This article is part of Zagdim’s wiki series on buying property in Japan. It brings together what to check before financing a Japanese rental property with a loan: bank approval criteria, rental cash flow, and the risks you face when you eventually sell.
Can Foreign Buyers Get an Investment Loan for Japanese Rental Property?
Some financial institutions do offer this, but eligibility depends on where you live, your passport, and the individual product’s conditions. Japan’s Financial Services Agency (FSA, the administrative body responsible for supervising Japanese financial institutions) classifies financing that individuals use to acquire apartments, multi-unit residences, and shared housing for investment purposes as “investment real estate financing,” and has surveyed financial institutions on the scale and management of this type of lending.
The bank product details below reflect information that was publicly available as of October 21, 2026. If you hold Japanese permanent residency or an appropriate status of residence, Shinsei Investment & Finance’s general real estate purchase loan page lists uses including investment property, a primary residence, and a second home. That page does not state whether someone living outside Japan, without a status of residence there, can apply, but that does not necessarily mean such an application would be refused — actual eligibility depends on the product’s current conditions. For more on eligibility, see our companion article on whether foreign buyers can get an investment loan for Japanese rental property (listed in the notes for this translation).
Investment Loans vs. Home Loans: What Do Banks Look At?
Investment loans and home loans serve different purposes and are approved under different criteria, so the two cannot be judged by the same standard. The Flat 35 loan program run by the Japan Housing Finance Agency cannot be used to acquire a property that will be rented out to a third party. Shinsei Investment & Finance’s Overseas Investors Loan, for example, is limited to non-resident individuals who currently live in Hong Kong and hold either a Hong Kong SAR passport or a Japanese passport; people who hold only Hong Kong permanent residency, without one of those passports, are not eligible to apply.
Salaried applicants must be regular, full-time employees (employed under a company’s permanent staffing structure) with at least two consecutive years of employment and a taxable annual income of at least the equivalent of JPY 8 million in the prior year. Self-employed applicants must have at least two years in business, with average income after expenses over the past two years of at least the equivalent of JPY 8 million. Eligible properties are mainly new or existing multi-unit apartment buildings within Tokyo’s 23 wards, the greater Osaka area, or central Nagoya; some locations in Kanagawa, Saitama, and Chiba prefectures may also be accepted, and other properties require individual inquiry. For more on how this approval logic works, see our companion article comparing investment loans and home loans in Japan — interest rates, loan-to-value ratios, and underwriting logic (listed in the notes for this translation).
How Much Can You Borrow, and For How Long?
There is no single answer for loan amount or term; both depend on the collateral valuation, the type of product, and the building’s statutory useful life. Under Shinsei Investment & Finance’s Overseas Investors Loan, for example, the financing amount cannot exceed 70% of the collateral value as assessed by the lender — this is a ratio of the lender’s own valuation, not of the purchase price. The loan term for this product runs from one to 20 years. Where “balloon” repayment applies (an arrangement in which the full outstanding principal is repaid in a single lump sum at maturity), the monthly payment can be calculated as if spread over as long as 35 years, but the outstanding principal must still be paid off in full on the final repayment date — 35 years is not the actual loan term.
| Product | Loan Term | Term Restrictions |
|---|---|---|
| Shinsei Investment & Finance — Overseas Investors Loan | 1 to 20 years | Monthly payments may be calculated on a balloon basis over as long as 35 years, but outstanding principal must be repaid in full on the final repayment date |
| Sumitomo Mitsui Trust Bank — Apartment Loan | In principle, 1 to 35 years, in one-month increments | A refinanced term cannot exceed the remaining term of the original loan; the loan term is, in principle, limited to within the building’s statutory useful life |
| 77 Bank — Apartment Loan | Up to 22 years for wood-frame buildings; up to 35 years if the bank’s specified conditions are met | For purchases of existing properties or refinancing, the maximum term by structure type is reduced by the building’s age, and no grace period can be set |
77 Bank’s Apartment Loan carries a variable interest rate that adjusts whenever the bank’s short-term prime rate changes.
Will Rental Income Cover the Loan? How to Calculate Cash Flow
Rental income alone is not the answer — taxable income and actual cash flow need to be calculated separately. Under the National Tax Agency’s formula, real estate income is total revenue minus necessary expenses; this is an income-tax formula, not a cash-flow formula, so principal repayment and actual out-of-pocket costs have to be calculated separately. Interest on a loan used for business purposes can be counted as a necessary expense.
If you are a non-resident living overseas, tenants paying rent in Japan are, in principle, required to withhold 20.42% of the payment for income tax and the special reconstruction income tax at the time of payment (withholding means the payer deducts the tax before paying you); an exception applies where an individual rents the property for their own or a family member’s residential use. In other words, a portion of your rent may already be deducted before it reaches you, and this needs to be factored into any cash-flow estimate.
According to the 2023 Housing and Land Survey from Japan’s Statistics Bureau, there were 9,002,000 vacant dwellings nationwide, a vacancy rate of 13.8%; this is a nationwide figure for all vacant dwellings, not a vacancy probability for any specific rental property or city. The average contracted interest rate on loans from domestic banks and credit associations, published monthly by the Bank of Japan, is an aggregate statistic covering many types of loans, not a quote for any single investment property loan. For the full cash-flow calculation, see our companion article on whether rental income can support a Japan mortgage — cash flow, vacancy, and management fees (listed in the notes for this translation).
Buying an Older Property, Refinancing, or Paying Off Early: What to Watch For
The most direct effect of a property’s age is on the loan term; refinancing and early repayment each come with their own limits and fees. Both Sumitomo Mitsui Trust Bank and 77 Bank, shown in the table above, factor a building’s statutory useful life or age into how the loan term is calculated. Sumitomo Mitsui Trust Bank’s Apartment Loan can be used for construction, purchase, extension, renovation, remodeling, and refinancing of rental real estate.
Under Shinsei Investment & Finance’s general real estate purchase loan, repaying the full loan balance early carries a penalty of 2.00% of the outstanding principal. SBJ Bank’s product description for its “ANY” home loan lists the construction, purchase, and refinancing of rental apartments and rental real estate among its permitted uses — so eligibility for buying a rental property cannot be judged from a product’s name alone; it depends on each product’s stated purpose of funds. For more detail on older properties and financing limits, see our companion article on what to watch for when buying an older Japanese property to rent out — repairs, depreciation, vacancy, and financing limits (listed in the notes for this translation).
When You Sell: How Do Taxes and Exchange Rates Affect What You Keep?
What you recover from a sale depends on more than the sale price — the length of ownership, your residency status, and the timing of any currency conversion all affect the amount you actually receive. If you have owned Japanese land or a building for more than five years as of January 1 of the year you sell it, the proceeds are classified as long-term capital gains (長期譲渡所得).
Under the National Tax Agency’s current formula, taxable long-term capital gains are subject to a 15% income tax, plus a separate 5% resident tax; the special reconstruction income tax and the special defense income tax are each calculated separately, and whether resident tax applies to a non-resident also needs to be assessed separately — these rates should not simply be added together as a single total tax rate for every overseas seller. If you sell as a non-resident, the buyer is, in principle, required to withhold 10.21% of the payment for income tax and the special reconstruction income tax at the time of payment in Japan; an exception applies where an individual buys the property for their own or a family member’s residential use and the price does not exceed JPY 100 million. The Bank of Japan notes that the Tokyo foreign exchange market rate reported in the news is generally the interbank rate, which differs from the rate an individual gets when exchanging a small amount of currency or holding a foreign-currency deposit at a bank. For the fuller picture of taxes and exit costs, see our companion article on how leverage for Japanese investment property depends on more than the interest rate — exchange rates, taxes, and resale liquidity (listed in the notes for this translation).
What Reporting and Withholding Obligations Come After You Buy?
The reporting deadline and exemption scope differ between acquiring the property itself and acquiring related real estate rights, so the two need to be considered separately. Japan’s Ministry of Finance states that after a non-resident acquires Japanese real estate, a report must, in principle, be submitted to the Minister of Finance through the Bank of Japan within 20 days of the acquisition. Starting April 1, 2026, the acquisition of certain real estate-related rights is exempt from this reporting requirement, but the property itself is not covered by this exemption; which categories qualify should be checked against the Ministry of Finance’s current FAQ. In addition, when an overseas owner receives rent or sells a property, the payer in Japan may be required to withhold tax under certain conditions, which directly affects the amount actually received.
Whether you hold a status of residence in Japan, along with the property’s age and your length of ownership, all affect which loan products you can apply for and how you will be taxed.
FAQ
I only have Hong Kong permanent residency — can I apply for Shinsei’s Overseas Investors Loan?
No. This product is limited to non-resident individuals currently living in Hong Kong who hold a Hong Kong SAR passport or a Japanese passport; holding only Hong Kong permanent residency without one of those passports does not qualify.
The bank says it will lend 70% — does that mean 70% of the purchase price?
No. For Shinsei Investment & Finance’s Overseas Investors Loan, the 70% figure is based on the lender’s own assessed collateral value, not the purchase price.
If I subtract expenses and interest from my rent, is that my actual cash flow?
No. The tax-income formula is total revenue minus necessary expenses; actual cash flow also needs to account separately for principal repayment, vacancy, and management costs.
When I sell my Japanese property, will the buyer withhold tax upfront?
If you are a non-resident living overseas, the buyer is, in principle, required to withhold 10.21% of the payment in Japan; an exception applies where an individual buys the property for their own or a family member’s residential use and the price does not exceed JPY 100 million.
Glossary
- Regular employee (正社員): An employee hired under a company’s permanent, full-time staffing structure.
- Balloon repayment (バルーン返済): An arrangement in which monthly payments are made along the way, but the full outstanding principal must be repaid in a single lump sum on the final repayment date.
- Long-term capital gains (長期譲渡所得): Proceeds from the sale of land or a building held for more than five years as of January 1 of the year of sale.
- Collateral valuation (担保評価): The value a lender assigns to a loan’s collateral for financing purposes; this is not the same as the purchase price.
- Withholding (源泉徴収): The payer deducts tax from a payment before paying the recipient, remitting it to the Japanese government on their behalf.
Data Notes
This article was checked as of October 21, 2026. Bank product eligibility, coverage areas, terms, and fees are based on each financial institution’s product description or web page as published on that date. There is no single, uniform public approval standard across Japanese banks for investment property loans to non-resident foreign nationals; this article uses individual institutions’ products as examples and these do not represent the market as a whole. The Financial Services Agency’s overview of investment real estate financing is drawn from its survey of financial institutions, not from a uniform eligibility standard for individual loan applicants. The statement that older buildings shorten the available loan term is drawn from the term rules of two specific banks — Sumitomo Mitsui Trust Bank and 77 Bank — and other banks’ product conditions should be checked separately. Long-term capital gains tax rates, non-resident withholding, and the acquisition reporting requirement are based on current published guidance from Japan’s National Tax Agency and Ministry of Finance; rates, tax items, and exemption scope may change with future amendments, and the categories exempt from reporting starting April 1, 2026 should be confirmed against the Ministry of Finance’s FAQ. This article does not include quantitative data on resale liquidity (such as days on market or turnover rate). The average lending rate published by the Bank of Japan is an aggregate statistic, not a quote for any individual investment property loan.
Have a question about this guide? Leave a comment below, or ask Zagdim directly.
Your first stop for international property and global living.
Research and insights. Know what’s changing. Understand what matters.
Sources
- Financial Services Agency — Survey Results on Financing for Investment Real Estate
- Shinsei Investment & Finance — Loans for Overseas Investors
- Shinsei Investment & Finance — Real Estate Purchase Loan
- Sumitomo Mitsui Trust Bank — Apartment Loan (PDF)
- 77 Bank — Apartment Loan
- Japan Housing Finance Agency — Flat 35 Eligibility Conditions
- SBJ Bank — ANY Home Loan Product Description
- National Tax Agency — No.1370 Real Estate Income
- National Tax Agency — No.2210 Necessary Expenses
- National Tax Agency — No.2880 Paying Rent to a Non-Resident
- Statistics Bureau of Japan — 2023 Housing and Land Survey (PDF)
- National Tax Agency — No.3202 Calculating Capital Gains (Separate Taxation)
- National Tax Agency — No.3208 Calculating Tax on Long-Term Capital Gains
- National Tax Agency — No.2879 Purchasing Land from a Non-Resident
- Ministry of Finance — Overview of the System
- Ministry of Finance — FAQ (PDF)
- Bank of Japan — What Is an Exchange Rate?
- Bank of Japan — Explanation of “Trends in the Average Contracted Interest Rate on Loans”
Important Notice
This article is a general information summary and does not constitute tax or legal advice for any individual case. Data was checked as of October 21, 2026. Rules in Japan may be updated; refer to the current announcements of the relevant authorities, and consult a qualified professional for individual cases.
