Published on and written by Cyril Jarnias
Buying property in Japan is increasingly attracting foreign investors. The country combines political stability, legal security, and a real estate market driven by major urban projects. Tokyo, Osaka, and Fukuoka are at the heart of this dynamic, each with a very different investment profile in terms of yield, price, and capital appreciation potential.
This guide summarizes key information for investing in Japan in 2026: recommended locations, expected returns, financing options, and rules to follow for standard rentals and short-term rentals (minpaku). The data comes from recent studies, reinterpreted clearly and operationally.
Legal Framework: What Every Foreign Investor Must Know
The first key point is simple: Japan does not discriminate against foreign buyers. There are no quotas, special permits, or residency requirements to acquire property, whether it’s an apartment, house, or land in full ownership.
A non-resident can freely purchase a condominium in the 23 wards of Tokyo, a rental building in Osaka, or a studio in Fukuoka, with no size limits or obligation to live there. The Constitution and Civil Code make no distinction between Japanese and foreign owners in terms of property rights.
Buying property in Japan does not grant any visa or residency rights. To live there, a standard residence permit (work, spouse, business, etc.) is required, as Japan does not have a “golden visa” linked to real estate investment.
Since 2026, the system has tightened not on ownership itself, but on transparency. Any new land registry entry must state the owner’s nationality, whether an individual or a company. This information remains in the administration’s internal database and does not appear on public registry extracts. The goal is traceability, not exclusion.
For non-residents, any real estate purchase is considered a capital transaction under the Foreign Exchange and Foreign Trade Act (FEFTA). You must file a post-acquisition report with the Bank of Japan within 20 days of the purchase. This formality applies to all types of acquisition (second home, investment, primary residence) and, although it has never been used to block a purchase, it is mandatory.
Another point of caution: around certain sensitive facilities (Self-Defense Force bases, nuclear plants, coast guard stations, border islands), “surveillance zones” exist. Again, these are not purchase bans, but enhanced controls. Prior notifications may be required for large land areas, regardless of the future owner’s nationality.
Purchase Process: Steps and Documents for Residents and Non-Residents
The purchase process in Japan is highly structured and typically takes between 60 and 90 days from offer to final registration. The steps are fairly standardized nationwide, whether buying in Tokyo, Osaka, or Fukuoka.
Before signing a real estate sales contract in Japan, the professional must provide and explain the “Explanation of Important Matters” (Jūyō Jikō Setsumeisho) document, which details the property’s legal situation (easements, mortgages, zoning compliance, condominium rules). Ask all your questions at this stage, ideally with a translator or bilingual agent if you don’t read Japanese.
For residents in Japan (with residence status), required documents include a certificate of residence (jūminhyō), a residence card (zairyū card) or permanent resident certificate, income proof, and, if financing, a registered seal (jitsuin) and its certificate. For non-residents, a signature replaces the seal: a notarized affidavit from the country of origin is used, along with a certified copy of the passport, which may require an apostille depending on the country.
A non-resident must appoint a local representative via a power of attorney to sign, manage the final payment, receive tax notices, and act as a tax representative in Japan, as authorities only send correspondence to a domestic address.
Additional Costs at Purchase
Acquisition costs in Japan represent about 5 to 6% of the price for a cash purchase, and an additional 1 to 2% if bank financing is used. They break down as follows:
| Cost Item | Approximate Amount / Indicative Rate |
|---|---|
| Agency commission (over ¥4 million) | 3% of price + ¥60,000 + consumption tax |
| Stamp duty on contract | ≈ ¥10,000 to ¥480,000 (depending on price) |
| Registration tax (property transfer) | Land 1.5% — Building 2% (possible reduced rates) |
| Acquisition tax | Generally 3 to 4% of assessed value, sometimes reduced to 3% for residential |
| Judicial scrivener (shihō shoshi) fees | Variable, often 0.4 to 2% of taxable value |
The reference value used for certain taxes (acquisition, property) is the assessed value, usually estimated at between 50% and 70% of the market price. An acquisition tax notice typically arrives three months to a year after the transaction.
Taxation: What a Property Held from Abroad Earns and Costs
Once a property owner, a foreigner is subject to the same local taxes as a Japanese national. Two annual taxes are unavoidable: the fixed asset tax at 1.4% of the assessed value, and the city planning tax at up to 0.3% in planning zones. In most Tokyo wards and Osaka, both apply, resulting in an effective rate of about 1.7%.
Non-residents must appoint a tax representative (nōzei kanrinin) in Japan. Tax notices are sent to a local address, and the representative handles payments and filings. Without this, you risk unknowingly accumulating unpaid taxes, complicating any future sale.
In terms of income tax, a non-resident is only taxable in Japan on Japanese-source income: rents, capital gains from real estate, etc. To secure collection, Japan broadly applies a withholding tax system. A buyer who acquires a property from a non-resident seller must generally withhold 10.21% of the price and remit it to the tax authority; the seller receives the remaining 89.79% and later settles via declaration. Similarly, when a tenant pays rent to a non-resident owner, a withholding of 20.42% may apply, remitted by the payer to the tax office.
High tax rate on capital gains from resale for a non-resident who has owned the property for less than five years
For U.S. taxpayers, an additional layer of reporting applies: rental income and capital gains from Japanese properties must be reported to the IRS, even though the real estate itself does not fall under FBAR requirements. However, linked Japanese bank accounts could trigger reporting obligations if their balances exceed certain thresholds.
Financing: How Much Leeway for a Foreign Buyer?
On paper, nothing prevents a Japanese bank from lending to a foreigner. In practice, most major institutions require permanent resident (PR) status or, failing that, a Japanese spouse or a sufficiently long period of residence that entitles one to apply for PR.
Real estate loans are strictly regulated. Most banks require:
| Criteria | Typical Requirement |
|---|---|
| Age at application | Minimum 20, often < 65–69 |
| Age at maturity | Repaid by age 75–80 |
| Employment history | 2 to 3 years of continuous employment |
| Minimum annual income (resident) | ¥2 to ¥5 million depending on the bank |
| Annual income for investment loan | Often ≥ ¥7 million |
| Standard down payment | 20% of price |
| Down payment for non-PR | 30 to 50%, sometimes more |
| Debt-to-income ratio | Targeted between 25% and 35% |
Rates remain low by international standards, even after the recent rise in bond yields: variable-rate loans are roughly between 0.55% and 1%, 10-year fixed rates around 2.2–2.8%, and government-backed “Flat 35” loans around 2.3–2.5%. For eligible foreign investors, conditions between 1.3% and 2.5% are common.
Non-residents rarely obtain local credit; they often pay in cash or go through a foreign bank with a Japanese branch. Another method is to set up a Japanese company (GK or KK) that takes out a professional loan for the purchase, which requires understanding local accounting and assuming structural costs.
A few institutions are more open to foreigners: SMBC Trust Bank PRESTIA, SBI Shinsei, Suruga Bank, AEON Bank, Tokyo Star Bank, or some Chinese banks (Bank of China, Bank of Communications) explicitly target a non-Japanese clientele, sometimes with English services. But even for them, a stay in Japan and stable local income are often still essential.
Yields and Strategy: How Do Tokyo, Osaka, and Fukuoka Compare?
Before zooming in on each city, keep in mind national benchmarks. The average gross rental yield in Japan is around 4.2–4.5%. Most foreign investors aim for a minimum gross yield of 4.5–5% for a long-term rental investment. Yet Tokyo, Osaka, and Fukuoka sit at very different levels.
The difference between gross yield and net yield is significant: once management fees, expenses, reserve funds, vacancy, and local taxes are deducted, the net yield is typically 30 to 45% lower than the gross. A 6% gross yield easily becomes 3.5–4% net, which must be factored into the business plan from the start.
Tokyo: Premium Market, Compressed Yields but Strong Capital Appreciation
Tokyo, and especially the 23 central wards, is first and foremost a capital appreciation market. Prices per square meter are the highest in the country, liquidity is exceptional, and the risk of vacancy is extremely low in well-served neighborhoods.
Recent figures show:
| Indicator (Tokyo 23 wards) | Approximate Value / Trend |
|---|---|
| Median condo price (23 wards) | ≈ ¥1.05–1.40 million/m² |
| Typical gross yield | 2.5–3.5% (some cases up to 5.2%) |
| Recent annual price growth | 5–8% depending on area |
| Rent per m² (mid-2025) | ≈ ¥4,800/m² for condos |
| Rent growth (23 wards) Q3 2025 | +7.8% year-on-year |
In premium wards like Minato, Chiyoda, or Shibuya, gross yields hover near the bottom of the range, around 3%, as the location premium comes at a high cost. But these areas also concentrate the strongest price acceleration, with projections of an additional 5 to nearly 6% rise in 2026 after a surge close to 30% in 2025 in the prime segment.
The combination of rent and value appreciation can reach 12% total annual return in Tokyo’s best neighborhoods over 5 to 10 years.
In a ward like Kōtō, for example, a studio of about ¥30 million can generate a gross yield of around 3.6%, with a net yield close to 2.7%. This is far from the 6–7% gross yields sought by “income” investors, but it offers liquidity and resilience.
Osaka: Balanced Yield/Growth and Expo Effect
Osaka occupies a middle ground between Tokyo and Fukuoka. Prices are significantly lower than in the capital (often 40 to 60% lower for comparable quality), while rents remain dynamic, pushing yields upward.
Commercial property values in the Osaka region have increased by 8.5% year-on-year for the fourth consecutive year.
For residential, we observe:
| Indicator (Osaka City, central areas) | Indicative Value |
|---|---|
| Condo price (Kita / Chūō) | ≈ ¥700,000–950,000/m² |
| Gross yield (long term) | ≈ 3–4.5% (central) |
| Gross yield (studios, student areas) | 4.5–7%; sometimes 7% in favorable cases |
| Typical 25 m² price – Kita (Umeda) | ≈ ¥15–22 million, yield 5–6.5% |
| Typical 25 m² price – Chūō (Namba) | ≈ ¥12–20 million, yield 5.5–7% |
Rents are rising strongly: for family housing (50–70 m²), the average rent shot up by nearly 13.7% in one year, a rise twice as fast as in Tokyo’s 23 wards, strengthening the market’s yield profile.
At the same time, the Grade A office market in Osaka shows a vacancy rate declining to around 2.2%, rents increasing by nearly 14% year-on-year, and a very limited pipeline of new deliveries, illustrating the overall strength of demand in the city center.
Osaka is thus considered a “balanced” market, offering a dual profile: better profitability than Tokyo (often 5–7% gross on well-located studios) and significant price growth prospects, especially in central wards (Kita, Chūō, Nishi, Naniwa) where annual growth projections are around 3–6%, with some areas like Namba/Shinsaibashi potentially gaining 8–12% over three years.
For a foreign investor, Osaka is the natural candidate for a “two-city” strategy: Tokyo for appreciation and exit liquidity, Osaka for cash flow generation.
Foreign investor
Fukuoka: Yield Champion, Growth Fueled by Tech and Major Projects
Fukuoka, smaller than Tokyo and Osaka, is nevertheless the city increasingly attracting savvy investors, particularly foreigners. It is the hub metropolis of Kyūshū, with dynamic demographics, a strong positioning as a “Startup City,” and a development strategy focused on technology and quality of life.
Recent figures are telling:
| Indicator (Fukuoka City) | Indicative Value |
|---|---|
| Average condo price (city) | ≈ ¥500,000–700,000/m² |
| Average gross yield | ≈ 4.2–5% (citywide) |
| Typical gross yield for investors | 6–8% in practice, up to 10% on certain assets |
| Net yield Hakata-ku studios | ≈ 3.58% (4.97% gross) |
| Net yield Chūō-ku studios | ≈ 3.24% (4.5% gross) |
| Annual price growth (Fukuoka City) | ≈ 9% |
| Average price per m² (prefecture, Feb. 2026) | ≈ ¥246,500/m² |
Yield data shows Fukuoka leading the national ranking among major cities, with average gross yields around 6–8%, while Tokyo frequently caps at 3–4% and Osaka at 4.5–6.5%. On some entire buildings, yields above 10% can still be found, making it a prime ground for income and value-add investors.
The city benefits from strong land price growth: in 2026, residential land rose by about 10% on average, and prime commercial areas sometimes exceeded +12%. Major urban redevelopment projects play a central role, particularly Tenjin Big Bang and Hakata Connected, which are transforming the Tenjin and Hakata Station areas into hubs of high-end offices, retail, and leisure.
Focus on Fukuoka: Maps, Neighborhoods, and Opportunities
Fukuoka stands out with highly differentiated sub-markets. For a foreign investor discovering the city, it is useful to distinguish the main axes: Tenjin and Chūō-ku, Hakata-ku, Sawara-ku, and the waterfront (Momochi).
Tenjin, Daimyō, Yakuin, Ōhori: The “Premium Heart” of Chūō-ku
The Chūō ward is the premium heart of Fukuoka. The Tenjin‑Daimyō‑Yakuin‑Ōhori area concentrates the highest transactional activity, the highest rents, and the strongest growth prospects.
Key figures:
| Area / Parameter | Key Data |
|---|---|
| Average price Chūō-ku | ≈ ¥617,100/m² |
| Studio rent | ≈ ¥60,700 / month |
| 1LDK–2DK rent | ≈ ¥151,300 / month |
| Large apartment rent | Up to ≈ ¥246,800 / month |
| Price increase (last 3 years) | ≈ +15–25% in some areas of Ōhori, Ropponmatsu |
| Tenjin (condos) – median price | ≈ ¥420,000/m², price +19% over 3 years |
Tenjin is Kyūshū’s largest commercial district, a tertiary hub, shopping district, and transport hub. Offices of many tech companies, including players like Line and Mercari, have strengthened rental demand, especially for modern studios and 1-bedroom units. Gross yields on well-located small units can reach 5.5–7%, while benefiting from strong resale liquidity.
In Tenjin, Daimyō is a lifestyle neighborhood with boutiques, cafés, and high-end residences, where prices reach ¥500,000 to ¥600,000/m² for lower yields but strong appreciation potential. Ōhori and Ropponmatsu, around the large park and the repurposed former Kyushu University campus, show price increases of +15 to +25% over 2–3 years and remain very popular with families.
Hakata-ku: Transport Hub and Rental Driver
Hakata‑ku is the other pillar of the Fukuoka market. It is the area of the Shinkansen station, bus terminal, and part of the hotel supply. It concentrates flows of business travelers, inter-prefectural students, and tourists, with direct connections to the recently expanded airport (second runway opened in 2025).
| Indicator (Hakata-ku) | Indicative Value |
|---|---|
| Average price per m² | ≈ ¥452,100/m² |
| Studio rent | ≈ ¥67,800 / month |
| 1K / 1DK rent | ≈ ¥57,400 / month |
| Family apartment rent | Up to ≈ ¥171,400 / month |
| Net yield studio (e.g.) | ≈ 3.58% for 4.97% gross |
The Hakataekimae area (facing the station) has recorded over 140 recent transactions, a sign of a very liquid market. Demand comes as much from frequent business travelers as from expats and students. For an investor, Hakata‑ku is one of the best entry points for studios or 1LDKs, with a very competitive yield/liquidity combination.
Sawara-ku, Momochi, and Residential Neighborhoods
Sawara‑ku offers an interesting compromise between price and quality of life. More residential, with easy access to the center and coast, it attracts families and workers seeking slightly more spacious homes.
| Indicator (Sawara-ku) | Indicative Value |
|---|---|
| Average price per m² | ≈ ¥520,100/m² |
| Studio rent | ≈ ¥55,500 / month |
| Family rent | Up to ≈ ¥230,400 / month |
On the waterfront, Momochi clearly positions itself in the high-end segment: residential high-rises with sea views, Fukuoka Tower, tourist attractions, a new 20-story Prince Hotel expected in 2026. Rents for large apartments or family houses range between ¥150,000 and ¥250,000 per month, with gross yields of 4 to 6%, but a lower risk profile thanks to lasting appeal for affluent households.
Fukuoka offers a varied playing field: micro-neighborhoods undergoing gentrification (Imaizumi, Nishijin, Hirao, Yakuin) for value-add on older buildings, prime areas (Tenjin, Hakata, Momochi) well-equipped with infrastructure, and emerging zones like Hakozaki where cafés and shops replace older housing, with prices around ¥500,000/m² suitable for renovation projects.
Tokyo vs Osaka vs Fukuoka: A Concise Comparison for Foreign Investors
To choose between these three cities, it is useful to think in terms of investment profile rather than an “absolute best city.” An investor seeking wealth stability and global liquidity will not make the same decision as one focused on cash flow and upgrading transitioning neighborhoods.
The table below summarizes the major differences between the compared elements, offering a clear and structured overview.
| Criteria | Tokyo (23 wards) | Osaka (city) | Fukuoka (city) |
|---|---|---|---|
| Positioning | Premium market, capital gain | Balanced yield/growth | High yield, developing market |
| Price per m² (condos) | ≈ ¥1.05–1.40 million/m² | ≈ ¥700,000–950,000/m² | ≈ ¥500,000–700,000/m² |
| Typical gross yield | 2.5–3.5% (up to 5.2% in some cases) | 3–4.5% central; 4.5–7% on targeted studios | 4–6% average; 6–8% common, >10% possible |
| Recent price growth | ≈ 5–8% per year (prime ≈ +30% in 2025) | ≈ 2–6% depending on area | ≈ 9% for city; land +10–12% |
| Rental vacancy | Very low in center | Low in center; strong corporate demand | Low in hubs (Tenjin, Hakata, Chūō) |
| Typical investor profile | Wealth, long term, easy exit | Mix yield/capital gain, “2-city” strategy | Income and value-add, seeking high yields |
For an international portfolio, a combination can make sense: a small apartment in Tokyo for safety and exit, one or two studios in Osaka for solid rental income, and a building or several small units in Fukuoka to boost overall yield.
Short-Term Rentals (Minpaku): Opportunities and Pitfalls, Especially in Osaka
Many foreign investors consider Japan via short-term rentals, boosted by tourism. But the legal framework for minpaku has become very technical, particularly in Osaka where 2026 developments mark the end of a period of relative ease.
The basic regime, under the Private Lodging Business Act (Minpaku Law) of 2018, allows up to 180 days of rental per year after registration with the municipality. This cap remains valid everywhere, unless you hold a hotel-type license or a special “strategic zone minpaku” (tokku) status.
Obligations include:
– formal registration and business number displayed on listings,
– a detailed guest register with identity, address, nationality, and passport number for foreigners,
– fire safety equipment (extinguishers, detectors, emergency lighting),
– neighbor complaint management, hygiene procedures, and bimonthly occupancy reports to be submitted by the 15th of even-numbered months.
If the owner does not live on site, the law requires a minpaku management company. It handles check-ins/outs, cleaning, administrative follow-up, and relations with authorities, for 25 to 35% of revenue.
Osaka’s Special Case and the End of “Easy Tokku Minpaku”
Osaka long was the minpaku gold rush thanks to the tokku minpaku regime, a national scheme applied in certain strategic zones (including all of Osaka City), allowing 365-day operation with a minimum of two nights (2 nights / 3 days), with no annual cap. It was enough to have the property certified by the municipality to bypass the 180-day limit.
But as of late May 2026, Osaka City stopped accepting new tokku minpaku applications, quickly followed by 29 of the other 34 municipalities in the prefecture. The governor clearly stated his intention to phase out this scheme in the post-Expo context, after years of resident complaints about nuisances and waste management.
The consequences for a foreign investor are clear:
It is now impossible to convert a new property in Osaka City into a tokku minpaku. Only properties already certified before the suspension can continue, under increased scrutiny. The “easy” year-round rental regime is closed to new entrants in the city, who must revert to the national framework (180 days/year) or aim for a proper hotel or ryokan license.
Existing operators are now targets of specialized control teams (“Nuisance Minpaku Eradication Team”) who can revoke licenses more quickly in case of problems (safety, neighbor issues, non-compliance with the minimum two-night stay, etc.). For the investor, an existing tokku thus has real market value, but must be scrutinized for regulatory risk and management seriousness.
Outside Osaka City, a few municipalities in the prefecture (Kaizuka, Izumisano, Habikino) still maintain the active scheme, as do other designated cities like Kitakyushu or Ōta‑ku in Tokyo. But the trend is clear: the state and local authorities are moving toward a strict control model, with fewer and fewer exceptional zones open to new applications.
Tokyo and Fukuoka: Caution and Local Adaptation
In Tokyo, Ota‑ku is one of the few wards that has adopted the tokku regime, but the majority of the city operates under the 180-day framework, often further restricted by municipal regulations (e.g., bans on weekdays in certain residential areas). Added to this is a major obstacle: about 99% of condominium rules explicitly prohibit Airbnb-style rentals, making most apartments ineligible for minpaku.
In Fukuoka, minpaku activity is concentrated on individual houses or small buildings near the waterfront or tourist sites; in Kitakyushu, tokku minpaku is permitted. The foreign investor must always check these points.
– the municipality’s own rules (authorized days, neighborhood limits),
– the condominium rules (for buildings),
– technical feasibility (fire safety, accessibility),
– and the ability to engage a licensed management company at a cost compatible with the business plan.
In 2026, short-term rentals in Japan are no longer a “simple” strategy for passive investors. It requires fine-tuned compliance management, under penalty of severe sanctions that could go as far as losing the license, or even visa complications for foreign operators not in good standing.
Building an Investment Strategy: Some Practical Benchmarks
For a foreign investor looking to enter the market of Tokyo, Osaka, or Fukuoka in the coming years, a few guidelines emerge from the analysis of data and regulatory developments.
First, it is crucial to clarify the priority between yield and appreciation. If the goal is to secure a wealth asset in a large liquid metropolis, Tokyo (and, to a lesser extent, the central areas of Osaka) are the favorites, at the cost of modest yield. If the goal is solid cash flow, Fukuoka or certain Osaka neighborhoods offer gross yields of 6 to 8%, or even more on properties needing renovation.
High yields (8-10% gross) are often associated with secondary areas or older properties, increasing risks of rental vacancy and slow resale. In Fukuoka, attractive yields are available in the central wards of Hakata and Chūō, unlike in Tokyo and Osaka.
Third benchmark: finance. Credit conditions are attractive, but access to loans remains restricted for non-residents. Before searching for a property, it is advisable to discuss with two or three “friendly” banks to clarify borrowing capacity, loan-to-value ratio, and required down payment. It is often wise to open an account with a bank open to foreigners (such as SBI Shinsei or SMBC Prestia), domicile income flows, and build a relationship for 6 to 12 months before submitting a loan application.
For a mistake-free purchase in Japan, it is essential to be accompanied by a real estate agent specializing in foreign clients, a tax advisor who speaks English or French, and a shihō shoshi experienced in non-resident transactions. This avoids declaration omissions (FEFTA), hidden extra costs (taxes, condominium fees, compliance updates), and procedural errors.
Finally, in the era of enhanced transparency, all flows (purchase, standard rental, short-term rental, resale) are increasingly tracked. This does not reduce the rights of foreign investors, but increases the importance of being impeccable on compliance. Investing in Japan in 2026 means investing in an open market, but managed like a mature economy: very accessible, provided you accept to play by precise and well-enforced rules.
In this context, Real Estate in Tokyo, Osaka, and Fukuoka: A Guide for Foreign Investors is not just a slogan, but a faithful summary of three complementary entry points into the same market. Tokyo for depth and prestige, Osaka for balanced yield/growth, Fukuoka for the rare combination of high yields and sustained urban growth. The final choice depends less on the “best number” than on the coherence between city, neighborhood, rental strategy, and each investor’s risk profile.
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Cyril Jarnias is an independent expert in international wealth management with over 20 years of experience. As an expatriate himself, he is dedicated to helping individuals and business leaders build, protect, and pass on their wealth with complete peace of mind.
On his website, cyriljarnias.com, he shares his expertise on international real estate, offshore company formation, and expatriation.
Thanks to his expertise, he offers sound advice to optimize his clients' wealth management. Cyril Jarnias is also recognized for his appearances in many prestigious media outlets such as BFM Business, les Français de l’étranger, Le Figaro, Les Echos, and Mieux vivre votre argent, where he shares his knowledge and know-how in wealth management.
