Rising security and economic tensions prompting consideration of new rules to make it harder for foreigners to buy property in Japan.
In December, Japan’s Liberal Democratic Party announced its intent to introduce legislation to add new restrictions to the ability of foreigners to purchase real estate in Japan. In March, a government expert panel began holding meetings to discuss possible changes legal changes in order to address the economic and security concerns being voiced by proponents of increased regulation, with the aim of making a proposal by the end of the currently ongoing parliamentary session, which is scheduled to end in midsummer.
That timetable is now getting shifted back, as the panel is now saying that it is postponing any possible recommended bans on foreigners purchasing property until this coming fall.
The push for tighter restrictions reflects two growing concerns among a vocal portion of the Japanese population. The first is espionage threats from foreign countries, with China the most commonly perceived potential perpetrator. Under the current laws, foreign nationals buying real estate within close proximity to Japan Self-Defense Force bases, nuclear power plants, and other facilities deemed to be sensitive sites from a national security standpoint must disclose their nationality and declare the purchase to the Japanese government. Among the ideas being considered by the panel are installing a framework where instead of simply declaring such purchases, the buyer would have to apply for a license to complete the transaction, granting the government a form of veto power to stop the sale.
Real estate purchases by foreigners have also been attracting increased negative attention in Japan for economic reasons. While Japan’s total population is shrinking, it’s also becoming more concentrated. Instances of foreign buyers purchasing condominium buildings in high-demand areas and aggressively raising rents beyond what the current residents can bear, turning individual condo units into short-term rentals for ill-mannered tourists, or purchasing tracts of land for disruptively large redevelopment projects may still represent only a portion of real estate transactions in Japan, but when they do happen the public and policymakers definitely notice.
Unfortunately, there’s a third group of people who could get caught up in any wide-ranging ban on foreigners buying property: law-abiding foreign residents of Japan who simply want to purchase a place to live. Hopefully the panel will realize and remember that not every foreigner looking to buy real estate in Japan is a spy or speculator, and will leave a path for home ownership open to them within whatever recommendations it makes in the fall.
Source: Yomiuri Shimbun via Jin, Japan Times (1, 2)
Top image: Pakutaso
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