Investing in property in Japan
When purchasing a home there are many questions that need answers. We have complied a list of frequently asked questions that investors have had for Niseko Resorts Group. Please note that these questions and answers are specific to Niseko Resorts Group and may not be relevant to other developers.
Can foreign non-residents own property in Japan?
Yes. Any foreign national can legally purchase real estate in Japan, permanent residency is not required. All of the property available through Niseko Resorts Group is free hold title.
Is the property Leasehold or Freehold?
The land and house package in the Orchards Niseko and Country Resort is freehold title.
What is the sales process?
Please refer to our sales process timeline for a break down of the steps involved.
Where are the properties located relative to the ski slope and Hirafu village?
Akazaroa is place in the centre of Hirafu village walking distance to the ski hill and all main restaurants.
The Orchards Niseko is conveniently located on the eastern side of Hirafu, 1km along Route 343 less than a 2 min drive away.
Country Resort is another 3 mins past The Orchards, and is 2.2km away from Hirafu village.
A Map and images of the area can found here.
How long does does the process take from start to finish?
The length of time varies from buyer to buyer and chalet to chalet.
Generally the build of the chalet itself takes between 4-6 months depending on the size and complexity of the chalet.
What is included in the price?
a. The price quoted includes the land, house, architect fees, project management fees, as well as built in cabinetry, fittings, and equipment. Consumption tax is payable on the value of the house and is invoiced separately.
b. Please refer to the detailed listing of built in cabinetry, fittings, and equipment list that is supplied with each house. Small changes or upgrades are possible for many of these items.
What kind of yield can I expect?
The rental returns will fluctuate based upon demand and running costs. Our experience over the last few years is investors can expect a 1-4% return per annum subject to the amount and timing of the owner usage.
Is there a local management company to take care of my property?
Midori no Ki (“MnK”) is a Japanese property management company that will have office space at the Clubhouse in The Orchards to manage the properties in accordance with Japanese regulations.
MnK has been managing properties in Niseko since 2010. The owners and staff of MnK have been in Niseko for over 10 years and have extensive experience managing owner and guest requirements. MnK are currently ranked in the top 3 on Trip Advisor for The Orchards Niseko and the top 10 for their other properties.
How do you market my property to ensure that I get maximum returns on my investment?
Niseko Resorts Group uses established relationships with several domestic and international wholesale travel agents. We also promote our properties pro-actively online and receive many direct bookings through our property management company www.mnkniseko.com. Niseko Resorts Group prides itself in building a community and hosts regular events throughout the year to attract customers.
Japanese Taxes on properties purchased/owned by foreign investors
What taxes are payable when I purchase the property?
a. Real Estate Acquisition Tax
Real Estate Acquisition Tax is levied at 4.5% for non residential properties or 4% for residential properties, based on government valuation of the property, which is based on registered council records rather than the price. Valuations tend to lag market valuations by as much as 50% in some parts of the Niseko. This levy is often charged 3 to 18 months after the purchase of the property.
b. Contract Stamp Duty
A number of government revenue stamps (literally a postage stamp) need to be purchased and then affixed to the Sales Contract. The amounts are small and the maximum duty is <¥180,000.
c. Title Registration Stamp Duty
A duty (or tax) charged by the government that is calculated on the value of the property (not the purchase price).
d. Title Registration Certificate Charge
A fee of ¥1,500 will apply to the block of land purchased. An additional fee of ¥1,500 will apply if there is a building on that block of land.
What are the annual property taxes from the local government?
A fixed asset tax of 1.4% of the assessed value of the property is levied.
Is there tax on rental income?
Currently, non-resident individuals earning rental income from Japanese property may be taxed at 10%. Taxable income is defined as gross rental income less expenses and depreciation. You may not have to file a tax return if your net income is <¥380,000 after depreciation and expenses which include all of your running costs, trips to Niseko for due diligence, management fees etc. The property manager will assist the owner in the process of filing tax.
Is there a capital gains tax on the sale of property?
Capital gains tax depends on the owner’s tax situation in Japan. At the moment, capital gains tax rates vary depending on the length of time the property has been held and whether it has been used as a place of residence or not. The basic calculation for Japan based vendors is 39% if the property is sold within 5 years and 19% if it is sold after 5 years. If the seller is overseas based, then the percentages may drop to 30% and 15%. There are other mitigating factors and it is best to confirm all tax payments with a registered tax accountant, which the property manager can assist with when necessary.