An Insider’s Guide to Investing in Niseko
Japan is famous the world over for its skiing: the endless champagne powder, dramatic landscapes, and easily accessible backcountry. Nowhere is this truer than in Niseko. Located in the northern reaches of Japan, a short drive away from Chitose airport, and with more snow than you’ll see in a lifetime – it is a tantalising opportunity for both skiers and investors alike. With activities for tourists year round and a straightforward purchase process, it presents the obvious choice for those looking for property in this stunning country.
Looking to invest? Here are our top three tips.
1. Where should I invest in Niseko?
Japan is an attractive place for many looking to invest. Unlike other East-Asian nations, ownership is freehold for both foreigners and locals in Japan. In other words, if you have the cash – the property is there for the taking.
But first, do the research on the location of the property you’re looking to purchase. Niseko is a rapidly expanding resort with many opportunities. Yet it is made up of three distinct villages with varying access to slopes and facilities.
Niseko Grand Hirafu, Niseko Annupuri, and Niseko Village make up the main areas of the resort.
Grand Hirafu is the heart of the resort, where you will find many features of an international ski resort: bars, restaurants, convenience stores, and a somewhat anglicised culture.
Next up, Niseko village. Nestled between the busy town of Hirafu and the quieter Annupuri this presents a nice combination of the two. Investment is rising in this area, with developments such as Snow Dog Village, among others, attracting new investment to the area.
Finally, Annupuri. This area may have gentler slopes and less nightlife, but it is considerably less crowded on the mountain itself so it’s not one to discount!
Of course, wherever you choose to purchase is based on personal preference. However, we would recommend somewhere near to the resort’s inter-resort bus or a property with shuttle service as one of your top priorities.
2. What are the costs involved in investing?
The purchase of a condo in Niseko may not set you back as much as a five-bed chalet under the Matterhorn. However, there are certainly additional fees that you need to watch out for.
The beginning of a property sale is officially set in motion with the Application of Purchase or Letter of Intent. This requires a payment of ¥100,000 – ¥500,000 (roughly $1000-$5,000). Only once this is approved will the buyer then pay the deposit of 10% of purchase price.
In addition, there is the 8% purchase tax followed by 1-3% miscellaneous items such as closing costs and lawyers fees. As well as estate agency fees that can be another 3% on top.
3. What can I expect during the investment process?
During the investment process, property buyers will receive a document entitled ‘Explanation of important matters.’ This is an important step in the process as it aims to eliminate legal disputes further down the line. It includes a comprehensive overview of the property agreement draft before going ahead with the deal.
When it comes time to sign the purchase agreement the document itself will not only detail the investment arrangements, it will also detail the taxes payable to date.
It is common to review the property itself before the final payment. This is an important step, as it becomes very difficult to walk-back on the agreement once the final payment is made.
We advise that when it comes to the final payment you have a legal scrivener on-hand. They facilitate the legal transfer and act on behalf of the seller in transferring the registration of ownership. Not only this, but they will also protect the investor form unexpected payment demands at the last minute.
All that’s left is to move in! (And pay your tax one year after your moving in dates of course)
Niseko is an increasingly popular investment opportunity for serial investors and powder hungry skiers alike – and for good reason.
In fact, in the past year alone there were nearly $1 billion (USD) of real estate transactions in Niseko alone. There is plenty of choices available, and with the 2020 Olympics just around the corner, investment is only set to rise in the coming months.
So, what are you waiting for?