The estimate you receive from a real estate company includes a number of separate cost items. This article breaks down the costs involved in selling a condo — the brokerage commission, stamp duty, registration costs, and more — item by item, and walks through how to check an estimate.
- The main costs when selling are the brokerage commission, stamp duty, mortgage discharge registration costs, and (if there's a capital gain) tax.
- The commission cap is roughly (selling price × 3% + ¥60,000) plus consumption tax, as a guideline (for properties over ¥4 million).
- The sale contract is subject to stamp duty, with the amount set according to the contract price.
- If a mortgage remains, you'll need mortgage discharge registration costs and to pay off the remaining balance in full.
- Net proceeds are calculated by subtracting the remaining loan, costs, and any tax from the selling price.
Brokerage Commission (Chūkai Tesūryō): Points to Check in Your Estimate
The brokerage commission is the success fee you pay to a real estate company when it finds a buyer and the sale closes. For properties selling above ¥4 million, the guideline cap is (selling price × 3% + ¥60,000) plus consumption tax. For example, on a ¥30 million sale, the commission cap comes to roughly ¥960,000 before tax. Different rates apply to the portions of the price at or below ¥2 million and between ¥2 million and ¥4 million, so the calculation method changes for lower-priced properties. It's common to pay half at the sale contract and the remaining half at settlement and handover. When you receive an estimate, it's worth checking how it compares to the cap, whether the figure includes consumption tax, and the payment timing (the split between contract and handover).
Stamp Duty (Inshizei)
Stamp duty applies when you draw up a sale contract. The amount is set according to the price stated in the contract — for example, for contracts between ¥10 million and ¥50 million, the reduced rate is around ¥10,000 as a guideline (rates and reduced-rate measures can change, so check the latest information at the time of your contract). It's standard for the seller and buyer to each affix stamps to their own copy of the contract.
Mortgage Discharge Registration Costs (If a Loan Remains)
If you still have a mortgage on your condo, you'll need to pay off the remaining balance in full at settlement and, at the same time, go through the registration procedure to discharge the mortgage. The cost of a mortgage discharge registration — combining the registration license tax and the judicial scrivener's fee — typically comes to a few tens of thousands of yen as a guideline. Some financial institutions also charge an administrative fee for early full repayment, so it's worth checking that as well. You'll need to confirm the repayment schedule with your lender before settlement.
Other Costs That May Apply
Beyond the above, you may also face moving costs, house-cleaning costs, renovation or repair costs if needed, and discharge costs if there's a mortgage other than your existing home loan. If a capital gain (jōto shotoku) arises, you'll also owe income tax and resident tax through your final tax return. (We cover taxes in a separate article in more detail.)
How to Calculate Your Net Proceeds
Net proceeds are calculated by subtracting the following from your selling price: the lump-sum repayment of any remaining mortgage, costs such as the brokerage commission and stamp duty, and any tax owed on a capital gain. As a formula: Net proceeds = selling price − (remaining loan + brokerage commission + registration costs + stamp duty + tax). The full selling price doesn't simply stay in your pocket, so working out a rough breakdown in advance makes it easier to plan your next move, such as a subsequent purchase.
A Cost Checklist to Review Before Selling
Understanding the cost breakdown ahead of time gives you a useful basis for deciding on your asking price. In particular, it's worth checking early on whether you're in an "over-loan" situation — where your remaining mortgage balance plus costs exceeds the selling price. If you are, financing plans such as covering the gap with your own funds or using a bridge loan for your move become more important to arrange in advance. Checking the estimated brokerage commission, stamp duty, registration costs, and tax one by one, and comparing the total against your remaining loan and selling price, is a key step in avoiding mistakes in your financing plan.
Frequently Asked Questions
When do I pay the brokerage commission?
It's common to pay half at the sale contract and the remaining half at settlement and handover.
Can I sell if I still have a mortgage remaining?
Yes, as long as you can pay off the remaining balance in full at settlement using the sale proceeds and discharge the mortgage at the same time. If the remaining balance exceeds the selling price, you'll need to review your financing plan.
How can I check my net proceeds?
A real estate company can calculate an estimated net proceeds figure for you, based on your expected selling price minus costs and any remaining loan balance.
Summary
Selling a condo involves costs such as the brokerage commission, stamp duty, and mortgage discharge registration, and if a capital gain arises, tax as well. Since net proceeds are calculated by subtracting all of this from your selling price, it's worth working out a rough estimate early on.