Buying

Q1Can I purchase property in Japan?

Yes.

Any foreign national can legally purchase real estate in Japan, without restriction.
Permanent residency status is not required. The transfer of title is straightforward and absolute.

The vast majority of of the property available through Niseko Property is free hold title.

Niseko Property quotes land and building sizes in m2 and in the Japanese measure of tsubo.
One tsubo is approximately 3.3 m2.

Q2Why Niseko?

The Niseko resort area on the island of Hokkaido in northern Japan is the most popular
winter resort in Asia.

Due to its proximity to large population bases in Australia, New Zealand, Hong Kong,
Singapore, Taiwan, and China, visitation and investment in the area has increased steadily
over the last 14 years.

There has been a substantial increase in international visitor numbers to Niseko in recent years.
The first wave of international guests were primarily from Australia, however in the last few years
the number of guests from Hong Kong, China, Taiwan, Singapore, Malaysia and Thailand and other Asian 
countries has been growing rapidly. There has also been a noticeable increase of visitors from Europe
(particularly Scandanavia) and North America.

Land and property values in the Niseko resort area have increased rapidly in the last fourteen years.
The Lehman Brothers' shock saw values plateau, a trend accentuated by Japan's Tohoku earthquake and high yen.

Since the 2012/13 winter there have been increased sales volume and strengthening values
on the back of the resort's increasing popularity and the relatively weak Yen.

Niseko is the winter destination of choice for many of Asia's wealthiest citizens and is also
growing as summer resort.

Foreign investment has remained strong over the last ten years.

Some of the major investments have been:

Richard Li's Pacific Century Premium Developments (PCPD) purchase and development
of the Hanazono ski area with plans to build condominiums and villas on the site.

Malaysian developer YTL's purchase and redevelopment of the Niseko Village area,
which includes the Higashiyama ski area, golf course, Hilton and Greenleaf hotels.
YTL has plans to build ski-in ski-out condominiums and has completed some luxury villas as well as a retail
and F&B mall near the Hilton. They have also installed a brand new ski lift.

A foreign fund based in Tokyo purchased the Moiwa ski area and refurbished
the restaurant building and installed a new ski lift.

The extension of the Shinkansen (Bullet Train) from Tokyo through to Sapporo is underway
and it will have a significant impact on Niseko when complete. The bullet train will stop at
Kutchan (Niseko's main service town town, 10 minutes by car from Hirafu). 

 

What does this mean to you?

The Niseko Resort Area is a great location to purchase land or buildings:

• As an investment for income and capital growth
• To use as a four season holiday home

The influx of international visitors has been the main driver for property prices
and accommodation demand. The current and proposed development to the region
will see domestic and international visitation continue to increase, creating further
demand for quality accommodation.

Rental return rates of between 2-5% for residential apartments, combined with strong
capital appreciation and no restrictions on foreign ownership have attracted buyers
from Australia, Asia, and ex-pats living in Asia.

There are now a variety of companies providing services to international guests in the
English language, including ski rental, lessons, massage, physiotherapy, and child care.
This makes the Niseko more accessible and user-friendly for international visitors.

Although best known for one superlative season, Niseko is blessed with four distinct seasons.

Consistent and plentiful powder snow conditions throughout winter with average
temperatures of -7 º C make for ideal skiing and snowboarding.
The Niseko United Ski Area is internationally recognised with terrain to suit all ability levels.

Lush green rice fields dominate the spring landscape.

Mild, dry summers with average +25 º C create a Shangri la in comparison with
the main island of Honshu which experiences hot and humid weather.

Crisp autumn days with the kaleidoscope of colours from the changing of the
leaves rival if not exceed the New England fall landscape.

There are an abundance of outdoor recreation opportunities outside of the winter
season including golfing, rafting, hiking, mountain biking, cycling, horse riding and fishing.

The Niseko Resort Area is approximately two hours' drive from New Chitose International
Airport, near Sapporo.

Q3Is the Niseko Resort Area's growth sustainable?

We believe it is.

The apartment and real estate market has only just emerged in the last 7 years and prices are still substantially lower than most Australian and international ski resorts.

There is a limited supply of land and apartments and the sharp increase in visitor numbers has created strong demand for rental accommodation. These factors will underpin the real estate market and they also point to continued strong capital growth in the coming decade.

The Niseko Resort Area averages 15m of snow per year which is about 25% more than Whistler's average. For ski enthusiasts this is what Niseko is all about and it is this fact more than any other single issue that will ensure that Niseko continues to grow. 

Q4Are there alternatives to the Niseko Resort Area in Japan?

Yes.

There are over 500 ski areas in Japan ranging from vast interlinked resorts to small single lift slopes. The best snow conditions are found in northern Japan and in the central Japanese Alps.

The ski industry in Japan is undergoing a revival after a decade long slump. An influx of foreign skiers from Asia and Australia are leading this renaissance.  The resorts attracting the most attention are Hakuba (a huge expanse of 10 separate resorts) in central Japan and the northern resorts Furano (host to World Cup downhill races) and Niseko.

The Niseko Resort Area is at the apex of this renaissance due to the combination of:

• Amount of freehold land for sale
• Number of international visitors
• Proximity to an international airport
• Four season recreation and accommodation options
• International and English language services
• Range of bars, restaurants and hot springs
• Snowfall
• Terrain

Q5What is planned for the Niseko Resort Area?

Continued growth in the area looks positive as a number of well publicised major capital investments are planned for the immediate future.

Hilton Hotels Corporation has spent millions of dollars renovating and rebranding the former Niseko Higashiyama Prince Hotel into the new Hilton Niseko Village.

Niseko Hanazono Ski Area was acquired by Hong Kong based PCPD. Work on a ski-in ski-out village featuring restaurants, shops, and a housing development began in August 2008. New lifts to increase skier capacity and a magic carpet for learners are also part of the redevelopment plans.

The presence of these international brand names will further contribute to the Niseko Resort Area's standing as an international four season destination.

The proximity of Niseko Moiwa Ski Area to the Niseko United Group opens up the potential for the linking of these two areas.  This would greatly increase the skiable terrain and invite further investment to the region.

The Vale development will be completed December 2009. This five star development in Hirafu, alongside the landmark Alpen Ridge Apartments, will further consolidate the Niseko Resort Area and in particular Hirafu as Asia's premier ski destination.

The extension of the Shinkansen (Bullet Train) from Tokyo through to Sapporo is well underway and it will have a significant impact on the Niseko Resort Area. This extension includes a planned stop at Kutchan (Hirafu's neighbouring town - 10 minutes by car from Hirafu). Kutchan will see substantial investment by the central government over the next 10 years. It is expected that with the completion of the Shinkansen, the Niseko Resort Area will see a massive increase in domestic and international visitation year round.

Q6Is finance available?

No.

At present, no financial organizations are providing loans for Niseko properties using these properties as security. The majority of purchases are in cash or purchasers borrow from their own banks using properties they own in their country of residence.

The lack of loans provides stability to the Niseko property market, as during economic downturns there is little pressure on purchasers to significantly reduce their prices to sell.

Q7Are there additional costs associated with my purchase?

Yes.

The price quoted on our website is the listing price that the vendor has put the property on the market for.

Once a purchase price has been agreed upon by you and the Vendor, there will be additional costs - Purchase Related Costs.

The Purchase Related Costs are:

Legal Office / Translation fees

Niseko Property Commission 

3% of the purchase price plus ¥60,000
Plus government consumption tax of 8% of the above calculation

The commission is calculated using the following banding system;
 
For example:
If you purchase a ¥5,000,000 property, the commission will be calculated as follows:

   5% of  ¥2,000,000 = ¥100,000
+ 4% of  ¥2,000,000 =   ¥80,000
+ 3% of  ¥1,000,000 =   ¥30,000
Total    ¥210,000

This is the same as calculating 3% of ¥5,000,000 plus ¥60,000

Once the commission is calculated we collect an additional 8% of that figure. This is for consumption tax which is paid to the government by Niseko Property on your behalf.

Contract Stamp Duty
A number of government revenue stamps (literally like a postage stamp) which need to be purchased and then affixed to the Sale Agreement and Statement of Important Matters documents.

Title Registration Stamp Duty 
A duty (or tax) charged by the government which is calculated on the value of the property (not the purchase price).

Title Registration Certificate Charge
A fee of ¥1,500 will apply to every block of land purchased. An additional fee of ¥1,500 will apply if there is a building on that block of land.

For example:   1 block of land = ¥1,500 
1 block of land + building = ¥3,000

Postal Charge
During the sales process we must courier documents to you. Niseko Property charges a flat rate of ¥3,000 to all purchasers.

Annual Fixed Assets Tax 
The rateable value of the property determined by the government paid on an annual basis (also known as 'rates' or 'property tax' in other countries).

Bank Charges
Niseko Property over estimates the bank charges to ensure that we will not need to ask for additional funds during the sales process. Any excess monies will be reimbursed on transfer of Title.

Q8How long does it take to buy property? How does the sales process work in Japan?

The standard timeframe for transfer of ownership in the Niseko resort area is 45 days.
The timeframe can be shortened or lengthened as required.

How does the sales process work in Japan?

Offer & Acceptance

• Contact Niseko Property to discuss your potential purchase
• An offer is made and communicated to the vendor
• A purchase price and payment schedule is agreed upon by both parties

Contract Execution

• Niseko Property sends you cost of acquisition information for the purchase of the property
• We email you the draft sale agreement and Statement of Important document to review and approve
• Once approved, we courier you hard copies of these documents to you to sign
• After signing the documents, you transfer the deposit (usually 10% of purchase price) and related charges to the Niseko Property Trust Account.

Contract Settlement

• The Japanese legal office couriers you Power of Attorney and Statutory Declaration documents to sign, have notarized and return to the their office
• Niseko Property emails you the settlement payment information for your purchase
• You make 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 you the new title naming you as owner
• The legal office couriers the title to you
• Niseko Property couriers you the sales agreement and Statement of Important Matters documents
• Niseko Property reimburses you any excess monies
• Congratulations, you now own property in Niseko!

Q9I now own in the Niseko Resort Area, what happens next?

Approximately 6-12 months after you become the new Title holder you will be responsible for an acquisition tax payment. This is a one-time payment charged by the government on the purchase of property in Japan.

In addition you will be responsible for an annual fixed assets tax of 1.4% of the statutory valuation of the land. Statutory valuations are generally 50% lower than the purchase price.

If you do not reside in Japan, you are required to nominate a 'Tax Manager' to pay the annual fixed assets tax.

Who will manage my property?

If you have a question about management or would like to enquire about commercial leasing please contact us.

Property Management for Holiday Accommodation

Niseko Property understands that investment owners want to ensure maximum return on their investment and require a professional, experienced management company to efficiently handle bookings, cleaning, snow clearing, and guest management.

Taxation

The following information is intended as a guide only. We recommend that you seek advice from a tax professional if you have more specific questions.

Japanese Personal Income Tax

Non-residents who own property in Japan are required to file a tax return and pay the relevant taxes at the applicable rate.

Rental income may be subject to withholding tax. This may be offset against the income tax accrued and is refundable if no income tax is payable in Japan.

Income earned as rent is taxable as personal income. However, it is possible to offset taxes with accelerated depreciation expenses during the first five years. Interest payments may also be offset against rental income.

What about depreciation?

The contents of your property may be depreciated over 10 years at a rate of 10% per annum.

New developments are depreciated over a 39 year period at a rate of 2.6% per annum.

Selling

Q1I've bought property in the Niseko Resort Area and I would like to sell. How do I go about doing this?

Please contact us directly and we can provide you with recommendations based on our previous sales and the current market in the Niseko Resort Area.

Niseko Property lists a broad spectrum of real estate options in the Niseko Resort Area and beyond. This includes luxury apartments; condominiums; commercial operations; land; and family homes.

Our listings are promoted year round in all major local magazines and selected international magazines.

The Niseko Property team attends international real estate conventions and expos and regularly visits Hong Kong, Australia, and Singapore to meet with clients to promote our listings.

Our extensive client base and marketing programs give our Vendors excellent market exposure for their properties.

Non-Japanese Vendors please contact:
Grant Mitchell
Mobile: +81 (0)90 6990 2857
Email: grant@nisekoproperty.com

Japanese Vendors please contact:
Mina Yamamoto
Mobile: +81 (0)80 6081 8999
Email: mina@nisekoproperty.com

 

For your information:

Withholding Tax

Withholding tax is 10% of the sales price, in lieu of capital gains tax made to foreign transfers of sales proceeds. Withholding tax maybe refunded wholly or partly after the sellers final taxation is calculated. Niseko Property can assist with Japanese capital gains tax enquiries.

Capital Gains Tax

Net gains realised from selling properties held for less than five years are subject to a minimum capital gains tax of 30%.

The taxable gain is computed by deducting the acquisition costs and related expenses, improvement costs, and transfer costs from the gross sales price.

Net gains from the sale of properties held for more than five years will be taxed at a minimum of 15%.

For an independent solicitor in Japan, please contact:

Yoshida Solicitor Office
South 1, West 1-33, Kutchan-cho,Abuta-gun,
Hokkaido, Japan, post code 044-0031
Ph:  +81-136-21-7333
Fax: +81-136-21-7334
http://www.yoshida-office.net/220/

Building and Developing

Q1I've bought property in the Niseko Resort Area and I would like to build or renovate. What are the general costs of building?

The cost of building in the Niseko Resort Area can vary considerably depending on the quality of building materials. As a guide, current costs are from about 480,000 JPY per m2.

We can also assist you with project management, design, and the tendering process. Our experience in this area will ensure that you not only build your dream home but that your home or apartment is marketable.

Q2Are there any building regulations or restrictions in the Niseko Resort Area?

Yes.

The Niseko Resort Area has been designated a "Special Heavy Snowfall Region". Building regulations for the climate and a local scenery preservation ordinance are in place.

The following building regulations are currently in place for the Niseko Resort Area.

Location	Minimum Block Size m2	Maximum Footprint (%)	Maximum Floor-Area Ratio (%)	Maximum Height (m)
Upper Hirafu Village	-	40	300	22
Middle Hirafu Village	-	50	200	13
Lower Hirafu Village	-	50	200	13
St Moritz I & II	330	40	200	13
Kabayama	330	40	200	13
Izumikyo I, II & Stage	330	40	200	13
Outer Hirafu (Ruheil)	330	40	200	13
Hanazono North Hills	1000	30	100	13
Yotei Village	330	30	100	13
Spring Valley	500	40	300	22

For Example:

If you purchase/own a 330 m2 block in Kabayama (minimum block size allowed for building), the maximum allowable footprint size is 132 m2 (40% of the block size).
Based on the above calculation, the total floor area of your building could be up to 660 m2 (330 m2 multiplied by 200%).
If you wanted to use all 600 m2 you could have a building of 4 floors with 132 m2 on each floor as long as you did not exceed the maximum height restriction of 13 metres for this location.

Building set-back and eaves restrictions also apply. These rules vary depending on the location, size of the block, and may affect the maximum allowable floor size. Please contact us for further details.

New building regulations are currently being drafted for the Higashiyama and Annupuri areas.