The Property Banks Buyers Guide to Japan
Procedure 1*.
Obtain a corporate registry certificate
Time to complete: 1 day
Cost to complete: JPY 1,000 each copy
Comment: The parties (as corporations) must obtain a corporate
registry certificate that must be issued within 3 months before the
registration application. It can be obtained from a relevant
Registry Office, at a corporate registry at which the party
(corporation) is registered. The cost is JPY 1,000 per copy.
If the buyer is a natural person, he must obtain a certificate of
current address. It can be obtained from a relevant local government
at which purchaser resides and the cost is JPY 300 per copy.
Procedure 2*.
Obtain a certificate of the parties' seal impression
Time to complete: 1 day
Cost to complete: JPY 500 each copy
Comment: The parties must obtain a certificate of their seal
impression (the seal used for execution of the registration
documents), that must be issued within 3 months before the
registration application.
It can be obtained from a relevant Registry Office, at a corporate
registry at which the party (corporation) is registered, or from a
relevant Registry Office, at which the seal of the natural person is
registered.
The cost is JPY 500 per copy for a seal of a corporation and JPY 300
per copy for a seal of a natural person.
Procedure 3*.
The seller obtains a certificate of evaluation for fixed asset tax
of the real property at a local tax office
Time to complete: 1 day
Cost to complete: JPY 400 per piece of real property
Comment: The seller must obtain a certificate of evaluation for
fixed asset tax of the real property before the registration
application. This should be obtained for the transaction because
such certificate must show the most updated evaluation and will be
used later to calculate taxes to be paid.
It can be obtained from a relevant local tax office, which governs
the relevant real estate.
The cost of the issuance is JPY 400 per piece of real property.
Procedure 4*.
Obtain stamps for stamp duty at a post office
Time to complete: 1 day
Cost to complete: approx. JPY 100,000. (This depends on the purchase
price shown on the agreement, as the stamp duty amount is not always
at the same rate of the purchase price.)
Comment: Stamps for stamp duty can be purchased at various places,
such as post offices.
Stamp is the sole official cost for execution of the sale agreement,
if a written agreement is prepared.
The preparation and execution of a written sale agreement is not
necessary. Even an oral agreement is acceptable for transferring the
title to the real estate, although usually a written agreement is
prepared.
Procedure 5.
File an application at the Registry Office
Time to complete: 7-10 days
Cost to complete: 1% of property value evaluated for fixed asset tax
(registration and license tax)
Comment: The parties file an application for registration at the
Registry Office.
The Registry Office will register the title under the name of the
new owner.
A registration and license tax must be paid at the Registry Office
on the amount of 1% of the property value. The normal tax rate is
actually 2%, however a reduced tax rate of 1% is applicable until
March 31, 2006, unless the law providing such reduced rate is
extended.
As registration is a requirement for perfection vis-à-vis third
parties, reviewing the certified copy of the real property registry
is generally sufficient for identifying any existing perfected
encumbrances over the real property.
The parties may apply for registration by themselves. However,
because of the complexity of filing, usually they retain a judicial
scrivener for registration.
There is a 5% consumption tax in Japan. Sales or leases of land are
exempted. However, if the transaction includes the sale or lease of
buildings, consumption tax applies only to the price of the
building.
The documentation shall include:
• Executed original copy of the purchase and sale agreement
(alternately a copy of registration application signed by the seller
and the buyer)
• Certificate of registration of seller's title of the real property
(toukizumi kenri sho) (Already in his possession)
• Certificate of corporate registry of the parties (if any of them
is a corporation) (obtained in Procedure 1)
• Certificate of the parties' seal impression (obtained in Procedure
2)
• Certificate of evaluation for fixed asset tax of the real property
(obtained in Procedure 3)
• Power of attorney of the seller (if a judicial scrivener applies
for the registration on behalf of any of the parties)
Procedure 6.
Payment of the real property acquisition tax
Time to complete: 1 day
Cost to complete: 3% of property price evaluated for fixed asset tax
Comment: This is a post closing matter, the purchaser will receive
the notice of the real property acquisition tax from the local tax
office a few months after the registration
The real estate acquisition tax must be paid at the local tax
office.
Actually, 4% is the normal tax rate. The 3% reduced tax rate is
applicable until March 31, 2006, unless the law providing such
reduced rate is extended.