New or Old Property in Japan: Which Should You Buy?

New or old in Japan: the short answer

In Japan, shinchiku (新築, brand-new, never lived in and under one year old) is set against chuko (中古, second-hand, already occupied or over a year old). Two very different market realities.

An often-missed fact: used homes make up only a minority of Japanese home purchases — roughly 13-15% for detached houses by market estimates, the opposite of Europe. It is exactly this pro-new cultural bias that creates bargains in the used market for the savvy buyer.

Criterion	New (shinchiku)	Used (chuko)
Price (same location)	Baseline	−30 to −50%
Drop on handover	−10 to −20% immediate	Already absorbed
Consumption tax on building	10% (in the price)	None between individuals
Structural warranty	10 years (Quality Act)	Often 2-3 months, or excluded
Gross rental yield	Lower (2.5-4%)	Higher (4-8%)
Tax leverage (depreciation)	Long, diluted	Short, powerful
Comfort / recent standards	Maximal	Varies by build year

Our verdict: to invest, well-located used property built after 1981 (earthquake code) almost always wins. To live in for twenty years without reselling, new holds its ground. We break down each line below. See also our A-to-Z buying guide.

Depreciation: why new loses value so fast

The most counter-intuitive point for a Westerner: in Japan, the building depreciates while only the land holds value. Culturally, a house is a consumer good that wears out, not an asset that appreciates.

The official depreciation lives

Japan's tax office (kokuzeicho, Kokuzei-chō, National Tax Agency) sets accounting lives for the structure that mirror market reality:

Structure	Depreciation life
Wood (mokuzo, mokuzō)	22 years
Light-gauge steel (keiryo teppone)	19 years
Steel (tekkotsu, 鉄骨)	34 years
Reinforced concrete (tekkin konkurito, RC/SRC)	47 years

In practice, a wooden house loses most of its building value in about twenty years; a concrete block holds up far better. A new home typically loses 10-20% the moment you take the keys (it becomes "used") and about half the building value within ten years.

The strategic takeaway

Buying new means paying at the peak of the depreciation curve. Buying used lets the first owner absorb that drop for you. It is also why, in Japan, the land (tochi, tochi) carries the value: a well-located property on good land keeps a price floor even as the building trends to zero. To understand this mechanism, read our analysis of Japan property prices in 2026.

Warranties and quality: what the law covers

This is new-build's real edge. The jutaku hinshitsu kakuho sokushin-ho (jūtaku品質確保促進法, Housing Quality Assurance Act) obliges the professional seller to provide a 10-year warranty on load-bearing structural parts and rain-tightness of a new home.

New: automatic 10-year warranty

• Covers foundations, pillars, beams, roof and facades against structural defects and leaks;
• mandatory for any shinchiku sold by a developer;
• backed by insurance or a deposit (protection if the builder goes bankrupt).

Used: limited warranty, to be negotiated

Chuko falls outside the Quality Act. Only the keiyaku futekigo sekinin (keiyaku不適合責任, contract non-conformity liability, formerly hidden-defect warranty) applies. When the seller is a private individual, it is common practice to limit that warranty to 2-3 months, or exclude it entirely for very old properties.

➜ Hence the critical importance of pre-signing due diligence when buying used: structural survey, renovation history, and above all a check of the 1981 earthquake code. See our hidden-defects (kashi tanpo) guide and our full buying checklist.

Costs, taxes and VAT: new vs used

Purchase taxation differs sharply between the two markets and weighs heavily on the final yield.

VAT: the big differentiator

The shohizei (shōhi-zei, consumption tax, 10%) applies to the building portion of a home sold by a professional (developer, property dealer) — so to all new-builds. It never applies to land, and not at all to sales between individuals, which make up most of the used market. Buying a chuko from a private seller thus saves 10% on the building value.

Item	New (developer)	Used (private)
VAT on building	10% (in the price)	0%
Agency commission	Often none (direct sale)	~3% + ¥60,000 + tax
Registration tax	Reduced rates (new build)	Standard rate
Real-estate acquisition tax	Possible abatements	By age and floor area
Total buying costs	Lighter (VAT already in price)	≤ 6% of price

Our house rule: total ancillary buying costs stay ≤ 6% of price on the used side (transfer, judicial scrivener, agency). Line-by-line detail in our dedicated piece on buying costs in Japan and the annual property tax.

Rental yield: why used wins

For the investor the maths are blunt: at a comparable rent, a lower purchase price gives a higher yield. The same flat earns roughly the same rent whether it is 2 or 20 years old; but if it costs 30% less used, the gross yield rises accordingly.

Metric (typical mansion, same district)	New	Used, 20 years
Purchase price	¥45,000,000 (~€300,000)	¥30,000,000 (~€200,000)
Annual rent	¥1,200,000 (~€8,000)	¥1,350,000 (~€9,000)
Gross yield	≈ 2.7%	≈ 4.5%

The tax bonus: accelerated depreciation

Used property's second advantage: once the structure has passed its accounting life, the remaining depreciation period shortens sharply. For a wooden house over 22 years old, the formula is 22 × 0.2 = 4.4 years, rounded to 4. You depreciate the building value over just 4 years, creating a large deductible expense that shelters part of your taxable rental income. This lever does not exist on new-builds, spread over 22-47 years. Details in our guide to property depreciation in Japan.

Test your own price, rent and yield assumptions in our yield simulator, and compare Airbnb yields by city if you target short-stay rentals.

Financing, condo fees and comfort

Financing: used requires an inspection

Key reminder: Japanese mortgages are reserved for salaried residents of Japan; a non-resident buys cash. For those eligible, the Flat 35 (Flat 35, government-backed fixed-rate loan) finances both new and used, but used property must meet technical inspection criteria (area, age, compliance). Details in our article on mortgages in Japan for foreigners.

Condo fees: read them before buying

For a mansion (mansion (copropriété), concrete condominium), a new build starts with low fees… which rise as the building ages. A used unit already shows its true kanrihi (kanri-hi, management fees) and shuzen tsumitatekin (shūzen tsumitatekin, repair reserve fund). Always check the reserve fund's health before buying used. See our guide to buying a mansion (condo) in Japan.

Comfort and standards

New offers insulation, seismic design and fittings to the latest standards. Used is more variable: a post-2000 property often blends the best of both worlds — a used price with recent build quality. Learn to decode a listing in our guide to reading a Japanese property listing.

Worked example: ¥45M new vs ¥30M used

Let's compare two equivalent flats (2 bedrooms, same well-served district), on a 10-year horizon, for a rental investor.

Item	New ¥45M (~€300,000)	Used 20yr, ¥30M (~€200,000)
Purchase price	¥45,000,000	¥30,000,000
Ancillary costs	~¥1,350,000 (3%)	~¥1,800,000 (6%)
Total entry cost	≈ ¥46,350,000	≈ ¥31,800,000
Annual rent	¥1,200,000	¥1,350,000
Gross yield on total cost	≈ 2.6%	≈ 4.2%
Building tax depreciation	Spread over 47 years (RC)	Strongly accelerated
Estimated 10-year value drop	High (new portion lost)	Low (already absorbed)

Reading: the used option ties up ¥14.5M (~€97,000) less capital, delivers a gross yield ~1.6 points higher, offers far stronger tax leverage and faces a gentler future value drop. New only closes that gap if the investor prizes the 10-year warranty, comfort, or a quick resale to a buyer willing to pay the "nearly-new" premium. Illustrative figures — recompute on each real property with our simulator.

Common mistakes to avoid

• Paying the new-build premium for a rental investment. The tenant pays the same rent; you lock up 30-50% more capital for a lower yield.
• Confusing "used" with "remote akiya". A well-located chuko has nothing to do with a vacant house lost in the countryside. Location always comes first — see our guide to buying an akiya in Japan.
• Ignoring the 1981 line. A building predating the shin-taishin (shin-taishin, new earthquake code) may need costly reinforcement. Always check the construction-permit year.
• Forgetting to check the repair reserve fund (shuzen tsumitatekin) of an old mansion. An under-funded reserve signals future levies.
• Skimping on due diligence in used property. Without the 10-year warranty, a technical survey and reading the property register are your only protections.
• Overestimating resale liquidity. New or used, only a good location resells fast. A new building does not save a poor location.

Conclusion: our recommendation

For the vast majority of foreign investors, well-located used property (chuko) built after 1981 and ideally after 2000 is the rational choice: 30-50% lower entry price, no VAT between individuals, higher yield, powerful tax leverage and an already-absorbed future value drop. New remains relevant to live in long-term, when the 10-year warranty, top-spec comfort and peace of mind matter more than financial performance.

Either way, the immovable rule holds: it is the location, not the building's age, that makes the value. Browse our listings selected for location, discover renovated projects, and for a new-vs-used call tailored to your exact project, see our support from search to handover.

Frequently asked questions

Is it better to buy new or used property in Japan?

To invest, well-located used property (chuko) almost always wins: 30-50% cheaper, no VAT between individuals, higher yield and accelerated tax depreciation. New (shinchiku) mainly makes sense to live in long-term, for the 10-year warranty and modern comfort.

Why does a new home lose so much value in Japan?

Culturally, the building is seen as a consumer good that wears out: the tax office gives it 22 years of accounting life in wood, 47 in concrete. A new home loses 10-20% the moment you take the keys and about half the building value within ten years. Only the land keeps its value.

Is there VAT on used property in Japan?

No, not on sales between individuals, which form most of the used market. The 10% consumption tax applies only to the building portion sold by a professional (new or dealer), never to land. Buying used from a private seller therefore saves 10% on the building value.

What warranty applies to a used home in Japan?

The Quality Act (10-year warranty) covers new only. On used property, only contract non-conformity liability applies, often limited to 2-3 months when the seller is an individual, or excluded for very old homes. Pre-signing due diligence is therefore essential.

Does used property offer a better rental yield?

Yes, generally. A flat earns a comparable rent whether it is 2 or 20 years old, but if it costs 30% less used, the gross yield rises accordingly (often 4-8% vs 2.5-4% for new). Accelerated tax depreciation on the used building strengthens the edge further.

Should you avoid properties built before 1981?

Not systematically, but be careful: before the 1981 shin-taishin earthquake code, a building may need costly reinforcement. Always check the construction-permit year and have the structure surveyed before buying an old property.

Can a foreigner finance a new or used purchase in Japan?

Japanese mortgages are reserved for salaried residents of Japan; a non-resident buys cash, new or used. For those eligible, the Flat 35 loan finances both, but used property must meet technical inspection criteria (age, area, compliance).

Is a used home renovated after 2000 a good compromise?

Often the best of both worlds: a post-2000 home combines a used price with recent build quality and better seismic compliance. Well-located and seriously renovated, it can outperform a new build over a 10-to-15-year horizon.