The key points of the important-matters explanation to read before introducing a Japanese income property to a Chinese-speaking buyer

In short: before you introduce a Japanese income property to a Chinese-speaking buyer, the document to read is the important-matters explanation under Article 35 of the Building Lots and Buildings Transaction Business Act. It is a statutory step in which, before the contract is formed, a licensed transaction specialist delivers a written document and explains it — registered rights, statutory restrictions, private-road burdens, utilities. Where the buyer is a non-resident, the reporting under the Foreign Exchange Act and the tax checks come on top of it, first.

This is for the on-the-ground professionals in mainland China, Hong Kong and Taiwan who handle Japanese real estate investment, and for their non-resident investor clients. It focuses not on managing a property after purchase but on which parts of the important-matters explanation to read before buying. We handle the Japan-side property introduction and brokerage; the Foreign Exchange Act reporting, the tax and the registration are each routed to a separate qualified professional.

Which items of the important-matters explanation drive the investment decision on an income property?

Article 35, paragraph 1 of the 宅地建物取引業法 (Building Lots and Buildings Transaction Business Act, Act No. 176 of 1952) provides that a real estate transaction business operator must, before the contract is formed, have a licensed real estate transaction specialist deliver a document setting out at least the statutory matters and explain it. It is the transaction specialist, not the operator, who explains, and delivery of the document is a precondition. An amendment in force 18 May 2022 made it possible, with the other party's consent, to deliver the document by electromagnetic means — easier for distant and overseas buyers.

The items that most often drive the decision on an income property are these.

Article 35 item	Content	Effect on the investment decision
Item 1	Type and content of registered rights; registered holder	A mortgage or leasehold that squeezes the yield
Item 2	Restrictions under the City Planning Act, Building Standards Act, etc.	Use, rebuilding, floor-area — the exit value
Item 3	Private-road burdens	Frontage, share, right of passage
Item 4	State of water, electricity and gas supply and drainage	The infrastructure needed to operate
Item 7	Money to be exchanged besides the price	Deposit, settlement — the funding plan
Item 8	Matters on cancellation of the contract	Terms on exit

Read the burdens and restrictions before the yield figure — that is the starting point of due diligence on an income property. The gross yield ties directly to none of the items in the important-matters explanation.

How should rights and statutory restrictions be explained to a Chinese-speaking buyer without misunderstanding?

Not by swapping words, but by explaining from the premise of the system. Japan's registration system and use-zoning differ from those of mainland China, Hong Kong and Taiwan, so translating single terms leaves misunderstanding.

For example, Japan's registered rights (Article 35, item 1) publicise mortgages and leaseholds per parcel of land and per building. Statutory restrictions (item 2) tie directly to the uses permitted by the use-zoning and to whether rebuilding is possible. The idea of use-zoning is also handled in What to check before signing on a clinic property. When a local professional explains to a client, mapping to the statute — "in Japan, this item of this document says this" — leaves less room for misunderstanding than an oral summary. We support materials in Traditional and Simplified Chinese, and the way of working together with a local professional is set out in Working with a local professional to handle Japanese real estate.

When the buyer is a non-resident, what foreign-exchange and tax checks are needed first?

Where a buyer without an address in Japan (a non-resident) acquires Japanese real estate, the Foreign Exchange Act and tax checks come on top of, and before, the important-matters explanation.

Issue	What to check	Who
Reporting under the Foreign Exchange Act	Whether a non-resident's acquisition of Japanese real estate is subject to reporting under the Act; the treatment splits by purpose (residence, business, investment)	Administrative scrivener / specialist
Withholding and filing on rent	Withholding and filing where a non-resident leases Japanese real estate; the tax agent notification	Licensed tax accountant
Tax on sale	Tax on the gain; whether the buyer must withhold	Licensed tax accountant
Transfer-of-ownership registration	The name-change registration	Judicial scrivener

The 外国為替及び外国貿易法 (Foreign Exchange and Foreign Trade Act, Act No. 228 of 1949) contains provisions requiring reporting on, among other things, transactions between residents and non-residents. Whether a non-resident's acquisition of Japanese real estate is subject to reporting splits by the purpose and manner of acquisition, and residential use or one's own business office is treated differently. An income property for investment may require reporting. Which report applies, and the forms and deadlines, follow the guidance of the Ministry of Finance and the Bank of Japan, so we do not make that determination. Consult an administrative scrivener or specialist directly. On tax, too, whether withholding is required, the rate, and whether a tax agent is needed vary with the non-resident classification and the terms of the contract. On post-holding management and withholding, see Managing Japanese real estate while living abroad; on non-resident rent withholding, Withholding when a non-resident receives Japanese rent.

Where do the local professional and the Japan-side real estate agent divide the roles?

The Japan-side property introduction, investigation, important-matters explanation, brokerage and contract are ours; the rest is divided.

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Investigation of the Japan-side property, the important-matters explanation, adjusting price and terms, brokerage and the sale contract are handled by Yotsuba Real Estate Co., Ltd. (licensed real estate agent, Tokyo Governor (1) No. 113304). The important-matters explanation is given by our licensed transaction specialist under Article 35. The local professional (in mainland China, Hong Kong or Taiwan) and we are each independent business entities. Where roles overlap, we make clear before the contract who does what, and you engage each separately.

Reporting under the Foreign Exchange Act is for an administrative scrivener or specialist; withholding, filing and the tax agent notification for a licensed tax accountant; transfer-of-ownership registration for a judicial scrivener — each engaged by you directly. We neither pay nor accept referral fees or introduction commissions. The whole picture of investment and business property is gathered at investment and business property consultation. Consultation is free of charge.

Frequently asked questions

Q. Can the important-matters explanation be received while the buyer is outside Japan?
A. Since the amendment in force 18 May 2022, the document may, with the other party's consent, be delivered by electromagnetic means, and explanation by video conference is permitted under certain conditions. That a licensed transaction specialist explains under Article 35 is unchanged. An overseas buyer can be accommodated once identity verification and the method of consent are arranged.

Q. Is a property with a high gross yield simply a good investment?
A. The gross yield ties directly to none of the items in the important-matters explanation. What Article 35 lays out is the current state of registered rights, statutory restrictions, private-road burdens and utilities. Read the burden of a mortgage or leasehold and the use and rebuilding restrictions first, then consider the cash flow. We set out the general points to check, and do not judge the merits of the investment.

Q. Does a non-resident buying a Japanese income property always require a Foreign Exchange Act report?
A. Not uniformly. Whether a non-resident's acquisition of Japanese real estate is subject to reporting splits by the purpose and manner of acquisition; residential use or one's own business office is treated differently. Investment purposes may require reporting. Applicability, forms and deadlines follow the Ministry of Finance and Bank of Japan guidance, so confirm with an administrative scrivener or specialist. We do not make that determination.

Q. Will the Japan-side agent handle the tax on rent and sale proceeds?
A. No. Non-resident rent can involve withholding, and tax — including filing and the tax agent notification — is the work of a licensed tax accountant. We handle the property introduction and brokerage, but do not calculate the tax or judge whether withholding applies. Transfer-of-ownership registration is for a judicial scrivener — each engaged directly.

Sources (primary)

• e-Gov "宅地建物取引業法" (Building Lots and Buildings Transaction Business Act) — Act No. 176 of 1952. Art. 35 (1) (important-matters explanation; a licensed transaction specialist delivers a document and explains it before the contract is formed); item 1 (registered rights); item 2 (statutory restrictions); item 3 (private-road burden); item 4 (state of utilities); item 7 (money besides the price); item 8 (cancellation of the contract). Delivery of the document by electromagnetic means is per the amendment in force 18 May 2022. Accessed 23 August 2026.
• e-Gov "外国為替及び外国貿易法" (Foreign Exchange and Foreign Trade Act) — Act No. 228 of 1949. Provisions on reporting for transactions between residents and non-residents; the treatment of a non-resident's acquisition of Japanese real estate varies by purpose and manner. Accessed 23 August 2026.
• Ministry of Finance, inward direct investment and specified acquisition system — the framework for reporting and notification under the Foreign Exchange Act; individual applicability follows the guidance and forms. Accessed 23 August 2026.
• Ministry of Land, Infrastructure, Transport and Tourism, important-matters explanation and document delivery — the forms of the important-matters explanation and the idea of the online explanation. Accessed 23 August 2026.

Whether a non-resident's acquisition of Japanese real estate is subject to reporting under the Foreign Exchange Act, and its forms and deadlines, vary with the purpose and manner of acquisition and current practice. This article does not fix this uniformly, and leaves it to the Ministry of Finance and Bank of Japan guidance and a specialist's confirmation (individual applicability is treated as unverified). Whether withholding applies to non-resident rent or transfers, the rate, and whether a tax agent is needed vary with classification and contract terms; no specific tax amount or rate is asserted here. This article is general information and does not offer an individual legal or tax determination. Reporting under the Foreign Exchange Act is carried out by an administrative scrivener or specialist, tax by a licensed tax accountant, and transfer-of-ownership registration by a judicial scrivener. Investigation, important-matters explanation, brokerage and the sale contract on the Japan side are undertaken by Yotsuba Real Estate Co., Ltd. (licensed real estate agent), which works with local professionals as independent business entities engaged separately. There are no referral or introduction fees.

About the author

Joji Uramatsu — licensed real estate transaction specialist (Tokyo Governor registration No. 293544) and administrative scrivener (registration No. 25087022). Representative Director, Yotsuba Real Estate Co., Ltd. (licensed real estate agent, Tokyo Governor (1) No. 113304); principal, Yotsuba Administrative Scrivener Office. Kohinata, Bunkyo, Tokyo, about five minutes' walk from Myogadani station. Supporting materials in Traditional and Simplified Chinese, for Chinese-speaking buyers and their local professionals, mapping the items and articles of the important-matters explanation. Full profile: author page.