What are the Ongoing Costs of Owning a Property in Japan?

It depends. Owning a house in Japan is much like owning a house anywhere else in the world, such as North America. You'll encounter the similar types of costs from taxes to maintenance, and utilities. There are unique aspects to consider when it comes to Japanese homes, especially if you're purchasing an older or rural property. Below, we break down these costs into fixed expenses, variable costs, and potential expenses you should keep in mind.

1. Fixed Costs

Property Taxes

• Fixed Asset Tax (Fudōsan Zei): A recurring annual tax set at 1.4% of the property’s assessed value. The assessed value is typically lower than the market price and is reassessed every three years.

• City Planning Tax (Toshi Keikaku Zei): An additional tax applicable in urban areas, set at 0.3% of the assessed value.

• 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)

Management Fees (HOA Fees)

If you own a condominium or apartment, you’ll pay monthly management fees for building upkeep and shared amenities. These can vary considerably based on building amenities and size.

Repair Reserve Fund

Condominium owners must also contribute to a repair reserve fund (Shūzen Tsumitatekin) for major renovations. While this ensures long-term building integrity, it also adds to your monthly expenses.

Homeowners Insurance

Basic fire insurance (Kasai Hoken) and earthquake insurance (Jishin Hoken). Given Japan's susceptibility to natural disasters, fire and earthquake insurance are highly recommended. Premiums depend on your property's value, location, and coverage level.

Utilities

Monthly expenses for electricity, gas, water, and sometimes sewage. These will fluctuate seasonally and based on usage.

Internet and Cable

Costs for internet service and entertainment will vary based on providers and packages.

Mortgage Repayments

Your largest monthly expense if you have a loan.

2. Variable Costs

These costs are less predictable and can fluctuate based on your property, location, and usage.

Seasonal Costs

• In snowy regions, anticipate expenses for snow removal.

• For properties with gardens, maintenance costs can vary widely based on size and complexity.

Maintenance and Repairs:

Keeping your property in good condition will inevitably require ongoing maintenance and repairs. These can include:

• Pest Control: Termite treatment is essential for wooden homes.

• Exterior Wall Painting: Repainting is necessary every 10-15 years to maintain the building's appearance and protect it from the elements.

• Plumbing Repairs: Older plumbing systems may need updates.

• Appliance Maintenance and Repairs: Over time, appliances like refrigerators, washing machines, air conditioners, and water heaters will require maintenance or repair. Be prepared for these costs, as they can vary depending on the appliance type and age.

• Large repairs/replacement like roof: Japanese roofs, depending on material, need replacement every 20-30 years. Costs vary depending on material

  • Tile Roofs: a lifespan of 30-50 years.

  • Metal Roofs: a lifespan of 20-40 years.

  • Slate Roofs: a lifespan of 20-30 years.

3. Potential Costs

Parking Fees

If you own a car, you may have to pay for parking, especially in urban areas or apartment buildings.

Security Systems

You may need to factor in costs of adding or maintaining security systems.

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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.