Japan Plans Land Regulation Reform, Postpones Restrictions on Foreign Luxury Apartment Purchases

The Japanese government plans to strengthen regulations on the acquisition of land important for national security and aims to amend the law in an extraordinary Diet session this autumn. However, it has been revealed by government and ruling party sources that the government will postpone strengthening regulations on the acquisition of real estate, such as luxury apartments, by foreigners. According to a Yomiuri Shimbun report on the 1st, authorities have been evaluating these measures as part of their foreign policy, but have determined that it is currently difficult to implement regulations targeting foreigners, and thus will not amend the rules to strictly control foreign real estate acquisition for now. Under Japan's Important Land Survey and Regulation Act, the government has the authority to investigate areas within approximately 1 kilometer of defense and important facilities, such as Self-Defense Force bases, and there is an obligation to report the acquisition of land around particularly important facilities such as command centers. The government plans to amend this law to upgrade the reporting system to a 'permit system' and expand the scope of government investigation. Regarding restrictions on foreign transactions, the government believes that it would be difficult to enforce the regulations if they are circumvented through Japanese agents, so the current policy is to apply the rules regardless of nationality. Furthermore, the government believes it is difficult to prevent 'loopholes' regarding restrictions on foreign purchases of luxury apartments. Tightening measures in this area would also pose obstacles to Japan's long-standing principle of 'national treatment' (similar to a non-discrimination principle) in service trade. However, due to strong voices within the ruling party demanding measures to prevent soaring real estate prices, the government plans to grasp the actual situation of foreign acquisition of luxury apartments before considering effective policies.