Recent survey on foreign ownership of forestry in Japan

A survey by the Yomiuri Shimbun has found that foreigners hold as much as 1103 hectares (11.03 million sqm) of forestry in Japan. This number, however, is thought to represent just the tip of the iceberg as there are many cases of foreigners buying land and registering it in the name of a Japanese citizen or local company.

The survey was conducted between the end of March and the middle of April. The local governments across Japan’s 47 administrative regions were asked to provide information on the number of transactions, purchase price and total area. Under the National Land Utilization Law, any transactions of land over 1 hectare must be reported to the local government. The aim of this survey was to find out all other non-reported transactions.

In Hokkaido, a total of 1039 hectares, equivalent to the size of 51 Tokyo Disneylands, is held by foreigners or foreign corporations. This amounts to 94% total held nationwide. Approximately 70% of this land in Hokkaido is owned by Australian and other Asian nationals or companies. Several properties were owned by companies registered in the British Virgin Islands.

With growing concern over the true intention for the purchase of forest land by foreigners, Hokkaido and Saitama have introduced regulations that require buyers to provide advance notice to local government when purchasing land in a designated water-source area. Yamagata, Gunma, Fukui and Nagano are also considering introducing similar legislation.

However, there are many cases where the buyer has concealed their identity by using a Japanese name to register the title. A 40 year old Chinese man in Sapporo City purchased 14 hectares of forest near Niseko last Autumn, but registered the land in the name of a local Japanese real estate agent.

The buyer said he was afraid of locals protesting if they found out he had purchased the land. He believes the land values in Japan are currently at the bottom, so and he plans to eventually resell the land at a higher price. The real estate agency who sold him the land is based in the Kanto area. The agent said that although the buyer was not looking for natural water sources, they felt it would be best to register it in a Japanese name.

Between 2005 and 2010, foreigners had purchased 40 blocks of forest land with a total area of 620 hectares. This does not include transactions under 1 hectare (10,000 sqm).

Source: The Yomiuri Shimbun, April 26, 2012.

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