Buying house in Japan

[michaelthiessen]

@ginger18 I was talking to another guy that I would just give her cash and she can deposit it. But I guess that’s tax fraud in Japan lol. Got taught the The American way- pay as little taxes as possible

 

[ginger18]

@michaelthiessen yeah I wouldn't risk it. especially as it might jeopardize your visa

gifting her 1.1M yen every year tax free is still a nice chunk of money for the house

 

[laya]

@wlc777 On negotiation,
“Yes but have to have a reason”
I agree and can give an example.

From the start when they first showed us the home, my wife made a comment that there was no toilet on the second floor and that was a shame. Asked the agent if they could find out if renovation was possible for the second floor (plumbing position and everything).

Next visit. Before the visit they asked if we were interested enough to hold the property (if we set up contract appointment day they’d hold it), but we took a risk and didn’t respond to that right away. I think this helped our case. They probably would have been less likely to negotiate if we had let them know that we (actually) really wanted the house a lot.

Brought my wife’s parents to the second visit, too (lol) and her dad made a lot of helpful comments, “would we be able to re-finish the floors because there are a lot of scratches… etc. etc.”

Told us that the toilet renovation was possible, and I came armed with a little bit of knowledge so I could make a fairly accurate guess on how much that would cost. When they gave me a number, I said, “yeah but that would be a very basic toilet, without a sink installed etc etc and it would probably actually end up costing us a bit more…”

That’s when they brought the price down by 100万 and said we could use it towards the renovation. We signed the contract; I think we will probably do the renovation but have no obligation to.

 

[barneyo]

@wlc777
No and it's insulting to the real estate agent, as you are using his services and asking if you can pay him/her less.

lolll... are you serious.

stop putting your own biases off as fact.

this attitude is just plain wrong and not based in reality

 

[69inforever]

@michaelthiessen House and land prices can be negotiable depending on location and how long they have been on the market for. I paid cash for my land and was able to get it down from 1500 to 1100. The land had been on the market for about 1 year.

You can probably get lower broker fees if you do some stuff yourself, but it's a pain in the ass so I just paid. It wasn't that expensive.

Lower term loans usually have better rates. Some longer loans you can also pay early.

If you get a loan, you will probably only be able to get it in your wife's name, assuming she is Japanese and has taxable income for at least 1 year. The max loan is usually 8x the annual income. You will probably not be able to get a loan until you have permanent residency or at least a couple of years of stable income in Japan. Banks will also look at the type of income. So for example, stable company job is seen more favorably as apposed to capital gains or self-employment income. You can get a dual loan, but it will probably be easier to get it in her name.

Banks will look at your residency status, income amount, income type, etc... Having PR and stable income will make it easier to get a loan. You can still get a loan with some banks without PR, but will need to have stable income for those too, and sometimes they are at higher rates.

 

[michaelthiessen]

@69inforever Thank you!

Yeah the hypothetical loan will be through my gf/wife, she’s a Japanese national, born, living, and working in japan

 

[paleouss]

@michaelthiessen -Used house prices usually are negotiable. New ones not so much, though sometimes developers may lower the price if it has gone through several offering periods and there are still units unsold.

-I don't think sellers care about cash since like you said the bank who approved you of the loan would front it all up to them anyways.

-Less than 35 years may make sense if the interest rates are high, but Japan has low interest rates so it wouldn't make a huge difference. A 40M loan for 20 year vs 35 year at 0.4% is probably like 2 or 3 million yen difference or something.

-Unfortunately bank loans have the condition that only people whose name are on the loan can be on the title. So if the loan is entirely in your wife's name, then the title will also be the same. If you want a split title, you would have to pay cash or you would have to be a co-signer of the loan and you would have to be subject to the loan approval process too.

-Mostly income from the job, how stable the job is (i.e. how many years working), how much of a down payment and for foreigners many banks (though not all) will have PR being a requirement.

 

[michaelthiessen]

@paleouss Really appreciate the reply!

Yeah, been looking at shinchiku so maybe not much wiggle room there.

The interest rates are so insanely low it seems like a waste not to get a loan lol. Rather keep cash in my American investments

 

[michaelthiessen]

Thank you thank you!

Loan would be in my gf/wife’s name, she’s a Japanese citizen born, living, and working a salary job. Adding that to my original post

 

[myle08]

@michaelthiessen If you're buying from abroad cash is easier and faster. For a mortgage you'd have to live here for awhile and have a steady income yourself. For her name on the mortgage I'd recommend to marry her first then shop for the house though because it'd make everything clean and simple legal-wise and probably less fees. You could stay with her family for a bit and they might even join in on the search or have connections.

A real estate agent isn't required but would help facilitate in finding property in that specific area. The guy who sold my house to me had a open ended contract with the agent meaning the seller could direct sell, which is what we did because the agent sent a brash email when I asked to see this house in addition to a list of other homes. (email was in Japanese and despite saying I'm looking to do a cash purchase, in their reply they wanted to "confirm" whether I "actually" wanted a house in Japan and proceeded to notify me that I'm not going to qualify for a mortgage despite them not knowing who I am other than I'm a foreigner) So I just visited the individual places myself and negotiated individually. We hired a multilingual scrivener who explained taxes, etc and wrote up the contract in English.

 

[kel_sulz235]

@michaelthiessen Is it possible to close on the house remotely? There is so much paperwork. That all needs signature.

 

[audentio]

@michaelthiessen

If getting a loan, was thinking about getting the house in my girlfriends (soon to be wife) name so if we’re getting a loan she can use the 0.7% tax write off.

Are you thinking of getting a joint loan? Get a loan in your gf-soon-to-be-wife's name since she is a Japanese citizen and hence can get loan with ease, OR get a joint loan with your wife?
In the former case your gf will be the registered owner of the property. In the latter case you both will be registered owners, ownership % based on what % of the loan is in your name.
You could also have joint ownership say, if OP funds x% with cash and gf funds the remaining with loan and/or cash.
Stating the obvious, but if OP wants to own the property they have to have it financed directly through cash/loan even partially, as opposed to giving cash to the partner who will then be the sole owner despite you actually have financed the purchase.

 

[joshuadaryl]

@michaelthiessen I’m a part owner of a real estate business here. Prices are fully negotiable. You don’t need reasons but they can help and this will depend on what you are buying land vs house.

It’s good to know the average land cost per tsubo in the area as your valuations will be based off that first then if any relative value left in the house. If the house is 30yrs plus old and in poor state you are really only negotiating on the land value.

Don’t be wasting time asking for a house inspector as they don’t really even exist here. Any major defects have to be listed on the SIM unless it’s a as is sale.

If lowballing you want to be a cash buyer with quick settlement and accepting as is condition. The agent should be able to tell you if your offer will be considered or not.

I’ve put in crazy lowballs and had them accepted. Also had offers that we didn’t even take to the vendor cos we know the vendor would say no.

If getting a loan then it’s time and work for everyone so your negotiating power is far less. It can take the bank up to 4 weeks to approve and they require lots of documentation. If the house wasn’t registered properly which is common then more time etc.

Agent fees are negotiable. They might come down 0.5-1% to get a sale done on a stale listing but generally most agents will be reluctant to reduce fees if it’s your first purchase through them. You’d be better off just getting a lower sales price cos if you’re asking the agent to reduce their fees their motivation to secure a good price for you drops as well.

You can do a little of your own work as well. At the town public affair office you can pull the title history to the land for about ¥400. You can then see how the current owner got it. Is there a lien on the land and house, was it inherited etc (this is good for vacant homes where you can then send a letter to the owners actual address if different to the title ) Even door knock in neighborhoods you’d like to live in saying you looking to buy. You might get lucky. I know several people this has happened.

Anyhow as a rule of thumb I’d never offer asking price unless it was very undervalued and obvious someone else would snap it up.

Best of luck

 

[michaelthiessen]

@joshuadaryl Right on. Great info!

 

[littlelou]

@michaelthiessen

Is there any reason to get a shorter term loan than the 35 year?

It think it can vary, but mine, for example, had no penalty for early payments so it made sense just to get the longest loan to enjoy the highest tax deduction until the tax deduction ran out. Plus I can invest the money saved on the lower monthly payments which should be making more than I'm losing to interest.

If getting a loan, was thinking about getting the house in my girlfriends (soon to be wife) name

Any money you then pay into the house not in your name will be considered a gift and be subject to gift tax laws.

 

[michaelthiessen]

@littlelou Thanks

Same idea on the first part

For the second part can’t I just give her paper yen and have her deposit it into her account? Would that raise a red flag?

 

[littlelou]

@michaelthiessen There's plenty of ways to commit tax fraud. I have no idea the risk of getting caught for any given one.

 

[michaelthiessen]

@littlelou Guess the American way of thinkings ingrained in my head. Do whatever you can that’s kiiiiinda in the gray area to lower taxes lol

 

[drew777]

@michaelthiessen Not gray, black.

There is a 1.1 million yen deduction, so any gifts up to that total amount in a year is not taxed. That works out to a bit over 91k yen per month, so if you can keep the monthly mortgage payments under that you’re good.

However, the whole point of the large deduction is so that spouses and family etc don’t have to really keep track of everything for all the little stuff in the day to day.

However, the closer you are to the limit the more likely you’ll draw attention.

 

[ellisonbrowny]

@michaelthiessen Both your girlfriend and wife are Japanese?