【Crucial Legal Amendments for Overseas Investors】

Starting from April 2024, amendments to the Real Estate Registration Law will come into effect in Japan. Anticipated changes in laws related to family registries and real estate registration include a significant point that overseas investors should be aware of when acquiring real estate in Japan.

This amendment applies to both those who already own property in Japan and those considering future purchases. Let’s delve into the details.

Main Reasons for the Legal Amendments: The primary focus of these changes is the mandatory registration of inheritance. This is in response to the increasing issue of “owner-unknown land” in Japan, which constitutes over 20% of the country’s land, hindering real estate transactions. The amendments aim to rectify this situation by enhancing the accuracy of registered information about property owners.

A key point is the registration of contact information for property owners without a domestic address in Japan.

Mandatory Registration of Domestic Contact Information: For individuals acquiring real estate in Japan without a domestic address, registration of the name and address of a designated contact person within Japan becomes necessary.

Due to the impact of the weakened yen, there has been a rise in real estate purchases by overseas investors, leading to difficulties in confirming and establishing communication with owners. This amendment addresses these challenges.

While it is possible to designate a third party (either an individual or a corporation) as the contact person, consent from that third party is required. Additionally, the designated third party must have a domestic address in Japan.

This raises practical questions about how many individuals would be willing to consent to being registered as contact persons, especially considering the potential psychological barrier, particularly when their address is involved.

Real estate professionals, including real estate agents and judicial scriveners, are also eligible as contact persons, making this option more practical.

It’s worth noting that for the time being, registrations indicating “no contact person” will be allowed. However, the duration of this interim provision is uncertain. Therefore, taking precautionary measures sooner rather than later is advisable.

Optimal Choice for an Emergency Contact: Real Estate Management Companies: Foreign investors typically purchase real estate in Japan for one of three purposes: as a residence, for investment, or as a vacation home.

If the property is bought for residence, and the individual registers their residence in that address, they are not subject to this legal amendment. However, for properties acquired for investment or as a vacation home, domestic contact information registration is required if the owner resides outside Japan.

As mentioned earlier, a third party (either an individual or a corporation) can serve as the domestic contact. The most straightforward option is a real estate management company.

For investment properties, real estate management companies are often entrusted with tasks such as rent collection, addressing tenant issues, and maintenance. The same applies to vacation homes, where these companies may manage vacant periods. Given the frequent communication between property owners and management companies, this aligns well with the objective of the legal amendments.

wagaya Japan boasts a track record of managing over 17,000 properties in Japan. We offer a unique service supporting foreign investors and property owners in purchasing, selling, and managing real estate in Japan in multiple languages.

If you have any questions or specific requests regarding contact registrations or property management, feel free to reach out to us.