elsewhere to pay for the holidays. :) Next year I sense a LONG road trip hitting small ski-jos, in a van, not a container lol. Just out of interest do you know what the cost of those log cabins averages out at a m2 built? Thanks Link to post Share on other sites
foreversnow 5 Posted January 23, 2012 Share Posted January 23, 2012 We found a great real estate agent in Furano with a building that was to good to be true. Unfortunately our bank wouldn't lend us the money for overseas investment. I was also told that the locals will support locals before they support international business's 1 Link to post Share on other sites
panhead_pete 27 Posted January 23, 2012 Share Posted January 23, 2012 Snowhuntress the way I was going to do was use a line of credit which I always set up on each new property. Bank doesnt get a say in how you spend it once its set up Link to post Share on other sites
hellyer 216 Posted January 23, 2012 Share Posted January 23, 2012 Pete, Aussie banks will only give you a line of credit if you have suitable collateral, most commonly, equity in a commercially viable property. Generally lending against an overseas property in Japan is probably too high a risk profile for them. Link to post Share on other sites
panhead_pete 27 Posted January 23, 2012 Share Posted January 23, 2012 Sorry thats what I meant. The way I was going to tackle it was use my line of credit based upon the equity in the Aussie property then just withdraw the money and buy what you want in what ever country. I have several loans set up this way to buy the Harleys and cars I import and resell as well as use as deposits for the next property (why I actually set it up ). Once set up I only go to the bank to do the ITT, not ask permission so to speak to spend it and thats how I was going to do my land. In essence you would need the value of the property you want to buy as equity in an existing place/s in Aus. That money is still going to cost you approx 7% as its a loan. On a $200K place that would be $14K before you start with all the other costs. That would sure buy a GREAT holiday every year Generally speaking if its too high risk for the banks its probably too risky Having reread that I think I may have told you something you already know 1 Link to post Share on other sites
rider69 18 Posted January 24, 2012 Share Posted January 24, 2012 I can get a price pete my hockey team is all construction workers. Link to post Share on other sites
NoFakie 45 Posted January 24, 2012 Share Posted January 24, 2012 The biggest consideration here I would have thought is forex. Yen/USD, Yen/GBP, and Yen/AUD are all very volatile. You can be looking at a huge swing in price in a year or two. With the yen at historic highs, do you want to buy lots and lots and lots of them at the current rate? In 2008, 40 million yen was about 170,000 GBP. Now its something like 330,000. With the massive debt, Japan has poor fundamentals and some of the current strength will be due to the crisis in the Eurozone. I've no idea how any of this will pan out, but there are plenty of reasons to suggest forex could start swinging all over the place again. For building in Japan, there are basically no government inspections during the build and very little consumer protection. Its an act of faith in your builder, so choose wisely. With insulation, the spray on foam is good because it expands to leave no gaps (i.e., no draughts) and because its done by specialist sub-contractors. Japanese builders know much more about wood joints than about insulation. I think its good to get someone else in, especially as again there will be no inspector to come and check the work. If you want inspections like overseas, hire an architect or project manager who is unconnected to your builder. Getting a mortgage in a foreign currency is a very risky play. Its screwed up lots of folks in Europe by the sounds. 1 Link to post Share on other sites
7-11 2 Posted January 24, 2012 Share Posted January 24, 2012 In 2008, 40 million yen was about 170,000 GBP. Now its something like 330,000. That's pretty startling, that. Link to post Share on other sites
rider69 18 Posted January 24, 2012 Share Posted January 24, 2012 There is a good architect that lives near Mr. Wiggles. My wife was an architect as well and she goes to our remodeling projects and inspects them while in progress. She hasnt caught them doing dodgy stuff but she has caught them making a mistake in design. Link to post Share on other sites
Go Native 70 Posted January 24, 2012 Share Posted January 24, 2012 There's quite a few development companies in Niseko (big and small) who have plenty of experience at designing and project managing builds. And most have developed excellent relationships with quality builders who are now used to building more western style, luxury homes (if that's what you're after). I doubt many of them are run off their feet at the moment. Some of them might be interested in a Furano project. 1 Link to post Share on other sites
JandK 0 Posted January 25, 2012 Author Share Posted January 25, 2012 This thread has been a much greater success than I expected. Thank you all! Great reading and knowledge. Very much appreciated. Now its time to research... Link to post Share on other sites
JandK 0 Posted January 25, 2012 Author Share Posted January 25, 2012 Jandk The Vale in Furano has apartment for sale Just in case you have won the lottery. Seemore I wish! Link to post Share on other sites
JandK 0 Posted January 25, 2012 Author Share Posted January 25, 2012 The biggest consideration here I would have thought is forex. Yen/USD, Yen/GBP, and Yen/AUD are all very volatile. Thank you - this is one of my biggest concerns really! Any change in the other direction has the potential to send the costs way out... Link to post Share on other sites
JandK 0 Posted January 25, 2012 Author Share Posted January 25, 2012 Japanese Real Estate A legal guide for foreign investors Thank you - is it the Blake Dawson document? http://www.blakedawson.com/Templates/Publications/x_publication_content_page.aspx?id=55923 This idea of having a place in Japan is becomming a lot more involved... Good to have this info. Cheers Link to post Share on other sites
seemore 66 Posted January 25, 2012 Share Posted January 25, 2012 Yeap thats the one Seemore Link to post Share on other sites
Recommended Posts