Owning a home in Japan
Annual taxes, insurance, repairs, condominium fees, renovations, renting out, and selling — the ongoing cost and duty of ownership.
Ownership is an ongoing commitment: budget every year for fixed-asset and city-planning tax, insurance, and repairs — self-funded for a house, via management and repair-reserve fees for a condominium.
Key points
- Fixed-asset tax (and city-planning tax where applicable) is an annual municipal cost based on assessed value.
- A house owner must self-fund roof, exterior, structure, drainage, and termite repairs; a condo owner pays management and repair-reserve fees.
- Fire insurance is generally required by lenders; earthquake cover is separate and capped.
- Renting out, Airbnb, or moving overseas requires lender, insurer, tax, and building-rule review first.
The annual cost of ownership
Every year an owner pays fixed-asset tax (固定資産税), a municipal tax based on assessed value, plus city-planning tax (都市計画税) within designated urban-planning areas. A condominium owner also pays a monthly management fee (管理費) for ordinary operations and a repair reserve (修繕積立金) for major capital works — the reserve is saved for the future, the management fee is not. A house owner pays neither but must self-fund an equivalent private reserve for roof, exterior, equipment, and structure, because those costs land directly and unevenly over time.
Insurance and repairs
Lenders generally require adequate fire insurance on the building. Earthquake insurance must be attached to fire insurance; its insured amount is generally 30–50% of the corresponding fire-insurance amount, capped at ¥50 million for the building and ¥10 million for contents, and it is designed to support recovery rather than guarantee full reconstruction. Ordinary fire insurance generally does not cover earthquake-caused fire, so consider the separate earthquake cover. Review coverage annually and compare external quotes even if a lender or agent offers a bundled policy.
Renting out, Airbnb, moving, selling
You can rent out a mortgaged home only with lender consent and compliance with loan, tax, insurance, and building rules; converting to an investment property without authorization can breach the loan. Airbnb/minpaku requires national law, municipal ordinance, condominium bylaws, lender, and insurer all to permit it. If you move overseas, notify the lender, insurer, tax authorities, and manager, because owner-occupancy terms may require action. When you sell, brokerage, mortgage release, legal costs, repairs, and tax reduce net proceeds, and a qualifying principal-residence sale may access a special capital-gains deduction of up to ¥30 million subject to conditions.
Who this is for
- New and prospective homeowners
- Owners planning repairs or a change of use
What this is not
- Detailed tax filing instructions
- Commercial property management
- A low condominium fee is not a saving if it means underfunded reserves and a future special assessment.
Frequently asked questions
What is a condominium management fee?
Payment for ordinary shared operations; it is not saved for major repairs (that is the repair reserve).
Can I rent out my mortgaged home?
Only with lender consent and compliance with loan, tax, insurance, and building rules.
Do I need fire and earthquake insurance as a homeowner?
Lenders generally require fire insurance; earthquake insurance is separate, must be attached to fire insurance, and is capped and recovery-oriented.
What happens if I move overseas?
Notify the lender, insurer, tax authorities, and manager; owner-occupancy terms may require action.