As of the time of writing this column, the House of Councillors election in the summer of 2025 is fast approaching. One of the key topics in the upcoming election is the potential tightening of regulations on real estate purchases by foreign nationals.
Currently, there are no particularly strict restrictions on foreigners acquiring real estate in Japan. However, it is important to note that non-residents are already required by law to submit a report to the Minister of Finance when acquiring real estate in Japan.
This article explains, from the perspective of a judicial scrivener, the legal reporting obligation involved when foreigners acquire property in Japan.
Reporting Obligation under the Foreign Exchange and Foreign Trade Act
Under the Foreign Exchange and Foreign Trade Act (commonly known as the “FEFTA”), certain transactions involving foreign exchange and overseas trade are subject to prior notification or post-acquisition reporting requirements.
According to this law, non-residents (i.e., individuals who do not have an address or residence in Japan, or corporations that do not have a principal office in Japan) who acquire real estate or related rights (such as leasehold interests) located in Japan are required to submit a “Report on the Acquisition of Real Estate in Japan” within 20 days of the acquisition. This report must be submitted via the Bank of Japan to the Minister of Finance.
(Legal basis: Article 55-3, Paragraph 1, Item 12 of the FEFTA; Article 18-5 of the Enforcement Order; Article 12 of the Ministerial Ordinance on Reporting of Foreign Exchange Transactions)
Failure to file this report, or submitting false information, may result in a penalty of imprisonment for up to six months or a fine of up to 500,000 yen (Article 71, Paragraph 3 of the FEFTA).
Cases Where Reporting Is Not Required
The reporting obligation generally applies to real estate acquired for investment purposes. However, no report is required in the following cases:
- When the property is acquired for residential use by the non-resident themselves or by their family members, domestic staff, or employees.
Note: Vacation homes and second houses do not qualify as residential use, and reporting is required in such cases. - When the property is acquired by a non-resident engaged in non-profit activities in Japan, and used for carrying out those activities.
- When the property is acquired for use as the non-resident’s office in Japan.
- When the property is acquired from another non-resident.
Advice from a Judicial Scrivener
The required report can be prepared and submitted by a resident agent in Japan, and can also be submitted online.
If you are a non-resident planning to acquire real estate in Japan for investment purposes, please feel free to contact our office. We would be happy to assist you with determining whether reporting is necessary and to support you throughout the legal procedures.
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