New-Build vs Resale in Tokyo: The Buyer Process, Timeline and Real Trade-offs

TL;DR: New-build (shinchiku) and resale (chuko) are not two versions of the same purchase — they are two different processes, on two different clocks, with two different tax outcomes. New-builds are often sold off-plan via application and sometimes a lottery, can take many months to keys, and carry a developer premium that fades fast. Resale is faster, negotiable, and the better tax asset for most foreign investors. Pick the process that fits your goal, not the glossy showroom — and if you do go off-plan, understand the deposit, staged payments, and financing gap before you sign.

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Most foreign buyers walk into this decision thinking it’s about taste — new and shiny versus old and cheaper. It isn’t. In Tokyo, shinchiku (“new construction,” typically unlived-in and under ~1 year old) and chuko (“used,” everything else) put you on two completely separate tracks the moment you express interest. Different sellers, different paperwork, different waiting periods, different after-tax returns.

I’ve taken buyers down both. Here’s what actually differs, so you can choose the track on purpose instead of by accident.

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The price gap is wider than you think

Start with the number, because it frames everything. In fiscal 2025 (April 2025–March 2026), the average new condominium in Tokyo’s 23 wards hit a record ¥137.84 million, up 18.5% year-on-year and the third straight year above ¥100M (directional, as of writing). That works out to roughly ¥2.14M per square meter. A comparable secondhand 70-square-meter apartment in the 23 wards trades closer to ¥55–70M.

That is not an apples-to-apples gap — new supply skews toward larger, more central, higher-spec towers, and new-build supply hit a 50-year low, which inflates the average. But even like-for-like, new construction in Japan generally runs 30–50% above a comparable resale unit. You are paying a brand-new premium, and that premium behaves in a very specific way once you own it.

What the new-build premium actually does after you buy

Here’s the part the showroom won’t volunteer. A brand-new Japanese condo typically sheds 15–20% of its value in the first five years, because a chunk of what you paid was developer margin and marketing, not bricks. Structure value can lose up to ~50% over the first decade before the curve flattens (directional, as of writing).

In prime central wards with strong land value and rental demand, that drop is cushioned — sometimes land appreciation more than offsets it. In oversupplied bay-area or outer-ward towers, the first owner eats most of the depreciation. The buyer who picks up that same unit five years later, as chuko, captures the stabilized price. If you must sell soon after completion, you can find the market values your “used” unit below what you paid, even in a flat market. Off-plan rewards holders, not flippers.

One-line caveat: “New depreciates, used appreciates” is too clean. Land is what compounds in Tokyo; a great-location new-build can still beat a mediocre-location resale. Location outranks age every time.

Two different buying processes

Resale (chuko) runs like the standard Japanese purchase you’ve read about: you find a listed unit, submit a purchase application (kaitsuke-shoumei-sho), negotiate price, receive the Important Matters statement (juyo-jiko-setsumeisho), sign the contract, and settle. You can inspect the actual apartment, see the actual view, and read the building’s repair-fund history — the shuzenhi (building repair-reserve fund) balance and the management track record — before you commit. Price is negotiable, especially on units that have sat.

New-build (shinchiku) is a sales process run by the developer, not an open negotiation. Completed units work much like resale. But many of the best new towers are sold off-plan — “aota-gai,” literally buying the green rice field before it’s grown. You buy from a floor plan and a model room. Demand for desirable units routinely exceeds supply, so the developer runs an application round and, when oversubscribed, a lottery. You don’t haggle; you register interest and hope your number comes up. Price is essentially fixed.

That difference matters for a foreign buyer: with resale you control the pace and the price. With off-plan new-build, the developer controls both, and you’re competing against cash-ready domestic buyers.

What “off-plan” actually means here

When I say off-plan, I mean you reserve and contract a unit in a new condominium, a shinchiku mansion (a brand-new multi-unit residential building), before it is finished. The Japanese term for this whole pre-completion sales model is aozora-uri or, more commonly, mishun bukken (a property sold before completion). The developer markets from a glossy moderu ruumu (a show-room mock-up of a representative unit), floor plans, and material samples. You are buying a drawing and a promise. The moderu ruumu is a best case — you pay before you can see, touch, or hear the actual unit, daytime light, train noise, neighbours.

This is genuinely common in Tokyo. A large share of new family-sized units in central wards sell out before the building tops out (directional, as of writing). Popular projects in strong locations can go to a lottery, called a chusen, when applicants outnumber units. So part of “buying” off-plan is actually qualifying to be allowed to buy.

For a foreign buyer, the headline thing to understand: there is no separate legal regime that blocks you because you are not Japanese. Foreigners, including non-residents, can buy freehold here. What changes for you is financing and logistics.

The developer sales process, step by step

The new-build purchase runs through the developer (or its appointed sales agent), not a typical resale broker. Roughly:

1. Registration and information session. You register interest, attend a briefing, and tour the moderu ruumu. No money changes hands.
2. Application / lottery (moshikomi or chusen). You apply for a specific unit. If oversubscribed, a lottery decides.
3. Important Matters Explanation (juyo jiko setsumei). Before you sign anything, a licensed agent must walk you through the juyo jiko setsumeisho (the legally mandated disclosure document). This is required by law. Insist on it in a language you actually understand; do not nod along.
4. Purchase contract (baibai keiyaku) and deposit. You sign and pay the deposit.
5. Interim / construction-stage payments, where applicable.
6. Completion, final inspection (naiken), final payment, and registration (toki) of your ownership.

One detail foreigners miss: the broker commission cap. By law the maximum brokerage fee is 3% of the price plus 60,000 yen (plus consumption tax). With a true new-build bought directly from the developer, there is often no separate brokerage fee at all, because the price already bakes in the developer’s sales cost. That is a real difference from resale.

The deposit and payment timeline

Here is where off-plan diverges sharply from buying a finished home.

At contract, you pay an earnest/deposit called tetsuke, commonly somewhere around 5% to 10% of the purchase price (directional, as of writing). The tetsuke is not just a booking fee; it is legally meaningful. Under standard contracts, if you walk away you forfeit it, and if the developer defaults they typically must return it doubled. That symmetry is worth understanding before you sign.

Because the building is unfinished, you may also face staged payments during construction, sometimes an intermediate payment (chukan-kin) at a defined construction milestone, with the large balance due at completion and handover (hikiwatashi). For buyers using a mortgage, the bank generally disburses the bulk of the loan at completion, so you bridge the deposit and any interim payments from your own cash. Budget for that gap; it surprises people.

A protection point I always flag: for pre-completion sales, Japanese law requires developers to protect buyer deposits above certain thresholds, via guarantee or deposit insurance, so your money is not simply gone if the developer fails mid-build (directional in the details, as of writing). Ask the developer exactly how your tetsuke is protected, and get it in the contract. This is not personalized legal advice; have a licensed lawyer or judicial scrivener (shiho-shoshi) confirm the specifics for your deal.

The timeline divergence

This is where the two tracks split hardest.

• Resale: From accepted offer to keys, typically 4–8 weeks for the legal process; 2.5+ months realistically including search and a mortgage. You move in (or start renting it out) almost immediately. Your money starts working fast.
• Completed new-build: Similar to resale once you’re under contract.
• Off-plan new-build: You sign and pay a deposit now, then wait until construction finishes — often 6 to 24+ months later — before settlement and handover. Your capital is committed long before you hold anything that produces rent. There is also developer and completion risk: delays, spec changes, or, rarely, a developer that fails.

For an investor running the numbers, that gap is real money. An off-plan unit delivering in 18 months is 18 months of zero rental income while your deposit sits idle and you carry currency risk on the balance. A resale unit can be cash-flowing within two months. (See our week-by-week breakdown in /articles for the resale timeline in detail.)

Financing a pre-completion purchase from abroad

This is the part that derails overseas off-plan buyers most often. Japanese megabanks are cautious about lending to non-resident foreigners without permanent residency or Japan income; many simply will not, or will ask for a large down payment (directional, as of writing). Realistic routes include a few foreign-friendly lenders in Japan, an overseas bank that lends against Japanese property, or simply paying cash.

Start financing conversations before you pick a unit. With staged payments and a completion-date balloon, a financing fall-through after you have paid tetsuke is an expensive way to learn this.

The tax angle quietly favors resale

For a non-resident landlord, this is the trade-off that moves the needle most, and it runs opposite to instinct.

Japan depreciates the building, not the land, on a fixed schedule by construction type — 47 years for reinforced concrete, 22 for wood. A brand-new RC tower gives you a thin annual write-off stretched over 47 years. A used building lets you depreciate the remaining (and often accelerated) life far faster, generating larger paper losses that shelter rental income against the 20.42% non-resident withholding default.

In plain terms: the older, cheaper structure is usually the better tax shield. The glossy new tower is the worse one. We walk through the exact mechanic — including the building-to-land split that determines the size of your deduction — in our depreciation guide on /articles.

On the way out: a non-tax-resident seller is generally subject to a non-resident withholding of 10.21% of the gross sale price in the standard case, with 20.42% appearing in other withholding contexts. Cross-border tax, including how Japan’s tax interacts with your home country and structures like an Australian SMSF, is genuinely complicated. I work in Tokyo real estate, not your tax adviser — confirm all of this with a licensed cross-border tax professional and, for visa questions, an immigration lawyer.

So which track is right for you?

A blunt cut, from someone who does this for a living:

• Buy resale if you’re an investor optimizing for yield, speed-to-cash-flow, tax efficiency, and a negotiated entry price. This is most foreign buyers.
• Buy completed new-build if you want a turnkey home, full warranty, latest seismic and insulation standards, and you’re holding long-term in a prime location where land value carries the price.
• Buy off-plan new-build only if you’ve accepted the wait, the lottery odds, the locked price, and the first-owner depreciation — usually because you want a specific unit in a specific landmark tower and plan to hold for a decade-plus.

What new-build genuinely gives you: a statutory defect-liability warranty on major structural elements and water-tightness that runs for years from handover (directional, as of writing) under Japan’s housing-quality law, first choice of floor, view, and direction, and a long runway to arrange money and move your life.

Earthquake worry is one place new-build earns its premium: post-1981 (and especially post-2000) seismic codes matter. But plenty of well-built resale RC towers already clear those bars — verify the standard, don’t assume age tells you.

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Your next step

The right answer here is unit-specific, not category-specific. The honest move is to put a real new-build and a real resale candidate side by side — same budget, same ward — and compare entry price, time-to-keys, projected after-tax yield, and depreciation schedule on each. That comparison is exactly what turns a preference into a decision.

Off-plan in Tokyo is a fine path if, and only if, the developer is solid, the location holds value, your deposit is contractually protected, and your money is lined up before you sign. If any of those is shaky, resale usually serves you better.

Run a first-pass comparison yourself with our calculators at /tools — model your deposit, staged payments, and likely financing gap — compare wards to see where the new-build premium is most, and least, likely to hold, then bring two or three real listings to a licensed agent at /contact. We’ll model both tracks against your actual goal — cash-flow now or trophy hold later — and tell you which one your money should be on. No showroom pressure, no lottery hype.

Sources: Japan Times — Tokyo condo prices record high FY2025; Housing Japan — Tokyo condominium prices surge as new supply drops; Home in Nihon — Japan new build vs used property; REthink Tokyo — How to buy off the plan; Housing Japan — Does Japanese real estate depreciate; Japan Real Estate Institute (JREI); National Tax Agency of Japan; Japan Property Central; MLIT (Ministry of Land, Infrastructure, Transport and Tourism)