Japan’s Territory Disappearing? Alarming Loopholes You Can Exploit Without Any Contact—Beyond Government Control
A loophole that nationality reporting can’t prevent
Purchases of Japanese real estate by foreign capital are accelerating. At the same time, there are concerns about cases in which land bought by foreigners in Japan is resold overseas, eventually becoming ownerless land.
In December 2025, the government announced a series of policies to strengthen regulations on real estate acquisitions, including land and buildings.
The Ministry of Finance revised its ordinances under the Foreign Exchange and Foreign Trade Act (FEFTA), imposing reporting obligations when foreigners acquire Japanese real estate for residential purposes. Previously, reporting was required only for investment purposes.
The Ministry of Justice requires individuals to provide nationality information when registering real estate such as land or buildings, submitting official documents like passports or resident certificates that indicate nationality. The Cabinet Office, Ministry of Land, Infrastructure, Transport and Tourism, and Ministry of Agriculture, Forestry and Fisheries clarified that foreign corporations must report the nationality of their representatives when purchasing important land near defense-related facilities or border islands, as well as large tracts of land or forests.
The government plans to hold study groups and expert meetings on strengthening regulations on foreign land acquisitions in February and aims to compile the framework of a bill by the first half of this year.
Abroad, a number of countries restrict or ban foreign real estate transactions or purchases due to national security threats or rising housing prices. Japan, from April 2025, has basically prohibited foreigners with short-term residency status from acquiring farmland, but there is currently no law that directly restricts real estate acquisitions by foreigners.
How effective will the Takaichi administration’s proposed tightening be in addressing ownerless land involving foreigners? Are Japan’s current regulations on foreign land acquisition sufficient? Professor Kiyohito Adachi of Hokusei Gakuen University, an expert in land law, was asked.
Professor Adachi began investigating the issue of ownerless land more than ten years ago, concerned that foreign acquisitions of real estate might contribute to the problem in the future.
“The government is trying to improve infrastructure to accurately understand the reality of real estate ownership by foreigners. Looking at the ordinance revisions announced by the various ministries, there seems to be a trend toward stricter regulation.”
However, would simply requiring foreigners—individuals or corporations—to report their nationality when acquiring property solve the ownerless land problem? There are concerns that if foreigners resell Japanese land overseas to other foreigners, it would be difficult to track or verify ownership.
“There are certainly cases where repeated transfers between foreigners result in the owner becoming unknown.
With the revision of the Real Estate Registration Act in April 2024, inheritance registration became mandatory for citizens, but ownership transfer registration in land sales is not compulsory.
In Japan’s real estate transaction system, registration is not a requirement for the validity of a sale; as long as the seller and buyer agree, the contract is legally valid. If ownership registration were made mandatory for transfers and sales, it would require a fundamental discussion of Japan’s real estate transaction law—this is not something achievable in 10 or 20 years.
However, the amended Real Estate Registration Act now requires domestic contact information when the owner is a foreign-resident individual or corporation. Currently, if there is no domestic contact, a sworn statement can be submitted indicating no contact information, but in the future, this could be made mandatory. I think this could help prevent the occurrence of ownerless land.”
Why Japan Can’t Ban Foreign Land Purchases Like China
Professor Kiyohito Adachi, who studies foreign land transactions from a legal perspective, is actually opposed to blanket restrictions on land acquisition by foreigners.
“In today’s globalized economy, overly restricting foreign land acquisition would harm Japan’s economy. Japanese citizens’ overseas real estate acquisitions could also be restricted, affecting economic activity. That’s why I don’t support a total ban.”
For example, China basically prohibits foreigners from purchasing and owning land. Yet Chinese capital is buying land in Japan.
“That doesn’t mean Japan can set restrictions against specific countries. Due to economic considerations, international rules, and other factors, it’s difficult to limit foreign real estate acquisitions in Japan.
However, I also believe there are problems in Japan’s real estate law itself.”
In Japan, land and buildings are treated as separate real estate, and numerous laws are complexly structured. Furthermore, different ministries oversee land/building registration, transactions, and use and planning. Professor Adachi points out that this vertical division is one of the problems of Japan’s real estate law.
“The Ministry of Justice is in charge of some laws, the Ministry of Land, Infrastructure, Transport and Tourism of others, and these laws aren’t well coordinated. For real estate law, the government and researchers should organically link laws across ministries.
On the other hand, I evaluate the 2020 revision of the Basic Land Act positively. It defines landowners’ responsibilities for proper use, management, and transactions of land and emphasizes considering regional characteristics. I think it’s possible to create a legal system that realizes this principle even within Japan’s current land law framework.”
The Nisekō situation relying on local governments?
While Professor Adachi opposes a complete restriction on foreign land acquisitions, he believes partial regulations should be implemented.
“For example, in Kutchan Town, Hokkaido, foreign investment and development have caused land prices to surge. The increase in foreign workers has pushed up rental property rates, making it harder for locals to secure housing. Foreign real estate investment is harming the well-being of local residents.
In Japan, under the principle of freedom in construction, buildings can be erected as long as they meet the Building Standards Act and City Planning Act. But land and buildings are the foundation of life, economy, and even survival and environment. Local governments should consider residents’ well-being and impose some regulations on their use.”
What kinds of regulations could local governments independently implement?
“Prefectures and municipalities can formulate urban plans under the City Planning Act. By designating urban planning areas or quasi-urban planning areas, various restrictions on land use and construction can be imposed.
However, some municipalities haven’t created urban plans. For example, Kutchan Town has urban planning areas and quasi-urban planning areas, and adjacent Niseko Town has quasi-urban planning areas, but surrounding municipalities have no designation. This could allow construction and development to proceed freely.
It might be worth considering creating broader urban plans covering entire regions.”
Last June, a Chinese company illegally cut about 3.9 hectares of forest in Hokkaido without permission, planning to build two houses. Construction was halted following a government order.
“Additionally, small-scale developments are occurring in Kutchan and Niseko, including abandoned plots where hotels were planned but never built. To prevent these mini-developments, stricter regulation under the City Planning Act is needed.
Introducing development taxes, villa taxes, or vacant house taxes could also help. Collecting demolition costs in advance as local taxes might also be effective.
For sustainable local communities, local governments must actively engage in policy creation.”
However, some argue that municipalities lack manpower.
“That may be true for small towns. But if the national government imposes blanket restrictions, municipalities can’t implement regulations suited to local circumstances. Specific land use regulations should be devised by each municipality.
For example, Kutchan and Niseko have landscape ordinances requiring developers to attend pre-development briefings for residents. Through these briefings, developers, administrations, and residents work together on community planning. This empowers both local governments and residents. Creating such mechanisms via town development and landscape ordinances is important.”
Foreign land acquisition and the resulting problems of ownerless land and mismanaged buildings cannot be solved by the government alone.
“Local governments and residents must gain strength and think about how to shape their communities and nation. Otherwise, Japan as a country cannot survive.
The national government should give more authority to municipalities. We citizens also need the insight to sift through overwhelming information and develop sound judgment.”
Kiyohito Adachi – Professor, Department of Economic Law, Faculty of Economics, Hokusei Gakuen University. Graduated Meiji Gakuin University, Faculty of Law, 1993; Waseda University Graduate School, Law, 2003. Specializes in civil law.
Interview and text by： Sayuri Saito PHOTO： Afro