Move-in costs when renting
Renting in Japan often requires about four to six months’ rent up front when you sign.
| Item | What it is | Typical level (example) |
|---|---|---|
| Shikikin (deposit) | Security deposit, returned on leaving minus unpaid rent and restoration costs | 0–2 months’ rent |
| Reikin (key money) | A gift to the landlord; not refundable | 0–2 months’ rent |
| Agent fee (chukai tesuryo) | Real estate agent’s fee; legal cap is one month’s rent plus consumption tax in total (landlord and tenant combined), and without the tenant’s prior consent the tenant pays at most half a month plus tax | 0.5–1 month’s rent plus tax |
| Advance rent (maeyachin) | Rent for the move-in month (pro rata) and the next month | 1–2 months’ rent |
| Guarantor company fee | Used instead of a personal guarantor; usually mandatory | 50–100% of one month’s rent the first year, then about ¥10,000 a year |
| Fire insurance (kasai hoken) | Tenant’s contents and liability insurance | ¥15,000–20,000 for two years |
| Lock change, etc. | Lock replacement, disinfection, etc. | ¥15,000–30,000 |
Amounts are typical examples and vary by area and property. In parts of the Kansai region a fixed part of the deposit is kept by custom (shikibiki).
Costs while living there and when moving out
- Renewal fee (koshinryo): Leases are usually two years, and in the Tokyo area a renewal fee of about one month’s rent plus an admin fee is common. Many regions have no renewal fee.
- Management/common fees: A separate common-area fee is often charged, so compare properties on rent plus fees.
- Restoration (genjo kaifuku): Under the Ministry’s guidelines, normal wear and ageing — such as sun-faded wallpaper or furniture marks — is the landlord’s cost; only damage caused intentionally or negligently by the tenant is the tenant’s. Also check special clauses in the contract (e.g. cleaning fees).
- Notice to vacate: You usually give one month’s notice (two for some properties); if late, you pay rent for the difference. Check for early-termination penalty clauses.
Costs of buying
- Down payment (atamakin): Borrowing the full price with no down payment has become more common, but the smaller the down payment, the larger the balance, the interest and the exposure to rate rises.
- Closing costs (shohiyo): Stamp duty, registration tax, judicial scrivener fees, loan guarantee and admin fees, fire and earthquake insurance, agent fees (for used homes) and real estate acquisition tax. A common rule of thumb is 3–5% of the price for a new condo and 6–10% for a used home.
- Fixed asset tax and city planning tax: Levied by the municipality on the owner as of 1 January each year. Standard rates are 1.4% fixed asset tax and up to 0.3% city planning tax (on the taxable base). Residential land up to 200㎡ is assessed at 1/6 (1/3 for city planning tax). New homes get a relief halving the building’s tax (on up to 120㎡) for a period (3 years generally, 5 for condos); the FY2026 tax reform extended it by five years to homes built by March 2031 (homes built from April 2026 generally need 40–240㎡ of floor area).
- Management fee and repair reserve (condos): Condo owners pay a monthly management fee and a repair reserve for major works. Reserves often start low and step up, so review the long-term repair plan.
- Repairs for detached houses: You must fund exterior, roof and equipment replacements yourself; there is no monthly collection as with condos, but the costs still come.
Housing loan tax credit and interest-rate risk
Buying with a loan for move-in between 2026 and 2030 lets you deduct 0.7% of the year-end balance from tax for up to 13 years (10 years for ordinary used homes). Limits depend on energy performance and household type; see the Japan home loan guide for the full table.
With a variable rate you bear the risk of rises. For a ¥45m, 35-year loan, the monthly payment is ¥127,029 at 1.0% and ¥149,068 at 2.0%. Renting carries no rate risk, but rent increases and renewal terms are negotiated with the landlord.
Ten years of spending: an example
All figures below are assumptions for illustration. Real results vary widely with location, property, rates and tax.
Buying costs more but part of it builds equity through principal repayment; renting costs less but leaves no asset. Whether the sale price after ten years is above or below the loan balance plus selling costs can reverse the outcome. In Japan, buildings tend to lose value quickly over time, so land and location matter a lot.
| Item | Renting (¥150,000/month) | Buying (¥50m condo) |
|---|---|---|
| Up front | Move-in costs about ¥700,000 (assumed 4.5 months’ rent) | Down payment ¥5m + closing costs about ¥3.5m (assumed 7%) |
| Monthly | Rent ¥150,000 | Loan ¥127,029 (assumed ¥45m, 35 years, 1.0%) + management and repair reserve ¥35,000 |
| Periodic | Renewal fee ¥150,000 × 4, fire insurance ¥20,000 × 5 | Fixed asset and city planning tax assumed ¥150,000 a year |
| 10-year total (approx.) | About ¥19.4m | About ¥29.44m (excluding the housing loan credit) |
| What you have after 10 years | Nothing (free to move) | The home (market value unknown) and a loan balance of about ¥33.71m |
The buying column includes about ¥11.29m of principal repaid over ten years. Rate changes, rent rises, repair reserve increases, price changes and the housing loan credit are not included.
Renting as a foreigner
- Guarantor companies: Foreigners often cannot find a personal guarantor in Japan, so guarantor companies are standard. Some specialise in foreign tenants or offer multilingual support.
- “Foreigners OK” (gaikokujin-ka) listings: Some landlords are reluctant to rent to foreigners, so filtering portals for “foreigners OK” helps. Prepare your residence card, proof of employment or enrolment, and proof of income.
- Japanese-language contracts: The explanation of important matters and the contract are in principle in Japanese. The Ministry publishes a multilingual guidebook for foreign tenants; make sure you understand the restoration and notice clauses before signing.
- After moving in: Register your address at the municipal office within 14 days, and follow building rules such as garbage sorting and noise.
FAQ
How can I reduce move-in costs?
Look for zero-deposit/zero-key-money listings, discounted agent fees or “free rent” periods. But these often come with cleaning-fee clauses or early-termination penalties, so read the contract.
Do I have to pay the renewal fee?
Japan’s Supreme Court ruled in 2011 that a renewal fee clearly stated in the contract and not excessively high is valid. In practice, check the clause and negotiate before signing.
Can foreigners buy property in Japan?
Japan does not in principle restrict property purchases by foreigners, regardless of visa status. The hard part is financing: without permanent residency, mortgage approval tends to be difficult.
Is renting or buying better?
There is no single answer. It depends on how long you plan to stay, the chance of relocation or returning home, your capacity to absorb rate rises and the size of your down payment. Run your own numbers for 10 and 20 years of spending and remaining assets, as in the table above.
Basis and sources
- Ministry of Land, Infrastructure, Transport and Tourism — Guidelines on restoration to original condition
- Ministry of Land, Infrastructure, Transport and Tourism — Support for foreign nationals looking for rental housing (multilingual guidebook)
- Ministry of Internal Affairs and Communications — Overview of fixed asset tax (rates, residential land relief)
- Ministry of Finance — Outline of the FY2026 tax reform (new-home fixed asset tax relief extended five years)
- National Tax Agency No.1211-1 — Housing loan tax credit (new homes)
- Flat 35 official site (Japan Housing Finance Agency) — rates and repayment simulation