Best Way to Transfer Money to Japan for Real Estate

As a service to our clients, we present original OsakaAgents.com research on the best ways to transfer money for a real estate transaction in Japan.

No one likes to pay unnecessary fees. When you make international money transfers to Japan, you potentially pay two different fees to complete the transaction: 1.) There may be wire transfer fees (usually a modest, flat fees), with 2.) a second, much bigger, percentage-based fee for currency exchange (as you convert your currency to Japanese yen, JPY). When you are buying property in Japan, making the right choice for a wire transfer can save you thousands of dollars.

Below we share our original research on the best way to transfer money to Japan for real estate. We show you how much you can save, and we provide our recommendations for the best money transfer services to Japan. We also discuss our experience of what the local Japanese real estate agents and brokers say to their clients when it’s time to move money to Japan to buy a condo, investment property, and more.

Fees to Transfer Money to Japan for Real Estate

Here we provide a list of banks and third-parties services that can help you send money to Japan. We also provide estimates for total fees, based on a typical condo purchase.

How/When to Use a Wire Transfer for a Real Estate Purchase in Japan

On the day your purchase of property in Japan is due to complete, the purchase funds are expected to be transferred “in real time” as onwership is transferred. Because title escrow companies in Japan are rare (and because they add additional fees), it is common to wire money directly into a bank account in Japan (to your agent’s company account or direct to the seller) before the purchase is completed.

Do not try to make an international money transfer on the day of closing. The best solution is to transfer money into Japan several days before closing, and then to transfer the money locally from a Japanese account to the seller’s account in the closing meeting.

If you already have a bank account in Japan, you can transfer the funds from your foreign bank to your local Japanese account in advance. Because most Japanese banks won’t issue bank accounts to non-resident foreigners, the most common solution for real estate transactions is to transfer the money to their agent’s real estate company bank account in the days before the transaction, and the agent then sends the funds for purchase to the seller during closing.

Buyers usually get a preview of the options to transfer money to Japan when they make the deposit on the property. Because the day the deposit is due is less important than the day of closing, that transfer can accommodate some delays. On the final closing day, however, there is no flexibility, so all the money transfer planning must be taken care of in advance.

Example of Wire Transfer Fees in a Japanese Real Estate Transaction

The cost for wire transfer and currency exchange as you buy real estate in Japan is a small percentage, but the total amount (on a large transaction) can be significant. If you want to save potentially millions in Japanese yen, choose your Japanese money transfer method carefully.

Wire transfer fees can easily be 0.75% of the total a real estate transaction (using typical Japanese banks)
For a typical purchase of a condominium in Japan, the wire transfer fees could easily be 1,000,000 JPY or more

We recently posted about the average cost to buy a condominium in Osaka. Using an average price of 89,505,000 JPY, the fee to transfer money using a Japanese bank (the kind many agents will ask you to use) is about 637,247 JPY (0.71%). There are often additional wire transfer fees when you pay the real estate acquisition tax (wire fees, in our example, are an additional 0.02%), bringing the expense to move the money for purchase up to 0.73% of the total cost.

Sample Wire Transfer/Currency Exchange Costs for Average Condo Price of 93,712,784 JPY
Best Japanese bank transfer/currency exchange cost is 93,713 JPY (0.10%, from Sony Bank)
Best money transfer service transfer/currency exchange 281,138 JPY (0.30%, from Wise)
Typical Japanese bank transfer/currency exchange cost is 637,247 JPY (0.68%, from SMBC Bank)

The numbers above are based on the average cost of a condo in Osaka. For that kind of purchase, if you have access to a Sony Bank account in Japan, you can save almost 200,000 JPY over your next best option. Based on our research, the money transfer service in Japan from Wise is the second best option (probably the absolute best option) for most foreigners buying real estate in Japan.

Using most local or national banks in Japan will mean you’re paying much higher fees than you should.

For markets like Tokyo where properties are more expensive, getting a better rate to transfer funds to Japan for a real estate purchase is even more important. When property prices rise to over 200,000,000 JPY, the typical 0.68% charged by Japanese bank can mean you’ll add over 1,000,000 to the total cost for the property.

This is especially true for foreigners buying investment property in Osaka and other markets. When you’re buying an apartment building for investment in Osaka, a 400,000,000 JPY purchase price could be almost 3,000,000 JPY in fees for wire transfer alone (using typical Japanese banks as the receiver).

Choose the best service, and you’ll save a lot of money. Paying attention to the rate you pay to convert your currency to JPY is worth the effort.

Our Recommendation for Moving a Large Amount of Money to Japan

Based on the lowest fees for international wire transfer to Japan, our research shows both Sony Bank and MUFG Bank offer the best rates. For foreigners that do not have residency in Japan, most Japanese banks like Sony/MUFG will not allow you to open an account. Unless you or your agent has an account with these banks, it is hard to take advantage of those lower rates.

Most national banks will not offer foreigners bank accounts until they have lived in Japan for at least six months. Local banks are the same. If you don’t reside full-time in Japan, it is difficult to maintain a local bank account.

If you are buying real estate and do not have access to Japanese bank account, our research shows that Wise money transfer service is currently the best option for money transfer.

Using Wise to Transfer Money to Japan

If you read down that list of money transfer services in Japan we present above, you’ll see two examples of the fees to use Wise to transfer money to Japan. We have personal experience with Wise. We have clients that have used Wise. As we talked to some of the local agents we work with, Wise came up again and again as the most successful, most recommended, low-cost way to bring money to Japan to buy property.

Wise refers to itself as a “Foreign exchange provider.” With Wise, you can keep a balance in Japanese yen (you can move money between balances in several different currencies), or make a one-time transfer to a local account in Japan. Wise offers a much better rate than all the other money transfer services we researched, and is generally about 50% less expensive than trying to wire money directly to a Japanese bank. For large transfers, you can contact Wise directly and get their “large transfer rate” (0.03%).

While it’s less common, we also have experience using Wise to transfer money from a Japanese bank out of the country. In that case, the Japanese bank (SMBC) was very difficult; insisting they take a fee for currency exchange first, and then wire the funds to the foreign bank. They eventually had to admit it was possible to send JPY (with no exchange fee) to Wise (via an intermediary), allowing for a lower transfer cost for JPY out of the country.

Advice from Local Japanese Real Estate Agents about Money Money to Japan

The majority of real estate agents and brokers in Japan do most of their transactions with other residents of Japan. Money transfers for real estate for native Japanese are easy; they originate from Japanese banks and are sent to Japanese banks. In our experience, even if the agent speaks English, and works with international clients, they will request funds “in Japanese yen” and will commonly ask that you send those funds directly to the account they use for their real estate company (which includes a large fee from their bank).

Local Japanese agents will ask you to transfer money to their bank account, which is typically a local Japanese bank in their market. As you can see in our research above; local banks charge about 0.68%, while alternatives like Wise charge 0.30% for the same transaction.

There are agents, however, that have done a lot of transactions with international clients, and many of these agents also recommend Wise. As we we wrote this piece, we called multiple agents, in multiple markets, and the only recommendation we heard was “Wise.”

Begin Your Money Transfer to Japan 10 Days in Advance of Closing

On the day of closing, you and several real estate professionals will get together to complete the paperwork, pay some fees (stamp tax, the fee to your agent, fee for the scrivener), and to complete the transfer of the purchase price. Any delays will make the process longer, possibly more expensive, and more stressful. To avoid having any trouble at closing, we recommend you begin ensuring your funds in Japan and available for closing 10 days in advance of the closing date for the transfer of the property.

There are often delays at the banks on both sides of the money transfer – at the originating bank and at the receiving bank.

For foreigners that have their funds in their own country (in their home currencies), preparations can be made in advance. It may take time for your bank to initiate the transfer. There are commonly problems as clients try to set up international wire transfers online, with security checks, questions about routing, and more. The bank in your home country may want to verbally confirm with you personally before sending large money transfers overseas. Because of the timezone difference, there may be delays in receiving and processing the money.

To avoid any problems at closing, you can begin this process several days before closing. You can schedule the out-going international wire transfer to Japan in advance, planning for the money to arrive in Japan many days before closing, but also scheduling the transfer date in advance, and communicating with your bank that everything is set up and clear for the expected date.

A Follow-up Question About the Lowest Rates to Transfer Money to Japan

The question we have as we wrap up this piece is: Why don’t more agents and brokers in Japan have Sony Bank accounts? Or accounts with MUFG?

Per our research above, the lowest rates – even lower than Wise – were from Sony and MUFG. While foreigners typically cannot open accounts with Japanese banks, the Japanese real estate company can. If local Japanese real estate companies had Sony Bank accounts, their clients could do international money transfers to the broker’s Sony account, and pay the lowest fees in the market. In theory, that would be a good solution.

Local Real Estate Agents in Japan

When you’re ready to work with an agent to find property in Osaka (or anywhere in Japan), contact us for a free introduction to a local, Japanese real estate agent.

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