Owning a Property in Niseko, Furano and Rusutsu!

Niseko has a good number of operating management companies to choose from. However, as it is most likely that your new property acquisition is already managed, we recommended to remain with this company for the immediate future, allowing yourself time to make a more informed and experienced decision – unless of course you have a specific reason for changing.

Services generally includes:

• Reservations
• General maintenance
• Utilities & other bill payments
• Snow clearance
• Cleaning and laundry
• Accounting and Tax services
• A concierge service may also be provided by certain management companies.

Typically, management fees total circa 35% of the nightly rate plus an annual expenses fee.

These fees breakdown as follows:

• 10% Management fee of gross rental income - covers managing owner’s accounts and reports, paying all utilities and other charges
• 25% Letting Management fee of gross rental income
• Utilities and other outgoing expenses (e.g. maintenance, cleaning, insurance, tax) are paid for by owners. This represents an estimated 20% to 30% of gross rental income.

In order for properties to generate the healthy returns typically enjoyed in Niseko, owners and direct family will generally be allowed a minimum of 14 nights in winter and 14 nights in summer usage. A management fee of circa 10% of the rack rate is usually applied to additional stays. Different developments have different policies and as such Nisade recommends buyers request and understand the specific policy of their chosen development to ensure they make an informed decision.

No commission is typically charged on the sale of off-plan developments.

For secondary market properties and land acquisitions, commission is 3% of the agreed sale price. A flat fee of 60,000 yen will added to the cost if contracts are signed here in Japan. However, if contracts are signed off-shore there is no additional cost.

Nisade Real Estate recommends buyers account circa 5% of the agreed sales price for purchase related costs. Typically, these purchase associated costs amount to less, especially for land purchases.

Associated costs for property acquisitions include the following:

Stamp Duty – 2 kinds:

1. Contract Stamp Duty – calculated based on the sales value of the property (paid by both buyer & seller)

• ¥20,000 for properties valued @ ¥10m - ¥50m JPY

• ¥60,000 for properties valued @ ¥50m - ¥100m JPY

• ¥100,000 for properties valued @ ¥100m - ¥500m JPY

2. Stamp Duty Registration – calculated based on the local council’s value of the land and building (1.5% of land value + 2% of building)

Solicitor’s fees – calculated based on the agreed sales price – charged @:

• ¥157,500 for sales price under ¥50m JPY

• ¥210,000 for sale price greater than ¥50m & under ¥100m JPY

• ¥262,500 for sales price greater than ¥100m & under ¥150m JPY

(These fees increase by ¥50,000 JPY for every ¥50m JPY above ¥150m JPY)

Property Acquisition Tax – calculated based on the local council’s value of the property @ 3% for land & 4% for building (generally equates to circa 1% of agreed sales price)

Bank Charges – associated bank charges for wire transfers to and from solicitor account paid by the buyer

Sales commission – 3% of agreed sales price

Contracts are registered in Japan by local solicitor firm Satoshi Yoshida

Solicitor Fee

Vary depending on the size of the transaction.

Calculated based on the agreed sales price & charged @:

• ¥165,000 for sales price under ¥50m JPY
• ¥220,000 for sale price greater than ¥50m & under ¥100m JPY
• ¥275,000 for sales price greater than ¥100m & under ¥150m JPY

(These fees increase by ¥50,000 JPY for every ¥50m JPY above ¥150m JPY)

Title Registrations Stamp Duty

Calculated based on the local council’s value of the land and building (typically much less than the agreed sales price)

• 1.5% of land value +
• 2% of building

Acquisition Tax

• Calculated @ 3% for the land and 4% of the building, based on the local council’s value of the property
• Generally, equates to circa 1% of agreed sales price

Annual Fixed Assets Tax in Japan

• Calculated @ 1.4% of the local council’s property value. Payable pro-rata for the year of purchase

Financing

• On the whole, finance is not available to foreign investors who do not hold Japanese residency
• Recently however, some financial institutions in buyers’ home country have offered financing. Nisade Real Estate recommends exploring all avenues open to buyers in their home country and/or country of residence
• Some new developments may offer financing - please contact us for information

Freehold Title

• 100% free hold title
• No restrictions on foreign ownership

How long does it take to buy property?

• 4-6 weeks is the standard timeframe for transfer of ownership in the Niseko resort area
• This timeframe can be shortened or lengthened as required and requested

Offer & Acceptance

Once a buyer has decided on the property they wish to acquire:

• An offer is made by the buyer and communicated to the vendor
• The vendor will either except, decline or counter
• Once the offer is accepted by the vendor
• A purchase price and payment schedule is agreed upon by both parties (deposit & settlement amounts – typically 20% & 80%)

Contract Settlement

• The Japanese legal office couriers the buyer Power of Attorney and Statutory Declaration documents for the buyer to sign, have notarized and return
• Nisade Real Estate emails the buyer settlement payment information for the property purchase
• Buyer transfers payment of the settlement balance and related charges on settlement day

Title Transfer & Ownership

• The Japanese legal office sends the title to the Title Registration Office
• The legal office couriers the new title naming the buyer as owner to the buyer
• Nisade Real Estate couriers the sales agreement and Statement of Important Matters documents to the buyer