Key Money in Japan Explained: What It Is, Why It Exists & How Much to Pay

Key money (礼金, reikin) is a non-refundable payment you make to the landlord when signing a rental lease in Japan. Unlike a security deposit, you will never see this money again — it is essentially a gift to the landlord for agreeing to rent to you. Typically 1–2 months' rent, key money can add ¥100,000–¥300,000 or more to your move-in costs in Tokyo.

This guide is the in-depth companion to our Quick Guide to Key Money in Japan. Here, we cover the full history, regional variation, cost breakdowns, negotiation tactics, and how to find apartments with zero key money.

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What Is Key Money? (Definition and Origin)

Key money — 礼金 (reikin, literally "gratitude money") — originated in post-World War II Japan, when housing was severely scarce and desperate tenants would offer extra money to landlords just for the privilege of being considered. The practice became institutionalized and, despite modern housing abundance, it persists in many parts of Japan today.

Key points about key money:

• Non-refundable — this is the biggest surprise for foreigners. Unlike a security deposit, you cannot get key money back under any circumstances
• Paid once — at lease signing only, not monthly
• Not required by law — it is a custom, not a legal obligation
• Declining but not gone — many newer apartments and property management companies have eliminated it, but it remains common in Tokyo and some other urban areas

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How Much Is Key Money? Regional Comparison

The amount varies significantly by region.

Region	Typical Key Money	Notes
Tokyo (23 wards)	1–2 months' rent	Still very common, especially in popular neighborhoods
Tokyo suburbs	0–1 month	Mixed; many newer apartments are 0
Osaka	0–1 month	"Shikikin-rei zero" (no deposit, no key money) listings are common
Nagoya	0–1 month	Less common than Tokyo
Fukuoka	0–1 month	Low key money culture
Kyoto	1–2 months	Traditional rental culture; still common
Rural Japan	0	Key money is rare outside major cities

In dollar terms (Tokyo example): For a ¥120,000/month apartment, 1 month of key money = ¥120,000 ($800 USD). 2 months = ¥240,000 ($1,600 USD).

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Key Money vs. Security Deposit: What's the Difference?

Foreigners often confuse 礼金 (reikin, key money) and 敷金 (shikikin, security deposit). They are very different.

	Key Money (礼金)	Security Deposit (敷金)
Purpose	Gift to landlord	Covers damages / unpaid rent
Refundable?	No — never	Yes — partial or full refund on move-out
Typical amount	1–2 months' rent	1–2 months' rent
Legal basis	Custom only	Regulated by Civil Code
Negotiable?	Yes, especially for vacant units	Rarely

There is also a third fee to understand: the agency fee (仲介手数料, chūkai tesūryō) — paid to the real estate agent, not the landlord. It is legally capped at 1 month's rent and is separate from both key money and the security deposit.

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Is Key Money Refundable?

No — key money is never refundable. This is the most important fact and the biggest cultural shock for foreigners coming from countries where deposits are routinely returned.

Here is what happens to each fee when you move out:

Fee	What happens at move-out
Key money (礼金)	Gone — 0% returned, regardless of condition
Security deposit (敷金)	Partially or fully returned after deducting cleaning fees and any damage repairs
Agency fee (仲介手数料)	Gone — one-time fee for the agent's service
First month's rent	Gone — normal rent payment

A common scenario: A ¥100,000/month apartment with 1 month key money + 1 month deposit + 1 month agency fee + first month's rent = ¥400,000 upfront. At move-out, you may get back ¥50,000–¥80,000 from the security deposit, but key money is gone permanently.

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Zero Key Money Apartments (礼金ゼロ物件)

An increasing number of apartments in Japan are advertised as 礼金ゼロ (reikin zero) — zero key money. This is good news for renters, but there are trade-offs.

Pros of zero key money apartments

• Significantly lower upfront costs (saves 1–2 months' rent)
• More common in newer buildings and large property management companies
• Easier to find through major portals like SUUMO and HOME'S

Cons or things to watch for

Factor	What to check
Higher security deposit	Some landlords remove key money but raise the deposit to 2–3 months
Short-term penalty clauses	Some leases charge a fee if you leave within 1–2 years
Older or less popular buildings	Zero key money is sometimes used to attract tenants to hard-to-fill units
Higher monthly rent	Occasionally the rent is slightly higher to compensate

How to find zero key money apartments

• Filter by 礼金なし (reikin nashi) or 礼金0 on SUUMO, HOME'S, or athome
• Search for フリーレント (free rent) — some apartments offer 1–2 months' free rent instead of eliminating key money
• Ask your agent directly: "礼金ゼロの物件はありますか？" (Reikin zero no bukken wa arimasu ka?)

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How to Negotiate Key Money

Key money is not fixed — it is a custom and can often be reduced or eliminated entirely, especially in slower rental markets or for long-vacant units.

When negotiation is most likely to work

• The apartment has been listed for more than 2–3 months
• You are willing to sign a longer lease (2–3 years instead of 2)
• You have a strong guarantor (保証人, hoshōnin) or use a reputable guaranty company
• You are moving in during the off-peak season (July–January; peak is February–April)
• The property manager is a large company (often more flexible than individual landlords)

How to negotiate

1. Ask your agent to request a reduction on your behalf — direct negotiation is awkward, but agents do this routinely
2. Offer a longer contract — some landlords will waive key money for a 3-year lease commitment
3. Move in quickly — offering an immediate lease start date can make landlords more flexible
4. Point out the vacancy period — if the unit has been empty, the landlord is losing money every month

Typical outcomes: key money reduced from 2 months to 1 month, or from 1 month to 0 months. Full waivers are possible for motivated landlords.

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Full Initial Cost Breakdown: What to Budget

Here is a realistic cost breakdown for renting an apartment in Japan, using a ¥100,000/month apartment in Tokyo as an example.

Cost Item	Amount	Refundable?
Key money (礼金)	¥100,000–¥200,000 (1–2 months)	No
Security deposit (敷金)	¥100,000–¥200,000 (1–2 months)	Partially
Agency fee (仲介手数料)	¥100,000–¥105,000 (1 month + tax)	No
First month's rent	¥100,000	No
Fire/earthquake insurance	¥15,000–¥25,000 (2-year policy)	No
Guarantor company fee	¥50,000–¥100,000 (if required)	No
Moving costs	¥50,000–¥150,000	No
Total initial outlay	¥515,000–¥880,000	—
Estimated refund at move-out	¥50,000–¥150,000	—

For a detailed breakdown of every initial cost, see Initial Costs When Renting in Japan.

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Summary: What Foreigners Should Expect and Tips to Minimize Upfront Costs

What to expect

• Key money is a real cost — budget 0–2 months' rent and do not expect it back
• Tokyo and Kyoto have higher key money culture than Osaka, Fukuoka, or rural areas
• Total move-in costs of 4–6 months' rent equivalent are normal in Tokyo
• Zero key money apartments exist and are increasingly common — but read the small print

Tips to minimize upfront costs

1. Filter for 礼金ゼロ properties — they are widely available in most cities
2. Negotiate — especially for long-vacant units or during off-peak months
3. Avoid peak season (February–April) when landlords have more leverage
4. Compare total costs, not just monthly rent — a cheaper rent with high key money may cost more upfront
5. Use a reputable guaranty company to make yourself an attractive tenant without needing a Japanese co-signer

The bottom line

Key money is frustrating for foreigners, but it is manageable with the right approach. In many parts of Japan outside Tokyo, you can find excellent apartments with zero key money. In Tokyo, you may need to accept 1 month of key money as a cost of renting in desirable areas — but always negotiate, and never assume it is non-negotiable.

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Related Guides

• What is Key Money in Japan? (Quick Guide)
• Initial Costs When Renting in Japan: Complete Breakdown
• How to Rent an Apartment in Japan
• Average Rent in Japan by City (2026)
• Cost of Living in Japan (2026 Guide)

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