By John Q. Hosedrinker 
In a move to enhance national and economic security, Japan will mandate that new property owners disclose their nationality in the real estate registry starting in fiscal year 2026. This initiative, announced by Justice Minister Hiroshi Hiraguchi, allows the government to monitor foreign property ownership. While not a prerequisite for purchasing property, the disclosure aims to provide transparency and aid in resolving potential ownership disputes. The government is also considering additional restrictions on foreign real estate purchases, though specifics remain undisclosed.
Read the original article here
Japan aims to require nationality declaration to register property from fiscal 2026. This move, as I understand it, is not about stopping foreigners from buying property, but rather, about creating a clearer picture of who owns what. The idea is to have a system in place to track property ownership by nationality. It is a registration process.
One key thing to keep in mind is that this is not a ban. It is simply a requirement to disclose your nationality when registering a property. This information will allow the government to monitor what properties are owned by foreign nationals. This could be helpful down the line for various reasons. For example, it could assist in resolving any future disputes regarding ownership. This is similar to how many countries already require various forms of identification when registering property.
There seems to be some debate around whether this is a good idea. Some feel that limiting foreign real estate purchases is a positive step. They argue that it could prevent foreign investors from driving up prices and squeezing out local buyers. However, this isn’t exactly what Japan is doing, as it’s not a restriction on who can buy, but rather on what information must be disclosed at the time of purchase.
The fact is, Japan already has a surplus of housing, especially in rural areas. The real estate market in Japan is very different from other developed countries. In many major cities around the world, there’s a lack of housing and the prices are going up. But in Japan, especially in areas outside of major city centers, the situation is different: there are many empty houses. It’s often more cost-effective to build new properties than to repair older ones.
So, the concerns about foreigners buying up all the properties and pricing out locals don’t seem to be the primary driver behind this move. The government is not trying to curb foreign investment. They are creating a registry, which the public doesn’t get access to.
Some might argue that such a registry could be a first step towards future regulations. But for now, it is primarily about collecting data. If the government ever wanted to tie residency to property investment, for example, having this information would be a necessary first step. However, it seems that there is already an existing labor law reform from 8 years ago, aiming to improve work-life balance. Also, mortgage rates and government subsidies and free healthcare and education for families, can make buying a home easier.
It’s also worth noting that in Japan, zoning and construction practices are quite different from in other countries. In many cases, homes are built to be replaced, not to last for centuries. This impacts the property market in various ways. The system does have its own specific conditions.
Overall, this isn’t a radical shift. It’s more of a data-gathering exercise. It’s about being able to see what’s happening in the market, in terms of foreign ownership. It will be interesting to see how this evolves and what the government does with this information in the future.