You may have seen some viral headlines over the years about “free” or cheap abandoned properties available in Japan.
Everyone from CNBC to CNN has talked about it. While Japan’s government is trying to entice new residents with cheap or even free property, it’s not as simple as walking up to an abandoned home and claiming it for yourself.
Realistically speaking, these homes aren’t 100% free. They require renovation, investment and come with strict terms and conditions to make the home livable—the kinds of T&Cs that should make any potential buyer reconsider before affixing their seal or signature.
What are akiya?
In Japanese, 空き家 (akiya) are houses that are abandoned or unoccupied. Thanks partly to Japan’s aging population and preference for new homes over old ones, there are now simply too many disused homes in the country.
There are 62.4 million homes in Japan. In 2018, Japan’s Housing and Land Survey, which conducts a survey every five years, found a record-high 8.49 million homes to be unoccupied. Even in Tokyo, one in every ten homes is abandoned.
Most akiya are located far away from major cities where a good portion of jobs are found.
And it’s only going to get worse. According to the Nomura Research Institute, it’s estimated that one-third of all homes in Japan will be vacant or abandoned by 2030.
It’s thought that 900 small towns will no longer exist by 2040, so the government hopes that the akiya (or the Special Measures Act on Promotion of Measures on Vacant Houses—more on that later) will revive these threatened areas.
Why are there so many abandoned houses?
There are numerous and complicated reasons why Japanese homes became vacant. The most obvious is the declining birthrate and an aging population, but another reason is location.
Most akiya are located far away from major cities where a good portion of jobs are found. Millions of vacant homes are spread throughout Japan, but the rural prefectures of Kagoshima, Kochi, Tokushima and Wakayama have the most.
Buyers must be willing to live in the house despite the town’s low population and little financial potential since the point of this program is to repopulate dying towns.
Even if the abandoned house was in good shape, younger families often don’t want to relocate to a town that may not exist shortly after moving in or have no sustainable development. You might have to drive hours to your job in the nearest city, work from home or start your own business in your new little neighborhood.
Taxes and ownership
Money is also a factor in why these houses are abandoned. The younger generation often leaves them because they don’t want to pay the high property tax. Therefore, the main driver of the akiya problem is that the actual owner does not want to admit ownership because of the tax liability.
Thus, another big reason people don’t buy akiya is that it is complicated to check the title (ownership) of akiya. If you cannot find the property owner, that presents a genuine difficulty in changing ownership to your name.
After a while, the value decreases due to risks including fire hazards, termites, hygiene problems and property decline. These factors overall lower the property’s value and deter new buyers from investing in the house.
Can a foreigner buy akiya?
First of all, don’t consider an akiya your fast track to living in Japan. Buying a property in Japan, abandoned or otherwise, does not grant you automatic residence status. And while a foreigner can buy one of these homes, there are restrictions to keep in mind.
For example, some contracts to purchase an akiya require the buyer to live in the house permanently. You must make sure this clause is not in your contract because it could go against restrictions on your current visa.
The cost of renovating and repairing the house could equate to the cost of buying a new home.
Next, many of these available homes can’t be purchased at first but are instead rented out. So, for example, an akiya might be listed at just ¥35,000 per month, but tenants must live in the house faithfully. Eventually, the land and home title will be transferred to the renters, but it might not be for 20 years or more.
In Tokyo, there are sometimes specific requirements to rent akiya that favor younger families. For example, rent will be reduced by ¥5,000 per child. Other restrictions include that the renter must:
- Be under 43 years old
- Be a younger, married couple (only sometimes)
- Have children under middle/junior high school age
Buying an akiya on farmland
If the property comes with farmland, you better want to be a farmer, because a typical stipulation is you have to be a farmer. Potential buyers need approval from the local nogyo-iinkai (agricultural committee) since the buyer will have to engage in full-time farming (not as a hobby).
Yamamoto Property Advisory, who helps foreigners buy homes, says you can temporarily register to preserve your title rights and this can postpone farming on your land. When that expires, you’ll be expected to eventually utilize the farmland.
As an alternative, owners can rent out the land for other farmers to use instead. If you don’t like any of these options, perhaps it’s best to find a different akiya without farmland.
Renovations and hidden fees
Be prepared to pay other fees that could include administrative and management costs, registration and license tax, agent commission and other taxes such as acquisition and property tax. Of course, it varies based on the property, but as an example, these fees could cost more than ¥400,000.
Most akiya are in very poor condition to the point where renovating and repairing the house could equate to the cost of buying a new home. Sometimes the government can assist by providing up to ¥200,000 if renovating the house benefits the community, but eligibility requirements depend on the prefecture. Otherwise, fixing up the house could cost thousands of more dollars.
Check out listings on akiya banks
Abandoned houses are listed on “akiya bank” websites, which list properties for sale at a low rate. However, please note that there are still conditions that must be met that require effort and money put into the house before it is even livable.
The listings are in Japanese. Most property details aren’t available online. You’d have to see the akiya in person to see the actual condition of the property:
There are also websites and blogs promoting rural life and akiya homes in all prefectures:
What do you think? Is owning an akiya worth it? Have you bought one yourself? What was the experience like? Let us know in the comments!