How Real Estate Commission Works in Japan
In Japan, real estate commission is not an unrestricted percentage chosen by the agent. The maximum amount a licensed broker can charge is regulated under the Real Estate Brokerage Act.
For most property transactions above ¥8 million, the commonly used maximum calculation is:
Purchase price × 3% + ¥60,000, plus consumption tax
This is a statutory ceiling—not a mandatory fee. The actual commission must be agreed between the broker and client and may be negotiated below the maximum.
Who pays the commission?
Typically, the seller pays their appointed broker and the buyer pays their own broker, with each party paying up to the permitted maximum.
Japan also allows one licensed brokerage to represent both parties. In that situation, the brokerage may receive a fee from both the seller and buyer, provided each fee remains within the applicable ceiling.
The Ministry of Land, Infrastructure, Transport and Tourism confirms that the amount received from each client is capped and should be agreed when the brokerage agreement is signed.
Are fees different for very large transactions?
There is no automatic exemption from the statutory commission ceiling for transactions above ¥2 billion.
Fees on major residential, hospitality and development transactions may be commercially negotiated, but the brokerage commission must still remain within the regulated maximum. Separate advisory, consulting or development services should be clearly defined rather than presented as brokerage commission.
What should buyers budget?
As a general starting point, many buyers budget approximately 8–10% above the purchase price, although the final figure depends on the property, financing, ownership structure and applicable tax treatment.
These costs may include:
Brokerage commission
Stamp duty
Registration and licence tax
Real estate acquisition tax
Judicial scrivener fees
Legal or tax-advisory fees
Loan and bank charges, where applicable
Consumption tax on qualifying buildings and services
The deposit is part of the purchase price rather than an additional transaction cost. Sumitomo Real Estate Sales provides a useful breakdown of amounts commonly payable at contract signing and settlement.
What does this mean for foreign buyers?
Japan’s regulated framework makes the brokerage component relatively predictable. The greater risk is entering a transaction without understanding which costs apply, when they become payable and who is responsible for each one.
Before signing, foreign buyers should request a written cost schedule covering the acquisition, ownership structure and expected settlement expenses.
Japan’s property system is highly structured. Once you understand that structure, you can approach the transaction with greater clarity—and fewer surprises.
Disclaimer: This article provides general information only and does not constitute legal, tax, financial or investment advice. Commission calculations, taxes and transaction costs should be confirmed for the specific property and transaction.
Photo: Yurika/Pexels.
