Are There Hidden Fees When Buying an Akiya in Japan?
AkiyaHub TeamAre There Hidden Fees When Buying an Akiya in Japan?
The answer? Yes, there are additional costs you need to consider.
While these aren't necessarily "hidden," they can catch first-time buyers off guard if you're not prepared. From taxes and agent fees to potential renovation costs, understanding the full picture of ownership expenses is crucial before taking the leap.
Purchasing an Akiya in Japan is similar to buying a house in North America in some ways, particularly when it comes to closing costs. These often total under 15% of the home's final price. Just as a title company manages the closing process in North America, a judicial scrivener in Japan performs a similar role, providing an estimated breakdown of costs before finalizing the purchase.
To make budgeting easier, you can use our Akiya Calculator to estimate a rough budget, including potential fees and taxes.
Taxes and Fees Breakdown
When buying an Akiya, taxes and fees start right at the point of purchase. Here’s a breakdown:
1. Taxes and Fees at the Time of Purchase
These are the costs you’ll encounter when finalizing your Akiya purchase:
▶️ Real Estate Agent Fees:
For properties under ¥8 million: A flat rate of ¥330,000
For properties over ¥8 million: 3% of the sales price + ¥60,000 + 10% consumption tax
For example, on a ¥9 million akiya, the agent fee would be approximately ¥363,000.
▶️ Registration and License Taxes:
To officially transfer the property ownership under your name.
0.4% of the assessed value for land.
2% of the assessed value for buildings.
▶️ Acquisition Tax (Fudōsan Shutokuzei):
This one-time tax is imposed by the local government, 3% of the assessed value for residential land and buildings (reduced from the standard 4% until March 31, 2027)
▶️ Fixed Asset Tax (Fudōsan Zei) and City Planning Tax (Toshi Keikaku Zei)
Annual taxes paid by property owners:
Fixed Asset Tax: 1.4% of the property's assessed value
City Planning Tax: 0.3% of the property's assessed value (applicable in urban planning zones)
▶️ Judicial Scrivener Fees (Shihoshoshi):
For handling legal documentation and property registration.
Typically ranges from ¥50,000 to ¥150,000.
▶️ Stamp Duty (Inshi Zei):
A tax levied on the purchase agreement, based on the property’s purchase price.
For example:
Purchase price under ¥10 million: ¥10,000 stamp duty.
Purchase price between ¥10 million and ¥50 million: ¥20,000 stamp duty.
2. Potential Additional Costs
Depending on the property, you might also need to address:
▶️ Property Inspection Fees:
While not legally required, property inspections are highly recommended:
Assess Structural Integrity: Older homes, especially in rural areas, may have damage from earthquakes, termites, or prolonged neglect.
Identify Hidden Costs: Inspections can reveal necessary repairs, such as roofing, plumbing, or electrical work, which can significantly affect your budget.
Peace of Mind: Knowing the property's condition helps you make an informed decision and negotiate the price if repairs are needed.
Cost: Typically ranges from ¥50,000 to ¥100,000 (~$350–$700 USD) depending on the property’s size and location.
▶️ Back Taxes and Liens:
Akiya homes are often vacant and may come with unpaid property taxes or liens tied to the property.
What to do: Request a full tax status report from the local municipal office to identify any outstanding taxes or liens. Ensure these are cleared by the seller before ownership transfer.
▶️ Renovation Costs: Many Akiya homes require repairs, and renovation costs can vary greatly depending on the condition of the property.
▶️ Utility Reconnection Fees: For vacant homes, you may need to pay to reconnect water, gas, and electricity.
▶️ Insurance Costs:
While optional, property insurance is highly recommended to protect against natural disasters (e.g., earthquakes, typhoons) and other risks.
Costs vary based on the property’s size, location, and condition but typically range from ¥20,000 to ¥50,000 (~$150–$350 USD) annually.
▶️ Furniture and Appliances (including Trash Removal):
Many Akiya homes come furnished with old or unusable furniture and appliances that may need to be removed.
Trash Removal: Disposal fees for large items in Japan can be significant, as they require special arrangements.
Cost: Trash removal fees can range from ¥5,000 to ¥30,000 (~$35–$200 USD) depending on the volume and type of items.
3. Recurring Annual Taxes
Once you’ve purchased the home, there are ongoing property taxes to consider:
Fixed Asset Tax (Fudōsan Zei): 1.4% of the property’s assessed value, reassessed every three years.
City Planning Tax (Toshi Keikaku Zei): 0.3% of the property’s assessed value, applicable in urban planning zones.
Example of Recurring Taxes:
For a property priced at ¥10,000,000 with an assessed value of 70%:
Fixed Asset Tax: ¥98,000/year
City Planning Tax: ¥21,000/year
Total Annual Taxes: ¥119,000 (~$800 USD/year)
**These taxes are prorated if the property is purchased mid-year.
Why are taxes manageable in Japan? Property taxes in Japan exist just like everywhere else. However, they are often seen as manageable because they are proportionate to the home’s assessed value. If the home is inexpensive, the assessed value is lower, and so are the taxes.
Additionally, Japan’s unique approach to depreciation plays a significant role. Unlike in markets where property values consistently rise, older homes in Japan are typically assessed at lower values over time. This results in reduced tax obligations, particularly for older or rural properties like many Akiya homes.
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Please note that the information in this article is subject to change. We will update the content as new information becomes available to ensure you have the most current insights on Akiya investments.