Let us go through these 6 phases with you.
- 01 Financial Plan
- Acquire an estimate of expenses related to the property purchase, as well as a estimate yield for income properties.
- Purchasing Costs
- When you plan to purchase a property, you will need to budget for expenses in addition to the actual property price. The total amount of these expenses is roughly 6-8% of the property price.
Breakdown of Expenses
- Stamp Duty
- Revenue stamps are required to be affixed to the Purchase and Sale Agreement and the loan agreement.
- Loan Fees
- Loan fees typically include processing fee, guarantee fee and other fees.
- Fire insurance premium, etc.
- Property Registration
Tax and Fees
- Property registration tax：
When you file for the transfer of the property title (i.e. Deed) with the Legal Affairs Bureau, you are required to pay a Property Registration & License Tax.
Registration of land ownership is 1.5% of the assessed value of the property (2% after April 1, 2019), and registration of building ownership is 2%. In addition, if the purchase of the property is financed by a mortgage lender, the tax
amount for this registration is 0.4% of the loan amount.
Registration service fee： To file the property title registration document, a handling service fee may be charged by a judicial scrivener.
- Property Registration
- Property Tax
- The amount of annual property tax will 1.4% of the standardized assessed value of a property. You will pay a pro-rated amount of the annual property tax for the first year in accordance with the number of the days you own the property.
- City Planning Tax
- City Planning Tax is levied at 0.3% of the standardized assessed value. The amount for the first year will be pro-rated in accordance with the number of days of your ownership of the property.
- Brokerage Commission
- The amount of the Brokerage Commission is determined and stipulated in your contract with a realtor of Mitsui Fudosan Realty. The amount shall include both general and regional sales taxes.
- Real Estate Acquisition Tax
- For a residential property, the amount of the Real Estate Acquisition Tax will be 3% of the assessed-value of the property.
- Other Expenses
- Expense of relocation; moving out and moving in, etc.
* For details on related taxes, please see here.
- 02 Information Gathering
- Search for properties utilizing Mitsui's extensive network and database.
- Property Search
- When you buy any property, it is critical that you conduct thorough research and gain an understanding of the location, price, floor plan, access to public transportation, etc., in order to identify your ideal property. The most important factor in gathering property information is to find a reliable real estate broker who can provide updated and credible information on various properties that meet your criteria.
- Mitsui Fudosan Realty
- Mitsui Fudosan Realty can serve your needs through our comprehensive information data base that has been established through extensive experience and knowledge gathered through close networking with local communities. You will find the Mitsui Fudosan Realty's datebase full of comprehensive and exclusive property information and helpful to satisfy your needs.
- Mitsui Fudosan Realty
- 03 Property Viewing
- Arrange property viewings with a Mitsui realtor, who will answer questions about the condition of properties, both physical and legal as well as surrounding environment.
- Property Viewing
- Viewing the property is the most effective way to survey the actual conditions and neighboring environment of the property that you may not necessarily find on the listing. Our realtor will accompany you and provide you with detailed on-site information.
- Property Inspection Tips
- When viewing a property, closely compare what is shown and described in flyers and ads with what you actually see. Carefully check for stains and other physical aspects such as sun exposure and natural ventilation, etc. In addition, it is important that you view the property from the standpoint of each family member.
- Area Observation Tips
- It is very important that you check out the surrounding environment. Make sure you check the distance to the closest station from the property. Also, confirm availability of public facilities such as schools, parks, hospitals and shopping streets. Pay attention to the traffic conditions of the area. In many areas, congestion and noise level of traffic show a different pattern on weekdays from weekends.
- 04 Transaction Contract
- Submit an offer and negotiate the terms and conditions with the seller. Once both parties agree, your realtor will prepare the transaction contracts including the Purchase & Sale Agreement.
- Making an Offer Once you find a property that you wish to purchase, your next step is to submit a Letter of Intent, i.e, your offer. The realtor will begin negotiation with the seller on your behalf regarding the purchase price, payment method and timing, delivery date, and equipment and fixtures that shall remain with the property, as well as other terms and conditions. After both parties agree on all issues, the realtor will explain any relevant law and other issues related to the transfer of title.
- Explanation of the "Statement of Important Matters (SIM)” In accordance with the Statement of Important Matters, a licensed and certified realtor shall explain to the buyer details about the property such as title registration, the type of property ownership and right, legal description of the property, payment methods, and the applicable provisions in case of cancellation. You should understand each clause of the Statement of Important Matters and ask your realtor for any clarification.
- Signing the Purchase and Sale Agreement The final step is for the seller and buyer to sign the Purchase and Sale Agreement. The purpose of this agreement is to stipulate the conditions of the transaction and the rights and obligations of both the seller and buyer to ensure a safe and legally binding transaction. Once parties sign the Agreement and the buyer makes a down payment, the Agreement comes legally into effect. If either party fails to fulfill their contractual obligations, a penalty may be imposed on the breaching party. Therefore, it is strongly recommended that both parties clearly understand each and every provision before signing the Agreement to avoid default and payment of any penalties.
What you will need when signing the Purchase and Sale Agreement
- Certificate of Signature or Registered personal seal (Dated within the past three months)
- Down payment (Advance confirmation of the payment method is recommended)
- Funds to cover the Stamp Duty fee (The fee depends on the purchase price of the property)
- 50% of the brokerage commission and, separately, general sales tax and regional sales tax.
- * The documents you need will differ depending on your case. For details, please contact us.
- 05 Closing
- Settle all payments in exchange for the keys, and finalize the purchase including transfer of title.
- Steps to Finalize the
- Verification of the contents of the registration forms
- Payment of the outstanding balance
- Payment of property tax and other fees
- Other Payments (e.g. outstanding balance on brokerage commission or other service fees)
- Receipt of documents (e.g. warranties, confirmation of property lines, management bylaws)
- Delivery of keys
- Steps to Finalize the
- Documents and Fees Required upon closing
- Depending on the type of property that you have purchased, The documents and fees required upon closing will differ. The following shows a list of fees and documents required for residential property purchases. For other types of
property, information is available at Mitsui Fudosan Realty by request.
- Outstanding balance of the purchase price of the property
- Outstanding balance of the brokerage commission
- Registration fee (Property Registration & License Tax, handling service fee charged by a judicial scrivener)
- Property Tax, City Planning Tax, Property Management fees and other charges.
- *These amounts will be pro-rated based on the number of the days of ownership.
- Certificate of signature or registered personal seal (dated within the past three months) which required only when a mortgage lien is recorded on the property title.
- Ownership Title
- The property title must be registered to hold a public record of the property ownership. Due to the complexities of the process, it is typical for judicial scriveners to handle this matter for you. The judicial scriveners will complete the necessary registration application documents to be filed with the Legal Affairs Bureau. Upon receiving filed and recorded property title registration documents (Property Title Deed) from your judicial scrivener, you should keep them in a secure place to ensure they are not lost or damaged.
- Ownership Title
- 06 Move-in
- Begin preparation to move in to your new property, using the checklist.
- Checklist for Relocation
- Begin preparation to move out. Separate items into those you will keep, donate or discard.
- Choose the moving company.
- Notify your municipal ward office of your move.
- Cancel and submit new application for utilities- electricity, gas, telephone, Internet, etc.
- Notify address change to banks, insurance companies, credit card companies, etc.
- Notify your children's school of the transfer, and enroll in a new school.