Chapter 10 — Money: transfers and financing

Lending criteria vary by institution and change; nothing here should be read as a commitment from any lender.

Start with the honest part

If you are not resident in Japan, plan on paying cash.

Non-resident mortgages for Japanese property exist, but they are narrow, and building a purchase plan around getting one is how people lose properties. Read the financing section below as a description of exceptions rather than a route.

Moving the money

Bank transfer is not your only option

The obvious route is an international wire from your own bank. It works, and for many buyers it is what they use.

It is worth knowing that it is not the only way, because a number of our clients do not use it.

Wise. Its Japanese entity, Wise Payments Japan K.K., is registered and authorised as a Type 1 and Type 2 Funds Transfer Service Provider with the Kanto Local Finance Bureau (registration number 00040), and is a member of the Japan Payment Service Association.

The Type 1 authorisation matters. It was granted in March 2023, and it removed the ¥1,000,000 per-transaction ceiling that had applied under the Type 2 registration Wise held from 2016. Transfers of up to ¥150,000,000 became possible, which is to say property-sized transfers became possible.

The practical effect is that money arrives in the recipient's Japanese bank account as an ordinary domestic transfer. From the seller's side it looks like any other payment.

We are not recommending one provider over another, and you should compare what actually arrives rather than what is advertised. But if you have been assuming that a bank wire is the only way to move this much money into Japan, it is not.

Timing

Transfers of this size are not instant. Allow several business days, and more if the receiving institution asks questions — which, at this size, it will.

Japanese banks are required to verify large incoming international transfers, and they may ask for the sale contract, evidence of the source of funds, and confirmation of the purpose. This is routine. It is also slow if you are not expecting it.

Start this before you need it. Buyers who begin arranging the transfer in the week before settlement discover that compliance review does not compress.

Source of funds

Have documentation ready showing where the money came from. Sale of another property, investment proceeds, inheritance, salary over time — whatever it is, the paper trail should exist before the transfer, not be assembled afterwards.

Funds arriving from a third party, or from an account in a name other than yours, will cause serious delay and may stop the transaction.

Financing

Non-resident buyers

Most Japanese banks will not lend to a borrower who does not live in Japan. The reasons are structural rather than discriminatory: enforcement against an overseas borrower is difficult, income verification is difficult, and the loan sits outside their normal risk framework.

There is one situation where this changes. If you already own a property in Japan and want to borrow against it, lenders willing to consider that do exist. It is a different proposition from financing a first purchase — there is an asset in Japan, its value is assessable, and security can be taken over it.

That is worth knowing if you are thinking about a second property, or about funding a renovation on one you already hold. It does not help with the first purchase.

Borrowing in your home country is often the better route. A drawdown against an existing property, or a facility secured on assets you already hold, converts the Japanese purchase into a cash purchase. This is what most foreign buyers actually do.

Residents with permanent residency

Permanent residents are generally treated as domestic borrowers. Standard products, standard rates, standard terms.

Residents without permanent residency

The difficult middle. Some banks will lend, with conditions — a Japanese spouse as co-signer, several years of tax filings in Japan, a larger deposit, or employment with a substantial employer.

Which institutions are open to this changes, and any list printed in a book will be wrong within a year. Ask an agent who is placing clients currently.

What lenders look at

Residency status first. Then income and its stability, then the property itself.

The property matters more in Japan than in some markets because the building depreciates. A wooden house past twenty-two years may be valued at land only, which limits what can be lent against it. A property that cannot legally be rebuilt is very hard to finance at all.

If financing matters to you, this constrains what you can buy — and it is worth knowing before you fall in love with a machiya.

The financing contingency

If you are borrowing, the contract should include a ローン特約 releasing you and returning your deposit if the loan is refused by an agreed date.

Confirm it is in the contract. Confirm the date is realistic. This clause is the difference between a failed loan application costing you time and costing you 10% of the purchase price.

Next: Chapter 11 — After you buy. Costs, management, renting, and the rules on short-term letting.