Zero Restrictions, Genuine Freehold
Japan is one of the most open property markets for foreigners in our entire coverage: Americans can buy land and buildings with zero restrictions, no residency requirement, no reciprocity test, no minimum investment threshold, and no government approval process. Ownership is genuine freehold, with no time limitation or expiration, a meaningful contrast to nearly every other country in our coverage.
What "Zero Restrictions" Actually Means
A US citizen doesn't need Japanese citizenship, residency, or even a valid visa to purchase Japanese real estate. The ownership framework is identical regardless of nationality, no special approval, no foreign-buyer surcharge, no property type restriction. This applies equally to land and buildings, unlike most countries in our coverage where land ownership is off-limits to foreigners entirely.
The New April 2026 Form 22 Requirement
Starting April 2026, all real estate acquisitions by non-residents require Form 22 filing, and new property owners must disclose their nationality in the real estate registry database. This is explicitly a transparency and reporting measure, not a restriction on purchasing, ownership rights themselves are unaffected, but compliance with the new filing is mandatory for any non-resident buyer.
US Reporting on the Purchase and Rental Income
The purchase itself isn't a US reportable event, but the Japanese bank account used to fund it counts toward FBAR and FATCA thresholds. If you rent the property out, that income is reportable on Schedule E of your US return regardless of Japanese tax treatment, with US depreciation rules applying rather than Japanese ones, and the Foreign Tax Credit available to offset any Japanese tax paid on the same rental income.
Japanese Property Taxes
Property ownership in Japan carries an annual fixed asset tax (roughly 1.4% of assessed value) and, in urban planning areas, a city planning tax, both owed regardless of nationality or residency. Factor these ongoing costs into any purchase decision, not just the acquisition price and Form 22 filing.
Worked Example: A Tokyo Apartment Purchase
An American on a work visa buys a ¥45,000,000 Tokyo apartment (about $300,000 USD) outright, with genuine freehold title and no residency-based restrictions on the purchase. Given the April 2026 rule, his lawyer files Form 22 and confirms the nationality disclosure requirement is satisfied. He rents the unit out while working, reporting the rental income on Schedule E of his US return and claiming the Foreign Tax Credit for Japanese tax paid on the same income.