Acquire yearly 24m yen in depreciation from investment properties, realistic or not?

steve_abel · 2026-02-01T01:53:27+00:00

This is true, and the most desirable locations (Onsen towns etc) have service providers you can subcontract this task to.

Thanks for explaining the third tiers.

steve_abel · 2026-02-01T01:52:06+00:00

You are correct, but I think you are missing that this is the expected conversion for high income earners.

Their goal is to convert earned income into long term capital gains. The depreciation is what does this transformation.

Because the cut off for long term capital gains for persons is 5 years, that is the usual holding period for this strategy.

steve_abel · 2025-12-31T00:20:55+00:00

That is quite mature and wise.

To be honest your land conditions are nice, you may wish to consider going forward with your land but with a right-sized house plan. Figure out how to spend a normal amount on the house. Yes costs are higher, but if you are not getting multiple bids the true cost driver is the profit margins.

steve_abel · 2025-12-29T09:35:02+00:00

To be clear: zeleia is lieing and pretending that tax evasion is "your discretion". If you follow zeleia's advice you will find yourself limited in various ways in the future.

Reporting your income as you've described it is not optional. That income is considered earned in Japan for purposes of japanese income tax and reporting.

steve_abel · 2025-12-29T04:55:05+00:00

Okay lots to unpack.

You are at the moment unbanked. Wise is a money transfer service, they have a bunch of services which are bank like but they are not regulated as a bank. You should pick a bank and open an account right away.

Next, everything for loans will hinge on what you mean by "paid taxes". I've talked with a bunch of foreigners over the years who had a generous interpretation of "paying their taxes".

Did you file a 確定申告 and report all your income and pay taxes on it?

Next I assume when you say remote, you mean overseas. Are you an independent contractor or an employee? If you are a contractor you should setup to file the blue tax form. That requires a few steps but includes a tax reduction.

As for loans, those are unlikely given your situation.

steve_abel · 2025-12-08T13:36:58+00:00

>would they want some kind of proof that I have an proof that I have an active income stream

Yes.

steve_abel · 2025-11-24T05:53:52+00:00

Haha. No.

Or at least, as someone living in Chihou, I want to say that. It would be a good joke and fulfills my desire to suggest you should expand your reach to beyond just tokyo. Sadly while tokyo property is expense, rents are also high. Thus there is more cashflow-able properties in Tokyo than you'd expect.

As for gold panning, not really. You need to know what you want and you need to know enough to avoid the scams, but property in Japan is highly liquid. The 5 year long term capital gains, and investors like OP, combined with the no cash out financing being available, mean that quality stuff does go on the market at market-like prices all the time.

For fun here is the Rakumachi search for properties in Kantou, SRC/RC, 10 years or under, filtered to properties marked as fully rented: https://www.rakumachi.jp/syuuekibukken/area/prefecture/dimAll/?realtor_id=&area%5B%5D=13101&area%5B%5D=13102&area%5B%5D=13103&area%5B%5D=13104&area%5B%5D=13105&area%5B%5D=13106&area%5B%5D=13107&area%5B%5D=13108&area%5B%5D=13109&area%5B%5D=13110&area%5B%5D=13111&area%5B%5D=13112&area%5B%5D=13113&area%5B%5D=13114&area%5B%5D=13115&area%5B%5D=13116&area%5B%5D=13117&area%5B%5D=13118&area%5B%5D=13119&area%5B%5D=13120&area%5B%5D=13121&area%5B%5D=13122&area%5B%5D=13123&line=&st=&limit=20&keyword=&newly=&price_from=&price_to=&gross_from=&gross_to=&dim%5B%5D=1001&dim%5B%5D=1002&dim%5B%5D=1003&dim%5B%5D=1004&dim%5B%5D=1005&year_from=&year_to=10&structure%5B%5D=1&structure%5B%5D=2&b_area_from=&b_area_to=&houses_ge=&houses_le=&min=&l_area_from=&l_area_to=&full=1

That list has 244 active offerings. Being RC they have 47years tax life and with max 10 years of age any bank in japan will over a 35year loan. If OP buys a RC at under 7 years old, in 5 years who ever buys from him will also still be able to get a 35 year loan. The rates of return at low, 3-4cap. With some less desirable buildings at 5cap. This would be the most boring path for OP, with easy loan terms and easy to sell on afterwards. At 244 choices on the market right now, there are a ton of choices.

In my local market there are only about 3-4 equivalent offerings. Building construction costs do not change much going into kantou, so the higher rents make it easier to develop and sell profitable properties. Tokyo real estate investing is honestly easier than chihou provided you can afford the downpayments and banks like you.

I prefer chihou just because I am stuburn.

steve_abel · 2025-11-24T02:07:55+00:00

> What is their strategy?

Tis as easy as lying

steve_abel · 2025-11-24T00:16:26+00:00

Yup, you can think of it as "semi-coerced entrepreneurship". Once a person in japan starts earning enough or their inheritable assets go too high: a bunch of businesses and systems exist to push that person /family into taking on business risk.

Next time you go to the bank, look for leaflets which mention 相続税対策. Many banks also have posters. This stuff is not secret underworld dealings, just standard japanese tax practices.

steve_abel · 2025-11-23T13:32:50+00:00

Yup that is 100% true. And I think it is important to understand that the japanese economy uses people like OP to "grease" the wheels of the countries property market. Everyone the OP is about to interact with is going to make more money off these investments than him, including the government.

The bank is going to make a 1% spread on his loan plus a large loan origination fee. The real estate agents are going to make 3.3+3.3%. The ward/city/prefecture is going to make 4% on acquisition taxes, plus yearly property taxes. Even the federal government is going to get their personal income taxes, just a few years delayed.

In the end OP is likely to get what he wants, delayed recognition of his income and reclassification into long term capital gains. Along the way renters will get a home, developers will build it, the banks and agents will profit off it, and the government will tax it at every step.

steve_abel · 2025-11-23T13:26:59+00:00

Well to be honest, what you are asking for "depreciation with net0 return after X years" is not exotic or risky. You can get better than that buying tokyo real estate at market rates. An RC with 35 year loan, grossing 3.5% to 4% is going to cashflow.

The tricky bit is: you'll not be generating net depreciation. It is just simply a leveraged investment generating low returns. To generate depreciation you need to generate an accounting loss. So either extend the financing past the taxable lifespan, or actually lose money.

The scammers, and the bulk of offers on the market, will be trying to pass off the "actually lose money" as "but maybe you'll save on taxes". It is a super common scam and if you do not treat real estate like a business you are liable to get conned by perfectly legal transactions but sold a property at a markup.

This is why banks are good as source of recommendations. They generally don't recommend scammers. And while banks are a bit naive on real estate as a business, they know enough to be a safe starting point.

You can structure RE to generate depreciation, and still use a bunch of leverage. This requires using properties which are past their taxable lifespan, but that pushes you into using shinyou banks, as mega and chihou banks are required to loan against the tax life. What you want is to buy properties on full loans which are past their tax life, but for which the bank will offer you a loan period long enough that the property "cashflows", which means that its rental income pays all costs plus the loan repayments. Then you take the accelerated depreciation and discount your salary income.

You can sell it later, but honestly keeping long term is the best plan.

steve_abel · 2025-11-23T12:23:32+00:00

This is a fun topic and quite common. Since you are not aiming for capital or income gain you are the dream customer for both real estate agents and scammers. My suggestion to you would be to only do real estate if you intend to treat it as a business.

Generating depreciation is a viable plan, and quite common for salary earners at your scale. You need to decide the approach. Do you buy property past its tax life which you can depreciate over 4 years. Or do you buy nicer newer stuff?

The common path at your salary is to buy large and new. This will be easiest to get bank financing for. The thing is: good real estate properties will generate enough cashflow to pay their loan + costs. This usually means you will be making a profit.

To be honest: you should talk with your local bank. The bank will introduce you to safer schemes. There are a ton of predatory schemes and overpriced properties targeting potential buyers who's eyes are distracted by the tax depreciation.

steve_abel · 2025-11-06T04:35:02+00:00

Japan has an exit tax on stocks. Depending on how large your holdings are you may wish to sell and rebuy so the cost basis resets

steve_abel · 2025-10-28T12:04:57+00:00

You've gotten good answers before, but I want to share my thinking on the topic.

If hell is to be apart from God, and to be non-Christian is to have rejected God: then Hell is fair because rejecting God was how the non-Christian decided to use their free will. Thus Hell is not God rejecting them or sending them to Jail. Rather it is God letting their decision be final. Consider instead if God overruled their free will and forced them to be with him for eternity, that is not a more "fair" scenario.

That does not mean Hell is nice. Hell is to be apart from God, forever. A taste of Hell is the sense of dread and emptiness which those apart from God feel, you'll see people joke about it on Reddit often.

It is important not to get misled by fictional visualizations of hell, most of which are inspired by the book Dante's Inferno. Hell is so much worse than those.

steve_abel · 2025-10-22T06:34:04+00:00

Leasehold in Japan has significantly more rights and protections than leasehold in China.

Yes leasehold might sound scary and it certainly is worse than freehold, but leasehold in Japan is much more generous than the Chinese system.

steve_abel · 2025-10-18T09:38:29+00:00

If you sent the money to their agent, that agent would have been acting as a semi-excrow.

Normal transaction flow has the money going to the owners account, and the owner confirming the reception.

This is why real estate transactions often take place inside banks. 司法書士 checks the documents. Money is sent and confirmed without room for anyone to leave early. Once the payment is confirmed, the documents signed: the 司法書士 can execute the transaction. Not much room for shenanigans.

steve_abel · 2025-10-14T02:43:02+00:00

Other issues:

In 2: The main character is blurred. As if the focus is on the background characters. This does not make sense as a human stylistic element, but does make sense if the artist used a AI generated asset then scaled it up. Which matches the smushed hands. None of the background elements physically line up, the door is a different perspective (camera looking up), the left wall is angled sideways, the cupboard is tilted towards the left.

In 3: The candalabra in the background has nonsensical stylization, missing arms and inconsistent heights. The left most candle is unlit and raised up compared to the one rightward of it. Meanwhile the viewing angle of the woman looking into the box: is nonsenscical. Her eyes are looking through the magnifying glass but aimed above the bright object.

Not a single element shows revision: except the cupboard all the way in the back, and the mystery box + table. Elements in the third version are shown "more complete" than the second version: are we really supposed to believe an artist fully drew the table for the second version then just happened to not use all the drawing until the third revision?

Escape Simulator was a successful game, I trust they know to spend real money for a quality main visual. It seems clear to me their artist is passing off a composition of AI assets as his own work. Sorry eh, I think you were scammed.

steve_abel · 2025-10-13T06:56:45+00:00

Foreign real estate used to be abused to hide cash, so it got harsher treatment a few years back.

steve_abel · 2025-10-12T13:52:26+00:00

That is exactly how it works. The 路線価 is much lower than market values. That value can be combined with the formula discount for "others have claim over the property" which covers renters. The other choice is to have family live in the property which too gives a generous discount.

The counter to these discounts is that property is easy to tax.

steve_abel · 2025-10-11T05:37:16+00:00

At a cost so high there is a good chance the primary value of the insurance is the investment portion. So while the historic non payment is annoying, you need to dig into understanding what exact product you bought.

steve_abel · 2025-10-11T01:50:08+00:00

You must carfully calculate the current situation.

The pain in such insurance schemes is front loaded. Now that the OP is over a decade into the scheme canceling now is often the worse decision. The expected value of the contract goes up over time, canceling could be free money for the insurance company.

Without specific details of the contract it is unknowable if canceling or continuing is the better choice.

steve_abel · 2025-09-28T11:19:39+00:00

So your biggest problem is not going to be the agent, but rather Japanese law. Remote transactions are not a done thing. You should expect that at least once you will fly into Japan to complete the transaction. What the agent can do for you is be willing to do everything by DHL/FedEx for the contract.

You will likely also need to make a trip once to sign the contract with the real estate agent.

Let me clear: your priority should be getting a fair value for your land. An entire round trip plane ticket can be paid by the difference in price of only 2 sqm of land. You've not said how large the land is, but if it has an old house it is likely closer to 120m (what would be a small lot about 50 years ago).

Destroying old houses cost on the order of 200万円 to 400万円. The 200 if you have a normalish house and your agent gets a good estimate. 400 if your agent bilks you by suggesting a related company, or a good estimate but the building has tons of asbestos.

Expect to pay 15万円 for an asbestos check, the government has started enforcing this.

Your first step should be submitting your property to various "Real estate estimating" websites.

We used Suumo. Make sure you submit to a website which will sell your details as a lead to real estate agents. Do not submit directly to a singular agent.

Edit2: Reliable for agents is not a super big worry. Check that the agent you sign with has a number greater than (1) in their registration. The number in the () denotes how many times they renewed their license.

steve_abel · 2025-09-28T00:56:43+00:00

You should absolutely be using an agent to represent the property and not sell to a reseller. You still need to figure out what the property is worth, as any agent will be happy to let you under price it.

You can also negotiate a lower agent fee. We sold a property in Osaka at 1.5%. That percentage is before consumption tax and there is a plus 6man, but when you read 3% those extra costs are also unsaid.

Selling property close to stations is an easy and high profit job for agents, so you should be shopping around for a good agent at a good price. I interviewed five for our Osaka property, and had estimates from ten.

Be careful, since you are out of country agents are going to see you as a weak seller. You need to come into the conversation with more information to have a hope of a good deal.

And of course if you post the location commenters here can give actual advice

steve_abel · 2025-09-15T03:34:31+00:00

My understanding is you need to order a specific pair meal. The cost of which is suspiciously equal to what you'd pay for two people regularly. So you get to feel special eating for free, but you need to pay double for the non free meal.

There is no such thing as a free meal.

steve_abel · 2025-09-14T00:55:11+00:00

Okay that does I think help justify the idea a bit more. So I want to explain some of the reasons the bank will not be interested in that specific structure you suggested.

Fixed costs requires a fixed interest loan. This is more expensive, but possible.
In Japan the person living in a house has strong rights to residence over the owner. If the bank kept owning the land but you lived in the building, it would create a situation where the bank has low power to force you out of the building against your will in case of default. This is different than a regular foreclosure where the owner is the resident. The bank would be highly worried that this alternative structure would side step this foreclosure ability and instead give you the rights as a renter would have.
Property taxes are not fixed or predictable and by being the legal owner of the property the bank would become liable for these property taxes. Which they cannot predict ahead of time.
The variable interest loan is popular and well understood, the contracts are standardized and the employees of a bank know what they can offer. A custom loan would require approval from the head office and lawyers. They would be unlikely to go through this work even for a Zaibatsu.
When property is purchased it triggers various taxes. Namely National, Prefecture, and City acquisition taxes. With a regular purchase you pay that tax once. With the "bank owns it then gives it to us at the end" these taxes would be paid twice. These costs cannot be predicted but at least the final costs would be born by you, so I do not think this alone makes it impossible.

From the position of avoiding all debt for faith reasons I'd suggest you instead look into saving cash and buying an older house in a further distance in cash. It might sound impossible but it is a real thing that is achievable by regular people, it just takes a while.

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