Homeowners Association in Japan: A Guide for Property Owners

Yes, Japan has homeowners associations. Most condominium owners must join one by law.

Japan remains a popular choice for property investment. It offers diverse opportunities for residents and overseas buyers alike.

If you just bought a condominium or an apartment in Japan, you need to understand homeowners association fees in Japan. This guide breaks down what these fees cover, and what else you'll pay.

We cover repair reserve funds, disaster insurance premiums, fixed asset tax (固定資産税, Kotei shisan zei), and city planning tax (都市計画税, Toshi keikaku zei).

What is a homeowners association in Japan?

When you buy a condominium or an apartment in Japan, you generally join a homeowners association. This is also called the building management association (管理組合, Kanri Kumiai).

This management association maintains common areas. Unit owners also make decisions about the building together.

Under Japan's Sectional Ownership Law, unit owners in the same condominium complex must jointly manage shared spaces. Every unit owner needs to be part of this association.

How this differs from a US HOA: Japan's system mainly covers condominium buildings, not detached-house neighborhoods. A US-style HOA often governs entire subdivisions of single-family homes; a Japanese kanri kumiai typically governs one building.

Generally speaking, detached houses in Japan don't have a homeowners association. If you bought an Akiya house, a free house, or any property in general, you might join a neighborhood association (自治会, Jichikai) instead. This isn't mandatory. It focuses on community events, disaster preparedness training, and neighborhood safety, not building upkeep.

Fees are small: most neighborhood associations charge around 200 to 400 yen a month.

Homeowners' associations, on the other hand, must hold at least one general meeting a year. Japan's Building Unit Ownership Act requires this, and it's where owners vote on fee changes and repair plans.

Is there a fee?

Fees and taxes at a glance

If you own a condominium or an apartment, you pay homeowners association fees. These are also called maintenance fees or management fees (管理費, Kanrihi).

You'll typically pay two charges to the management association: the management fee and the repair reserve fund. The management fee covers day-to-day operational and administrative costs. The repair reserve fund covers major work down the road.

The management fee usually covers:

• Cleaning for common areas

• Electricity and water bills for common areas

• Labor costs for management staff

• Regular inspections

• Maintenance costs for elevators and water tanks

• Fire and casualty insurance for common areas

• Landscaping and shared facility maintenance

Homeowners association fees sometimes include neighborhood association fees. These are two separate associations. The homeowners association maintains the building and is legally required. The neighborhood association supports community events and safety, and it's voluntary.

How much does it cost?

Japan's Ministry of Land, Infrastructure, Transport and Tourism runs a nationwide condominium survey every five years. Its 2023 survey results put the average management fee at 11,503 yen per month per unit, up from 10,862 yen in the 2018 survey.

Your management fees depend on your apartment's size and building type. Single-building condominiums average 11,580 yen per month; multi-building complexes average 10,394 yen per month.

Most condominium management fees fall between 10,000 and 20,000 yen per month. Fees also get reviewed periodically, and your management association can vote to adjust them every few years.

Additional fees to think about

There are other ongoing and one-time fees that property owners should keep in mind.

Repair reserve fund

Condominium and apartment owners pay into a repair reserve fund for future building repairs. This fund covers major repairs, which happen every 12 to 18 years.

The national average repair reserve fund is 13,054 yen per month, per Japan's 2023 Comprehensive Survey Results of Condominiums (Ministry of Land, Infrastructure, Transport and Tourism). That's up from 11,243 yen in the 2018 survey, roughly a 16% increase.

New and old buildings charge different repair fees. Older buildings tend to face higher repair costs, since more systems need replacing.

Individual buildings often range from about 5,000 to 15,000 yen per month, though the national average sits higher, around 13,054 yen. Japan's Ministry of Land, Infrastructure, Transport and Tourism provides guidelines for condominium management and recommends a long-term repair plan covering at least 30 years.

Disaster insurance premium fee

Fire insurance and earthquake insurance are insurances that cover damage caused by fire or earthquake in the private areas owned by condominium owners. If you also subscribe to personal liability insurance or have a special clause, you can also cover damage to the floors below caused by water leaks caused by the private areas owned by condominium owners.

Financing your purchase

Many overseas buyers borrow money from a Japanese bank to fund their purchase. Getting a loan can be harder without permanent residency.

Some local Japanese banks require a permanent residence visa before they'll lend to foreign buyers. Other specific banks work with non-residents, usually at higher rates or with a larger down payment.

Talk to a few banks early. Loan terms vary widely, and knowing your options helps you plan your purchase funds before you sign anything.

Fees and taxes upon real estate purchases

When purchasing real estate in Japan, including condominiums and apartments, you'll face several one-time costs. These property purchase costs come on top of your sales price.

Expect these fees and taxes:

• Real estate agent commission, typically 3% of the sales price plus 60,000 yen

• Real estate acquisition tax, around 3% of the property's assessed value, not the purchase price

• Registry license tax for registration

• Stamp duty

• Judicial scrivener fees, typically 50,000 to 150,000 yen

• Consumption tax, levied on the building portion only

• Settlement money, usually around 10% of the price, paid when you sign the sales contract

• Remaining payment, the rest of the amount, due at property handover

Before you buy a resale unit, Japanese law requires the seller's agent to disclose the management fee, the repair reserve fund balance, and the building's long-term repair plan. This disclosure happens during the Important Matters Explanation, before you sign.

Taxes for owning a property

While owning property in Japan, you'll pay ongoing tax-related costs. These come on top of your management and maintenance fees.

Fixed asset tax

The fixed asset tax is one of the major ongoing costs of property ownership in Japan. The Japanese government levies this tax annually, and your local tax office or city office is responsible for billing you.

Fixed asset tax is based on your property price and the estimated value of the land and building. Every property owner must pay fixed asset tax, regardless of visa status. This applies even without a permanent residence visa.

City planning tax

You may also pay city planning tax, depending on your property's location and zoning. Local municipalities levy city planning tax to fund urbanization projects, up to a standard rate of 0.3% of your property's assessed value. Not all properties fall under city planning tax, so check your zoning first.

Leasing out your property

Some owners continue owning real estate in Japan without living there themselves. If you're leasing property instead, your homeowners association fees don't change.

You still pay management fees and repair reserve fund contributions, even when leasing property to a tenant. Many owners factor these costs into what they collect rent for.

Check your management association's rules before you rent out your unit. Some buildings restrict short-term rentals or require notice before you lease your unit to someone else.

👉Use this property tax calculator to see the general tax estimate for your property!

For any non-resident property owners, consider using a tax representative service like MailMate, which can serve as a liaison between you and the local tax authorities.

MailMate's fluently bilingual tax representative service helps property owners stay up to date on their real estate tax bills by liaising between clients and the local government.

The service includes the following features:

• Tax representative for annual real estate tax payments

• Domestic point of contact for authorities (required by law)

• Bill pay support for property tax payments

• Tax notifications with English summaries

• A virtual mailbox to receive the mail that arrives at your Japanese property

• Manage important property documents and notifications in one place

Other services MailMate offers include utility and Internet setup of your Japanese property!

Frequently asked questions

Does Japan have homeowners associations?

Yes. Most condominium owners in Japan must join a homeowners association (管理組合, Kanri Kumiai). Japan's Sectional Ownership Law requires unit owners in the same condominium complex to manage shared spaces jointly.

How is a Japanese homeowners association different from a US HOA?

Japan's homeowners association mainly covers condominium buildings, not entire neighborhoods. A US-style HOA often governs a whole subdivision of detached houses; a Japanese kanri kumiai usually governs one building.

What is a homeowners association in Japan?

When you buy a condominium or an apartment in Japan, you typically join a homeowners association or building management association. This group maintains common areas and makes decisions about the building.

Is joining a homeowners association required?

Yes. Under Japan's Sectional Ownership Law, unit owners in a condominium complex must join the homeowners association. This lets owners jointly manage shared spaces.

How often must a homeowners association meet?

At least once a year. Japan's Building Unit Ownership Act requires an annual general meeting, where owners vote on fee changes and repair plans.

What's a typical neighborhood association fee?

Most neighborhood associations charge around 200 to 400 yen a month. Unlike homeowners association fees, this isn't a legal requirement.

Do detached houses in Japan have homeowners associations?

Generally, detached houses don't have a homeowners association. Owners may instead join a neighborhood association (自治会, Jichikai), which is voluntary and focused on community events and safety.

How much is the average condominium management fee in Japan?

The national average is 11,503 yen per month per unit, per Japan's 2023 condominium survey. Single-building condominiums average 11,580 yen; multi-building complexes average 10,394 yen.

Can foreigners get a loan to buy property in Japan?

Some local Japanese banks require a permanent residence visa before lending to foreign buyers. Other specific banks work with non-residents, often at higher rates or with a larger down payment.

Can I rent out my property after buying it?

Yes, in most cases. You still pay your homeowners association fees and repair reserve fund when leasing property to a tenant, and some buildings have their own rules on short-term rentals.

What taxes and fees apply when purchasing property in Japan?

Real estate acquisition tax, registry license tax, stamp duty, consumption tax, real estate agent commission, and judicial scrivener fees all apply.

What taxes apply yearly when owning property in Japan?

Fixed asset tax applies to all property owners, regardless of visa status. City planning tax applies only if your property sits in a designated city planning area.

In closing

Owning a condominium or an apartment in Japan means paying several different fees. Some are one-time costs; others are ongoing taxes and fees you'll pay for as long as you own the property.

For peace of mind, consider appointing MailMate as your tax representative.

Founded in 2019, MailMate has simplified property ownership for foreigners living abroad and is an increasingly popular option recommended by users and well-known industry figures.

Additionally, if you use MailMate's tax representative service for property owners, MailMate will take care of filing the tax representative form with the relevant tax office on your behalf.

Navigate Japan's tax system with an experienced tax representative service tailored for foreign property owners!