Income only from stocks - House loan?

[gouro]

Theoretical question, if one (foreigner) relocates to Japan and has a Japanese spouse but monthly income only from stocks (not employed or freelancer), do banks consider it as income and could approve a loan only on that? A loan of 25m yen with a 10-20% deposit for example? Or they consider it too risky source of income?
A stock portfolio of about 150m yen and no other income nor permanent residence.

[Tkydon]

Are the Stocks in Japan, or overseas?

Very difficult, to nearly impossible...

Permanent Residence will probably be the killer.

And regular Japanese Banks like customers in stable employment...

If you get a Spouse Visa, and file all taxes and pay all Health Insurance and Pension Contributions, etc, you can probably get PR (Immigration Status) in about 5 years...

Without PR, I think you would be looking at a very high down payment, in excess of 30%, which is more like a commercial real-estate loan, with a much higher interest rate, maybe around 3%-4%

And the bank best known for these kinds of loans is Tsuruga Bank.

If you can show tax returns for the income after moving to Japan, I think you could at least ask them...

[gouro]

Thank you for the bank recommendation, yes spouse visa and transfer stocks to IB Japan…

[Wales4rugbyWC23]

SMBC quite friendly to non-PR holders, but three years of tax returns are still important.

[Tkydon]

Thank you for the bank recommendation, yes spouse visa and transfer stocks to IB Japan…

After moving to Japan, until you have been in Japan for more than 5 years in the last 10 years, Japan Sourced Income is always taxable in Japan, but Foreign Sourced Income from an overseas portfolio would only be taxable in Japan if you remit funds to Japan.

If you transfer your portfolio to IB Japan, then the income from that portfolio will be entirely taxable in Japan.
If you maintain any portion of your portfolio overseas, then the income from that portion of your portfolio would only be taxable in Japan if you remit funds to Japan in the tax year, until you have been in Japan for more than 5 years in the last 10 year.

The tax rate on investment income will probably be 20.315% (15% National, 0.315% Reconstruction, and 5% Residents' Taxes (Residents' taxes are payable from July of your second year in Japan on taxable income from your first calendar year in Japan)), plus the Income related portion of Healthcare Premiums at about 10% (depending on where you live, and payable from May of your second year in Japan on income from your first calendar year in Japan)...
(You only pay basic Healthcare Premiums from arriving in Japan until the following May, when the Income related portion of Healthcare Premiums kicks in.)

After you have been in Japan for more than 5 years in the last 10 years, all global income is taxable in Japan, whether you remit funds or not.

You probably want to consult with a qualified professional before transferring your portfolio or remitting funds to Japan to make sure you do not fall into a tax trap.

[RetireJapan]

It's a very interesting question. I doubt you will be able to get a mortgage without employment income.

Do let us know how you get on though!

[gouro]

Thank you so much everybody, this forum is very eye opening. We were considering of moving within the next say 5 years so I wanted to have a rough idea how it ll all work out, we ll talk to a professional for sure.

We had a look few weeks ago and saw that new(!) houses (4Room) in my wife’s city (Hamamatsu) go around 25m YEN which would be better or same as renting if one could get a low interest loan. Of course they do not appreciate in price historically so I don’t know if I just end up sinking my money there buying a house instead of investing the same amount.

As of this extra 10% health premium I had no idea it would apply to us :S Makes sense, but also makes things worse, I had the impression we just pay ~16000YEN per month per person for health insurance, from what my wife had told me, but she also didn’t know exactly.

Cost of living is very cheap in Hamamatsu comparing to Europe where we live, we have friends and family and we like it, but it increasingly looks like it’s not realistic retiring in Japan just with stock income.

[RetireJapan]

As of this extra 10% health premium I had no idea it would apply to us :S Makes sense, but also makes things worse, I had the impression we just pay ~16000YEN per month per person for health insurance, from what my wife had told me, but she also didn’t know exactly.

That sounds like the cost of the kokumin nenkin pension. Health insurance is based on income, but if you are living off investments you will have very little or no income on paper, so your health insurance will be VERY low. You can also get the pension payment waived due to low income.

[Deep Blue]

You can try the private banks who are generally a lot more flexible than the Japanese retail banks. If you google non-resident mortgage in Japan you’ll find which banks lend to people without a Japanese income. The Singaporean banks (DBS and UOB) as well as some of the Aussie banks used to offer this, as well as the Hong Kong branch of Orix and Bank of China HK.

It’s been a decade since I took out a mortgage to buy our place in Japan and the bank (NAB) looked at total income - salary, dividends, rental income etc to determine whether to make the loan. Sadly they withdrew from Tokyo a few years ago but I suspect the other banks make similar determinations.

You will pay more in interest though, I paid TIBOR + 3% so effectively 3.1% at the time.

[Tkydon]

As of this extra 10% health premium I had no idea it would apply to us :S Makes sense, but also makes things worse, I had the impression we just pay ~16000YEN per month per person for health insurance, from what my wife had told me, but she also didn’t know exactly.

That sounds like the cost of the kokumin nenkin pension. Health insurance is based on income, but if you are living off investments you will have very little or no income on paper, so your health insurance will be VERY low. You can also get the pension payment waived due to low income.

Just for everyone's reference

Hamamatsu Kokumon Kenkou Hoken - National Health Insurance

National Health Insurance
https://www.city.hamamatsu.shizuoka.jp/ ... /03_4.html

"Policies on Premium Payments
Insurance premiums are based on the amount of residence tax and other conditions.
The insurance premiums paid by everyone are an important financial resource, which is added to the national subsidy to provide NHI benefits for medical expenses or lump sum birth allowances."

https://www.city.hamamatsu.shizuoka.jp/ ... nryou.html

Put this page through Google Translator

Insurance premium calculation formula:

Insurance premiums are calculated based on the previous year's income as follows:
Annual premium (Sections 1+2+3)
(Calculated and paid on a per household basis)
Each Category then has a Per-Household Charge, a Per Insured Person Charge (The number of enrollees multiplied by one of the following amounts), and an Income related Charge (% of Household Total Taxable Income in the first calendar year income, payable from your second calendar year), with an absolute maximum limit in each Category

1. For medical care (Basic fund for the National Health Insurance) (Payable by all)
Per Household: 22,000 yen
Per Person Charge: 25,000 yen (12,500 for Children under 6)
Income related Charge: 7.2%

Maximum limit: 650,000 yen

2. For support (Financial support for the Medical Insurance System for the Elderly Aged 75 and Over)
Per Household: 8,000 yen
Per Person Charge: 11,000 yen
Income related Charge: 2.35%

Maximum limit: 220,000 yen

3. For nursing care (Nursing-care insurance premiums for people aged 40 to 64 (Payable for Family members over 40 and under 65 years of age)
Per Household: 0 yen
Per Person Charge: 14,500 yen
Income related Charge: 1.9%

Maximum limit: 170,000 yen

The Per Household and Per Person Charges are fixed and so you will pay them every year, but the Income related to your Household Income will change.

Therefore, the part of the Premium calculated based on income (The amount of taxable income after all allowances and deductions multiplied by the following rates, to the maximum household premiums shown above...)
1. 7.2％
2. 2.35％
3. 1.9％

Total: Max 11.45%... (Work on 10% of Total Household Taxable Income for budget purposes)


There are other details, and discounts if you are impoverished, and can't afford to pay...


For Self-/Unemployed, the Kokumin Kiso Nenkin is currently Y16,520 per month per adult, also with exemptions if you are impoverished, and can't afford to pay...

You might also want to participate in a Tax Advantaged Individual Defined Contribution (iDeCo) Pension Scheme (but you do need to be fully participating in Kokumin Kiso Nenkin to do so), and Nippon Individual Savings Account (NISA) for additional tax benefits. See other numerous relevant threads.

If you wife is not already doing so, she might want to pay Voluntary Contributions to the Kokumin Kiso Nenkin from Overseas to increase her benefits in retirement

https://www.nenkin.go.jp/service/scenebetsu/kaigai.html