Japan Real Estate Laws and Regulations in 2026: What Changed, and What Foreign Investors Need to Know

Three regulatory shifts took effect in Japan on 1 April 2026 that materially change how foreign investors transact in residential and hotel-zoned property. The FEFTA residential exemption disappeared, nationality disclosure became mandatory at the Legal Affairs Bureau, and the REIRA Act expanded its critical-area oversight. The minpaku short-term rental framework also tightened operationally even though the underlying 180-day cap is unchanged.

This is the working summary of what is actually different in 2026 versus 2025, with the relevant statutes and the practical effect on foreign buyers.

Change 1: FEFTA Now Covers All Foreign Residential Purchases

The Foreign Exchange and Foreign Trade Act (Gaitame-ho, Law No. 228 of 1949) historically required non-residents to file post-acquisition reports with the Bank of Japan for commercial real estate acquisitions and for residential acquisitions intended for investment use. Owner-occupied residential purchases were exempt under Article 55-3 of the FEFTA implementing regulations.

That exemption was removed effective 1 April 2026 by Cabinet Order No. 142 of 2025 amending the FEFTA Order on Foreign Direct Investment. The new rule is straightforward: every real estate acquisition by a non-resident must be reported to the Bank of Japan within 20 days of the closing date, regardless of intended use, regardless of price, and regardless of the buyer's visa status if they hold non-resident status under the Income Tax Act.

The filing is administrative rather than approval-based. Reports go through Form 22 (Real Estate Acquisition Report) submitted via the Bank of Japan's online filing system or in paper at any authorized commercial bank. Penalties for non-filing under Article 70 of FEFTA can reach JPY 1 million per violation, though enforcement against good-faith late filers has historically been limited to written warnings.

The practical consequence is that foreign buyers should now expect their licensed broker (under the Building Lot and Building Transactions Business Act, Law No. 176 of 1952) to integrate the FEFTA filing into the closing process. If your agent does not bring this up, that is a flag that the broker is not properly handling foreign-buyer compliance.

Change 2: Mandatory Nationality Disclosure at Registration

Effective 1 April 2026, an amendment to the Real Estate Registration Act (Law No. 123 of 2004) requires every person registering a transfer of ownership or a long-term lease to disclose their nationality at the time of registration with the Legal Affairs Bureau (Homukyoku). The amendment applies to all buyers, Japanese and foreign, so it is not formally discriminatory.

The nationality field appears in the new Form 71 ownership transfer registration documents and is recorded in the permanent property registry (touki bo). This means future title searches will show the nationality of every transferor and transferee from April 2026 onward. The Ministry of Justice has stated the data will be used for national statistical purposes and may be shared with the Cabinet Office for REIRA Act monitoring.

From a foreign-buyer perspective, this is administrative friction rather than a substantive restriction. The buyer's name was already publicly registered; nationality is a new data point but does not affect ownership rights, transferability, or tax treatment.

Change 3: REIRA Act Critical-Area Expansion

The Act on Investigation and Regulation of Use of Real Estate Surrounding Important Facilities and Border Islands (REIRA Act, Law No. 84 of 2021) entered enforcement in 2022. It designates two categories of monitored areas: "Watch Areas" (Chuushi Kuiki) within roughly 1 kilometer of military bases, nuclear plants, and critical infrastructure, and "Special Watch Areas" (Tokubetsu Chuushi Kuiki) for highest-priority facilities.

The April 2026 expansion designated an additional 200 sites as Watch Areas and 35 as Special Watch Areas under Cabinet Order amendments. The expanded list includes additional Self-Defense Force installations, coast guard stations near disputed maritime borders, and a small number of telecommunications backbone facilities.

In Special Watch Areas, any person acquiring land of 200 square meters or more must file an advance notification with the Cabinet Office at least 30 days before the transaction under Article 13 of the REIRA Act. The Cabinet Office can request additional information and, in narrow circumstances under Article 14, recommend that the transaction be suspended. In practice, recommendations against transactions have been issued in single digits annually since the law took effect.

For most foreign buyers, the REIRA Act does not affect typical purchases. It primarily becomes relevant when buying detached houses or land near specific government facilities, which is uncommon in central Tokyo, Osaka, Kyoto, and Fukuoka where most foreign-buyer activity concentrates. Buyers in Okinawa, Nagasaki, and parts of Hokkaido should ask their broker to check the property's REIRA Act status before signing.

The Minpaku Operational Tightening

The base minpaku framework under the Private Lodging Business Act (Jutaku Shukuhaku Jigyo Ho, Law No. 65 of 2017) still caps short-term rentals at 180 days per year for properties operating under the standard minpaku registration. That cap did not change in 2026.

What did change is that approximately 99% of condominium management associations (kanri kumiai) now have bylaws explicitly prohibiting or restricting short-term rentals in their buildings. Under Article 30 of the Building Unit Ownership Act, management association bylaws are legally binding on all unit owners, including subsequent purchasers. A foreign buyer acquiring a condominium with plans to operate short-term rental needs to verify the building's bylaws before closing, not after.

The exception is the tokku minpaku scheme operating in National Strategic Special Zones (Kokka Senryaku Tokku) designated under the National Strategic Special Zones Act. Specific wards in Osaka and a small number of Tokyo zones allow year-round short-term rental under a separate registration regime. Tokku minpaku properties trade at meaningful premiums in central Osaka because the regulatory certainty is durable. Verifying the specific ward designation through the Osaka City registration office (or the equivalent for other zones) is critical before pricing in short-term rental income.

Detached houses (kodate) are easier than condos because there is no management association bylaw to override the legal 180-day cap. A foreign buyer acquiring a house in a tokku minpaku zone can structure year-round short-term rental operations cleanly.

For deeper analysis of Fukuoka's regulatory environment and the local impact of the 2026 changes, see our Fukuoka briefing.

What Has Not Changed

Foreigners can still freely purchase land and buildings in Japan with no nationality restrictions, no government approval requirement, no minimum investment threshold, and no reciprocity requirement. Japan remains one of the most open developed economies for foreign real estate acquisition. The 2026 changes are reporting and disclosure expansions, not ownership restrictions.

Property tax (Koteishisanzei) rates also did not change in 2026. The 1.4% standard rate plus the 0.3% urban planning tax (Toshikei Kakuzei) where applicable continues to apply to all owners regardless of nationality. The acquisition tax (Fudosan Shutokuzei) at 4% of the assessed value (3% for residential land transactions through 31 March 2027 under the existing reduction) is unchanged.

Inheritance tax exposure is the area where foreign investors most often misunderstand the framework. A non-resident foreigner who owns Japanese property remains subject to Japanese inheritance tax on that property under Article 1-3 of the Inheritance Tax Act. This is true regardless of the owner's nationality and residence at the time of death. Estate planning for Japanese property assets matters and is not automatic from a US, UK, or Singapore will.

Bektu tracks the FEFTA compliance status and REIRA Act overlay for major Tokyo, Osaka, and Fukuoka residential projects, with developer-level verification of post-2026 compliance integration.

What This Means for 2026 Buyers

The Japanese market is not closing to foreigners. It is becoming better documented. The reporting and disclosure changes increase the friction at closing by perhaps a week of additional paperwork, but they do not change the ownership rights, the tax treatment, or the price levels foreign investors face.

The actionable items for any 2026 purchase: confirm your broker handles FEFTA filing, confirm the property's REIRA Act status if it is in a relevant geography, confirm the management association bylaws if you plan minpaku operation, and structure inheritance documentation now rather than later.