Thoughts on the future of the real estate market of Tokyo

This is a continuation of my previous post on buying vs renting in Tokyo

The future resale price of a property depends on demand: are there going to be people willing and able to purchase it? Let’s look into the forecasts affecting this. I will try my best to use official (government) statistics and forecasts, even if these are a few years outdated.

Thoughts on renting vs buying in Tokyo

Recently I’ve been thinking a lot about buying either a house or an apartment (mansion), or whether renting makes more sense for now. The primary aim of this post is to collect my thoughts, and record the decision so that I can revisit it in the future. It might also help others considering the same question, but that’s not the main intention (e.g. I will focus exclusively on my use-case and not cover other locations or sizes).

All-World ETFs for NISA

My go-to investment is the Vanguard Total World Stock ETF (VT) that includes stocks in close to all companies of the world, so as long as the world economy does well, it goes up. Being a US-based security the dividends are subject to a 10% tax withholding in the US (regardless of me not having to file US taxes). This is not an issue for regular investments, as Japan levies a 20% tax on dividends and due to the tax treaty with the US I can deduct the already paid 10% and only pay the other 10% in Japan (I’m using Interactive Brokers, so I’m doing this myself when filing my taxes).

However I also started doing NISA recently, which is tax-exempt, so I don’t need to pay taxes in Japan on neither the capital gains nor the dividends. But this does not affect the 10% dividend tax levied in the US. So I set out to find a comparable investment that is domiciled outside the US.

Shared bank account for non-married couples in Japan

The internet wisdom seems to agree that shared accounts (or joint accounts) are illegal and impossible in Japan. As a workaround some banks will issue a second card in the name of the spouse (e.g. SMBC), however that’s generally only available for married couples.

So if you live with a partner, but not married, you are out of luck? Not entirely.