Government approves new law to deal with abandoned land issue

On June 6 Japan’s House of Councilors approved a new act concerning the use of abandoned land. The new law will go into effect from June 2019.

This law will grant local municipalities, private corporations and non-profits the right to use idle land for up to 10 years. This applies to land where the owners are unknown or cannot be contacted. If the owners make themselves known and object to the use of their land, the land will be returned to them at the end of the 10 year term. If the owners do not object, the term may be renewed.

Those wishing to use idle land can apply to the prefectural governor for permission. The land may then be used for parks, temporary roads, car parking, cultural facilities and other public purposes, but not for commercial or residential use. However, with abandoned land across the country equal to the size of the Netherlands, and often in remote locations, finding public uses for the land may be a challenge. One of the requirements is that the land has no existing buildings or structures on it.

The law has also simplified the process for forced land expropriation by the national and local governments for the purpose of public works.

By 2020, revisions are planned for the National Land Survey Act and Basic Act for Land. These revisions are planned to help keep closer track of property ownership, obligate heirs to record title changes, along with measures to allow the abandonment of land ownership rights. Japan’s Liberal Democratic Party has voiced opposition to to allowing the abandonment of freehold rights as it may result in a reduction in property tax revenue and put an additional burden on the government to manage and maintain any unwanted property that would now fall under their ownership.

Last year the Ministry of Land, Infrastructure, Transport and Tourism (MLIT) reported that 41,000 square kilometers or as much as 20% of the privately-owned land in Japan has missing or unidentifiable owners. A quarter of that land is forest, which has little to no market value. If nothing is done to remedy this issue, the total area could increase to as much as 78,000 square kilometers by 2040.

In urban areas, the Ministry of Justice estimates that 6.6% of land has unknown owners, while the number is 26.6% in regional and rural areas.

In Japan there is currently no obligation to update property records to show the change in ownership when real estate has been inherited by heirs. As a result, it is not unusual to find property records that have not been updated since the late 1800s. Tracking down the legal heirs can be an incredibly time-consuming process for local governments, with some cases resulting in over a hundred heirs that must all sign-off on the land sale. If one disagrees or cannot be contacted, the land cannot be sold.

The paperwork and fees involved in recording a change of ownership often means that the heirs simply do not bother, especially when the land is in a remote location with no market value and no potential buyers. Selling the land may prove close to impossible, so there is little benefit for the heirs to update the property records. Registering the inheritance of the property would incur real estate registration tax as well as annual property taxes, which is another burden for land with a tax value but no market value.

Sources:
The Nikkei Shimbun, June 6, 2018.
Jiji Press, June 6, 2018.
R.E.Port, June 6, 2018.