Japanese Property Terms Explained

Cannot be demolished and rebuilt under current codes, typically due to insufficient road frontage. Major financing and exit risk. TokyoInvestor flags all rebuild-restricted listings.

You own both building and land outright, permanently, with no ongoing fees or expiry date. The strongest and most preferred ownership structure for foreign buyers.

You own the building but lease the land. Monthly fees apply and the contract has a fixed term. Harder to finance and exit than freehold.

The internal rules of a condominium. Often restrict subletting, short-term rentals, and renovations. Always review before purchasing for rental purposes.

Maximum permitted total floor area relative to land area. Affects future development potential and value.

Maximum percentage of the land that a building footprint may occupy.

Annual property tax, typically around 1.4% of the government-assessed value (which is below market value).

One-time tax on purchase, typically 3–4% of assessed value. Payable several months after completion.

Paid on ownership transfer registration, typically 0.4–2% of assessed value.

Typically 3% plus ¥60,000 plus consumption tax, paid by both buyer and seller in Japan.

Real Estate Transaction Specialist. Must be present at all property transactions in Japan. Provides the mandatory explanation of property specifics.

Handles legal registration of ownership transfers. Essential for any purchase — choose one independently of the selling agent.

A standalone dwelling, typically on freehold land. The dominant product type in outer Tokyo wards.

A unit in a reinforced concrete multi-unit building. Despite the English loanword origin, a permanent residential structure of high build quality.

Typically wood-frame or light-gauge steel construction. Generally lower build quality and price than a mansion (manshon).

A bare plot without a building. Valued separately from structures; Japanese buildings depreciate but land holds value.

Japan's 1981 building code revision. Properties built post-1981 meet updated earthquake resistance requirements. A key financing threshold.

Pre-1981 building code. Harder to finance and insure. May require seismic inspection and upgrade assessment before purchase.

Short-term rental of a private residence. Regulated under the national Minpaku law (民泊新法) and ward-level rules.

Allows short-term rental nationally for up to 180 days per year, with wards able to impose tighter restrictions or broader permissions.

Licensing framework for hotels and traditional inns. An alternative STR licensing route that can permit year-round operation.

Home loan. Japanese bank mortgages are generally limited to residents; non-residents must seek international lenders or specialised domestic options.

Property purchased primarily for rental yield. Valued on yield metrics as well as market comparables.

The return on investment expressed as an annual percentage. Used both for gross and net rental yield.

Annual rent divided by purchase price × 100. Does not account for taxes, management fees or vacancies.

Annual rent minus expenses, divided by purchase price × 100. A more realistic return metric than gross yield.

Typically one to two months' rent in Tokyo. Refundable minus legitimate deductions.

Non-refundable payment to the landlord on lease commencement. Becoming less common but still widespread.

Monthly fee paid by condominium owners for common area upkeep, building management, and shared services.

Monthly contribution to a fund for major future building works. Higher reserves indicate better-managed buildings.

Standard area measurement for Japanese property listings. Floor area (建物面積) and land area (土地面積) are always stated separately.

1 tsubo = 3.306 m². Still used in some older listings and land valuations. Multiply tsubo by 3.306 to convert to m².

Floor area exceeds the permitted ratio. Cannot be refinanced or rebuilt as-is without bringing the structure into compliance.

Buildings must front a road of at least 2 metres. The basis of most rebuild restriction (再建築不可) issues.

A plot with all buildings demolished, ready for new construction. Often valued differently from land with existing structures.

Land that must be surrendered to road widening when rebuilding. Reduces effective plot size and usable area — check carefully on any purchase.