Despite all the rumors and hubbub, the Japanese government has, for the time being at least, reportedly opted not to introduce restrictions on foreigners buying real estate. Right off the bat, it’s important to be clear that concerns around foreigners owning real estate in Japan have not evaporated. The government has simply shifted priorities.
In the planned extraordinary Diet session this fall, the government intends to revise the “Act on the Review and Regulation of the Use of Real Estate Surrounding Important Facilities and on Remote Territorial Islands.” In its current state, the law allows the government to investigate land use and ownership near certain security-sensitive facilities, such as areas within roughly one kilometer of Self-Defense Force bases. Around particularly sensitive locations, the government already requires prior notification if someone intends to acquire land there.
The important thing here is that this would not be a foreigner-only rule. If strengthened, the revised system would apply regardless of nationality, meaning both foreign nationals and Japanese nationals would be subject to the same rules in the relevant areas.
By implementing the revision, the government hopes to do the following:
- Introduce a permission-based system, as opposed to only requiring notification
- Expand the areas where the government is allowed to conduct investigations
- Apply the rules to everyone, regardless of nationality, rather than creating rules only for foreign buyers
The government has been looking into the possibility of restricting foreigners specifically, but it has determined that such a targeted rule may be hard to enforce. For example, even if the rules technically targeted foreign nationals, buyers could potentially avoid them by using a Japanese representative or intermediary. Instead of being a crackdown, the law might just create a new loophole market. Not to mention, considering Japan’s heavy involvement in the global economy, a plainly nationality-based restriction could have negative implications for both diplomacy and trade.
The wording “for the time being” though is vital. Some voices within Japan’s ruling parties are still pushing for measures to address rising real estate prices. At the same time, research into the possibility of future controls on foreigners looking to purchase real estate will continue. The most important question is whether or not such a law could ever be properly enforceable, and what the legal and political basis for it would be.
For foreign buyers, this is important news because it shows that Japan is not currently moving toward a simple ban or broad restriction on foreign real estate purchases. That does not mean the topic is going away, but it does mean the immediate policy focus appears to be much narrower: national security-related land, not ordinary home or condo purchases. For anyone considering buying in Japan, the takeaway is probably not “nothing will ever change,” but rather that the current system remains open for now, while the government continues looking for a practical way to respond to political concerns around foreign ownership and rising prices.
Source: https://news.yahoo.co.jp/articles/013c275f4658392d2d229d1c346066acfeab7b70