Direct purchase by a company (買取) or brokerage (仲介) — how much do the net proceeds differ? Laying out everything that is deducted

Compare net proceeds, not the headline price. Brokerage brings a commission, the cost of holding the property until it sells, and the possibility of a price reduction. Direct purchase by a company carries a different kind of value, in that liability for non-conformity with the contract can be disclaimed; but facts you knew and did not disclose are not escaped.

Why a direct purchase price comes in below the open-market level is covered in Feature: selling property when you leave Japan. This article picks up from there: it is the one that lays out everything that comes off the price. It does not state a conclusion about which is the better deal.

What is the difference between direct purchase and brokerage?

What comes off the price is different. In brokerage the buyer is a third party (usually an individual), brokerage remuneration arises, and the price is not fixed until a buyer appears. In direct purchase the buyer is a licensed real estate company (宅地建物取引業者), the price is presented up front, and a clause disclaiming liability for non-conformity with the contract can be included (subject to the limit set by the Civil Code (民法), Article 572). Where we buy the property directly ourselves there is no brokerage, so no brokerage remuneration arises; where we act as broker into another company's direct purchase, it does. Please confirm which of the two forms you are in before signing.

How much brokerage commission can be charged?

The ceiling is set by the state through a public notice (告示).

The Building Lots and Buildings Transaction Business Act (宅地建物取引業法), Article 46 provides that the amount of remuneration is as determined by the Minister of Land, Infrastructure, Transport and Tourism, that no amount exceeding it may be received, that it must be published as a public notice, and that it must be displayed at each office in a place readily visible to the public (paragraphs 1 to 4).

That public notice is the one titled 「宅地建物取引業者が宅地又は建物の売買等に関して受けることができる報酬の額」 (Amount of remuneration a licensed real estate company may receive in connection with the sale, purchase and the like of building lots or buildings) — the notice number, last amendment and effective date are in the sources table at the end. Brokerage for sale, purchase and exchange is governed by Item 2 of the notice. Per party to the engagement, the ceiling is the total obtained by dividing the price into bands and applying a rate to each band.

Band of the price	Rate applied
The portion of 2 million yen or less	5.5 per cent
The portion above 2 million yen and up to 4 million yen	4.4 per cent
The portion above 4 million yen	3.3 per cent

These rates are figures that already include the amount equivalent to consumption tax etc.

The formula "3% + 60,000 yen + consumption tax" does not appear in the public notice. What the notice sets out is only the band calculation above. Where the price exceeds 4 million yen, tidying that calculation up produces a figure identical to "price × 3% + 60,000 yen" plus consumption tax. It is a derived result, not the wording of the rule.

For agency, Item 3 of the notice sets the ceiling at twice the amount calculated under Item 2. Under Item 11(1) of the notice, no remuneration may be received other than under these provisions. The only exception is the cost of advertising carried out at the request of the client.

Is the commission higher for properties priced at 8 million yen or less?

It can be higher. The ceiling, however, is 330,000 yen.

Item 7 of the notice (special rule for brokerage in the sale, purchase or exchange of low-priced vacant houses and the like) treats a building lot or building priced at 8 million yen or less as a "low-priced vacant house or the like", and allows remuneration exceeding the amount calculated by the method in Item 2, taking into account the expenses required for that brokerage. The ceiling, however, is 300,000 yen multiplied by 1.1.

Category	Ceiling
Brokerage of a low-priced vacant house or the like (Item 7 of the notice)	330,000 yen
Agency for a low-priced vacant house or the like (Item 8 of the notice)	660,000 yen

There is a trap here. Where the price is exactly 8 million yen, the ordinary calculation also produces 330,000 yen (8,000,000 yen × 3% + 60,000 yen = 300,000 yen, plus the amount equivalent to consumption tax etc. = 330,000 yen). The special rule only has meaning where the price is below 8 million yen.

Although the label says "vacant house", the administrative circular 「宅地建物取引業法の解釈・運用の考え方」 (How the Building Lots and Buildings Transaction Business Act is to be interpreted and applied, as amended 1 July 2024) states that for building lots and buildings priced at 8 million yen or less "the state of use is not asked about". A property that is not vacant is also covered. The same circular requires that, on entering into the engagement, the amount of remuneration be explained in advance within the ceiling and agreed. It is not something to be billed after the fact.

What goes out while the property is on the market?

With brokerage, the costs of holding the property keep going out until a buyer is found.

Item	Statutory basis
Management fees and the repair reserve fund (for a condominium unit)	Act on Building Unit Ownership, etc. (建物の区分所有等に関する法律), Article 19
Fixed asset tax	Local Tax Act (地方税法), Article 350, paragraph 1 (the standard tax rate is 1.4 per cent)
City planning tax	Local Tax Act, Article 702-4 (may not exceed 0.3 per cent)

These two taxes are legally different in nature. The 1.4 per cent for fixed asset tax is a standard tax rate, and a municipal ordinance may set a rate different from it. The 0.3 per cent for city planning tax is a maximum tax rate — that is, a ceiling. The rates actually applied across Tokyo's 23 wards are 1.4 per cent and 0.3 per cent.

Residential land benefits from a special rule on the tax base: for small-scale residential land (the portion up to 200 m² per dwelling unit), fixed asset tax is assessed on the value × 1/6 and city planning tax on the value × 1/3. The 23 wards further reduce that city planning tax by half of the tax amount (this continues in FY Reiwa 8).

There is a commercial custom of settling fixed asset tax and city planning tax between the parties on a pro rata daily basis, but the Tokyo Metropolitan Bureau of Taxation states that it "is not something provided for under the Local Tax Act" and that it "is done purely by agreement between the parties". It is not a right that exists automatically as a matter of law.

Note also that there is no tax called a "repair reserve tax". It is the "repair reserve fund" (修繕積立金). Beyond these, basic utility charges, fire insurance premiums, neighbourhood association dues, mortgage interest, and weeding, airing and running the water are generally incurred as well. These have no statutory basis.

With a direct purchase, does liability after the sale disappear?

It does not. This is the heart of this article. Where what is delivered does not conform to the terms of the contract, the buyer may make a demand for cure (repair, or delivery of a substitute or of the missing part — Civil Code, Article 562, paragraph 1), a demand for price reduction (Civil Code, Article 563, paragraphs 1 and 2; as a rule a demand for cure must be made first, and it is unnecessary in the four cases such as where cure is impossible), and a claim for damages and cancellation of the contract (Civil Code, Article 564).

The time limit is in the Civil Code, Article 566. As to non-conformity in kind or quality, if the buyer does not notify the seller of it within one year from the time the buyer became aware of the non-conformity, the buyer loses the ability to make those demands. It is "notify within one year", not "claim within one year". This does not apply, however, where the seller knew of the non-conformity at the time of delivery or did not know of it through gross negligence.

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Next comes the Building Lots and Buildings Transaction Business Act, Article 40. Paragraph 1 of that article opens with the words: "In a contract for the sale and purchase of a building lot or building in which a licensed real estate company is itself the seller". Apart from a clause setting the period under the Civil Code, Article 566 at two years or more from the date of delivery, no clause less favourable to the buyer than that article is permitted, and a clause that contravenes this is void (paragraph 2).

Situation	Seller	Buyer	Article 40
An individual buys from a licensed company	Company	Individual	Applies
An individual sells to an individual through brokerage	Individual	Individual	Does not apply
Direct purchase (an individual sells to a company)	Individual	Company	Does not apply
Between licensed companies	Company	Company	Does not apply (Article 78, paragraph 2)

In a direct purchase the seller is an individual and the buyer is a company. Article 40 is a provision about a licensed company that "is itself the seller", so it does not operate on a direct purchase. A disclaimer clause can therefore be included.

But there is the Civil Code, Article 572. That article provides that even where a clause has been agreed under which the seller bears no warranty liability, the seller cannot escape liability as to facts the seller knew and did not disclose, or as to rights the seller has itself created for a third party or transferred to a third party.

A disclaimer clause works on "what you did not know". It does not work on "what you knew and did not say". Water leaks, tilting, termites, faults in the water supply and drainage, disputes with the neighbours — write everything you know into the disclosure statement. A disclaimer on top of full disclosure holds; conceal something and it does not.

So how do I work out the net proceeds?

Take the price you are shown and subtract, one by one, the things that come off it.

What is deducted	Brokerage	Direct purchase	Basis
Brokerage remuneration	Arises, within the ceiling in the public notice	Does not arise on a direct purchase	Items 2 and 7 of the notice
Advertising costs incurred at the client's request	Only where requested	—	Item 11(1) of the notice
Management fees and the repair reserve fund	Keep going out until it sells	Smaller, to the extent the period is shorter	Condominium Ownership Act, Article 19
Fixed asset tax and city planning tax	As above	As above	Local Tax Act, Article 350, paragraph 1, and others
The possibility of a price reduction	There is one	The price presented up front	—
Liability after the sale	Depends on the contract clauses	A disclaimer clause is possible	Civil Code, Article 572

Beyond these, revenue stamps, registration costs and the judicial scrivener's fee, removal of the mortgage registration, and disposal of items left behind are generally incurred as well.

Here is a single worked example. It is purely an example to show the structure of the cost items.

Ceiling on brokerage remuneration for a price of 30 million yen	Amount
The portion of 2 million yen or less (5.5%)	110,000 yen
Above 2 million yen and up to 4 million yen (4.4%)	88,000 yen
The 26 million yen above 4 million yen (3.3%)	858,000 yen
Total (including the amount equivalent to consumption tax etc.)	1,056,000 yen

This matches "30,000,000 yen × 3% + 60,000 yen = 960,000 yen, plus the amount equivalent to consumption tax etc., giving 1,056,000 yen".

Calculating and filing tax is the work of a certified tax accountant (税理士), and applying for registration is the work of a judicial scrivener (司法書士). We will introduce you, but you contract with those professionals directly. We do not receive any referral fee.

What changes if I have a departure deadline?

The uncertainty of the timeline is itself what bites, as a cost.

With brokerage, the costs of holding the property keep going out until a buyer is found. How long that takes varies with the property, the price and the season. Once your departure date is fixed, the question becomes who takes on the fact that nobody knows when it will sell.

The delivery date also bears on how you are treated for tax. See Non-resident status is determined as of the delivery date and Selling after you leave Japan: what to do now.

Which one should I choose?

We do not state a conclusion. What follows are the axes on which the decision turns.

Question	Points towards direct purchase	Points towards brokerage
The deadline for delivery	Cannot be moved	Can be moved
Uncertainty about the price	You would rather not carry it	You can carry it
Liability after the sale	You want a disclaimer clause	The ordinary framework is fine
Holding costs	Heavy	Light
Handling viewings	Not possible	Possible

How to read the figure you are shown, and how to check the party you are dealing with, are in the related links below.

This article is general information. The conclusion changes with the clauses in your contract and the circumstances of the property. Individual judgments are made by a qualified professional after reviewing the documents.

Sources for this article

Law / public notice	Article / paragraph	Content	Effective date / last amendment
Building Lots and Buildings Transaction Business Act (宅地建物取引業法)	Article 46, paragraphs 1 to 4 / Article 40, paragraphs 1 and 2 / Article 78, paragraph 2	Limit on the amount of remuneration, the public notice, and display / restriction on clauses where a licensed company is itself the seller (a clause that contravenes this is void) / exclusion as between licensed companies	In force 1 April 2026 (last amended by Act No. 68 of Reiwa 7)
宅地建物取引業者が宅地又は建物の売買等に関して受けることができる報酬の額 (public notice)	Items 2, 3, 7, 8 and 11(1)	Remuneration for brokerage and agency, the special rule for low-priced vacant houses and the like, advertising costs	Ministry of Construction Public Notice No. 1552 of 23 October 1970 / last amended by Ministry of Land, Infrastructure, Transport and Tourism Public Notice No. 949 of 21 June 2024 / in force 1 July 2024
宅地建物取引業法の解釈・運用の考え方 (administrative circular)	—	Explanation and agreement in advance / the state of use is not asked about	As amended 1 July 2024
Civil Code (民法)	Article 562, paragraph 1; Article 563, paragraphs 1 and 2; Article 564	Demand for cure, price reduction, damages and cancellation	In force 24 June 2026 (last amended by Act No. 45 of Reiwa 8)
Civil Code (民法)	Articles 566 and 572	Notice within one year / even with a disclaimer clause, facts known and not disclosed are not escaped	In force 24 June 2026 (last amended by Act No. 45 of Reiwa 8)
Act on Building Unit Ownership, etc. (建物の区分所有等に関する法律)	Article 19	Bearing the cost of common elements	In force 1 April 2026 (last amended by Act No. 47 of Reiwa 7)
Local Tax Act (地方税法)	Article 350, paragraph 1; Article 702-4	Standard tax rate for fixed asset tax / maximum tax rate for city planning tax	In force 31 July 2026 (last amended by Act No. 2 of Reiwa 8)
Tokyo Metropolitan Bureau of Taxation	—	Rates in the 23 wards, the reduction for small-scale residential land, settlement is by agreement between the parties	Continues in FY Reiwa 8

The effective date and last amendment for each law will be confirmed and filled in before publication.

Related links

Page	URL
Feature: selling property when you leave Japan	/leaving-japan
A valuation and a bid are two different things	/column/satei-gaku-to-fuda-chigai
How to tell whether a company is licensed	/column/takken-menkyo-bangou-shoukai
Non-resident status is determined as of the delivery date	/column/hikyojusha-hantei-hikiwatashi-bi

This article is written by Joji Uramatsu, President of Yotsuba Real Estate Co., Ltd., a licensed Real Estate Transaction Specialist and administrative scrivener (行政書士). He spent 34 years as a journalist at the Mainichi Shimbun and was posted to China, Taiwan and Thailand as its China Bureau Chief. Kohinata, Bunkyo-ku — five minutes' walk from Myogadani Station.