If you are a foreigner in a relationship with a Japanese citizen, buying a home in Japan as a couple often involves figuring out how to maximize your borrowing power. If you’re planning to finance a property together, you’ll likely come across two options: Pair Loans and Joint Mortgages (Shuunyuu Gassan / Income Combination).
While both allow you to use the combined income of two people, the structure, legal responsibility, and tax benefits differ. This article breaks down the key differences in a simple, beginner-friendly way — perfect for foreigners planning to buy property in Japan.
The conclusion of this article is that you must get married to your partner (with Japanese citizenship) regardless of if you have a working visa or a PR (permanent residency) to obtain a joint loan from banks in Japan by the time you and your partner would sign loan agreements. And to be specific, “getting married” means “getting your marriage registration in Japan”.
What is a Pair Loan?
A Pair Loan means each borrower signs a separate mortgage contract with the same bank. In most cases, this is used by married couples who both have income.
Pros:
- Each person can claim the mortgage tax deduction (home loan tax benefit)
- Higher total borrowing limit since both incomes are considered separately
Cons:
- Two contracts = more paperwork and fees (e.g., stamp duty, guarantee fees)
- If one person loses income, the other is not legally responsible, but practically may need to help cover it
What is Joint Mortgage / Income Combination (収入合算: Shuunyuu Gassan)?
This approach uses one mortgage contract under the main borrower, with the partner as a co-borrower (joint debtor). It’s sometimes called a “joint mortgage” or “income combination.”
Note: There are two types — Joint Guarantor (連帯保証人) and Joint Debtor (連帯債務者).
This article focuses on the Joint Debtor type, which offers greater borrowing power.
Pros:
- You can combine both incomes to increase the loan amount
- Only one mortgage contract (less cost and simpler paperwork)
- Both partners may be eligible for tax deduction (depends on conditions)
Cons:
- You both are 100% liable for the full mortgage
- Some banks only count a portion of the co-borrower’s income toward the loan evaluation
Comparison Table
| Pair Loan | Joint Mortgage (Shuunyuu Gassan) | |
|---|---|---|
| Loan Contracts | Two (each person signs) | One (main borrower + co-borrower) |
| Borrowing Amount | Often higher (Combined incomes) | Not as much as Pair loan (depends on bank) |
| Home Loan Tax Deduction | Both can claim | Both may claim (if eligible) |
| Paperwork & Fees | More (double fees) | Less |
| Responsibility | Each for their own loan | Both responsible for 100% of the loan |
| Ownership | Based on individual loan amounts | Based on agreed contribution ratio |
How Does Property Ownership Work?
When buying property in Japan, you must register who owns how much of the property (shareholding ratio) at the Legal Affairs Bureau.
In a Pair Loan:
Ownership share is based on each person’s loan amount.
Example: Husband borrows ¥30M, Wife borrows ¥20M → Ownership = 60% / 40%
In a Joint Mortgage:
You decide the ownership ratio based on how much each person will actually pay unless both you and your partner agree to deal with a “gift tax” situation.
Example: If one pays 70% of the mortgage and the other 30%, that should be the ownership share.
Be careful: If the registered ownership doesn’t match who is paying, the excess share might be treated as a “gift,” and Japanese gift tax could apply.
Which One Is Right for You?
| Your Priority | Recommended Option |
|---|---|
| Maximize tax benefits | Pair Loan |
| Lower costs, simpler setup | Joint Mortgage |
| Maximize loan amount | Both can be suitable depending on bank policy, but most likely Pair Loan |
Available Banks
| Bank Name | Available Loan |
|---|---|
| SMBC PRESTIA | Pair Loan, Joint Mortgage |
| SBI SHINSEI BANK | Pair Loan, Joint Mortgage |
| SURUGA bank | Pair Loan, Joint Mortgage |
Dovetail’s Thoughts
- Discuss the ownership share carefully with your partner.
- Confirm whether your bank allows non-Japanese residents to apply for either option.
- Ask about tax deduction eligibility as rules can vary between banks.
- Start discussing about marriage since banks require you to provide your marriage certificate in Japan
Buying property in Japan is straightforward, but figuring out and getting suitable financing option are complex. With the right structure, it’s possible to make the most of your finances as a couple. If you would like to find out more for your situation, please contact us here!