My Japanese wife and I are planning to build a house with Ichijo and we found an 84 tsubo lot in our budget. The lot is listed by a broker so there will be a fee. They accepted our offer of 2 million yen less than asking price, under one condition: They don’t want to sign the deed/title over until January. We weren’t yet given any details on why they want to wait.
At first this seems very odd to me, and a red flag. But on second thought, we can’t even begin construction until next March anyway, since Ichijo is so busy. It sounds like we can pay earnest money of 1-2 million and then not have to pay property tax this year on the land, which sounds okay. And we’ll continue to save more money for land and construction costs until next spring.
Primary questions are:
1. How common is this broker/owner’s ask? Maybe the broker/owner wants the tax deduction on the land for another year? Or might there be something else going on to be concerned about?
2. Speaking of property tax, how can I determine the tax for an 84 tsubo lot? I can ask Ichijo or broker, but wondering if there is a website to calculate this for future reference. We will likely continue to look around.
3. My wife has been handling the consultations with Ichijo since I don’t speak Japanese very well yet. This is fine since everyone is on the same page and I’ve researched Ichijo pretty extensively at this point. Are there other gotchas to be aware of and avoid? The lot will be tested by Ichijo for liquefaction (initially looks fine) and the lot is not in any hazard area/map.
4. Gift taxes. My Japanese wife plans to ask her father for some financial help. I may ask my father in the US, maybe. I am non-PR, and not a permanent tax resident (here less than 5 years). What are the tax implications for receiving gift money toward this purchase?
We were initially planning on buying the lot in cash. I believe we could get a mortgage for both land and construction, but the timing is weird. It doesn’t make sense to get a mortgage on a lot/build package that won’t start until next March. Not sure how that would work. Anyone dealt with this scenario?
My wife got a pre-approval by herself on a 13 year mortgage at 1.6% adjustable, which I know is very high. But that was just to move the process forward; we’re not signing it. Together we grossed about 19 million last year. So we’ll apply jointly for a permanent mortgage at some point and (hopefully) a better rate. I should add that we’re in our early 50’s so we plan to pay off any mortgage within 15 years or less. A flat 35 won’t work, so we’ll likely go with an adjustable and keep cash on hand.
Any other advice or experience to share is greatly appreciated.
by -hayabusa