Politics Osaka to introduce Japan's first citywide vacant home tax

This is something that might soon catch on across Japan:

Neyagawa in Osaka Prefecture has approved Japan's first citywide tax on vacant homes. From fiscal 2029, owners of qualifying properties will face an additional municipal levy equal to 35% of their existing fixed-asset tax. The Neyagawa City Assembly passed the measure unanimously on 9 July. City officials hope the extra cost will push owners to rent out or sell unused homes, easing a shortage of available housing and helping the city's population continue to grow.


Neyagawa has recorded more people moving in than leaving over the past two years, but housing supply has not kept pace. Around 6,400 vacant properties are currently neither offered for rent nor listed for sale.

One such property visited by city officials was built more than 50 years ago and has stood vacant for over two decades. "Considering its age, it is a clean property that has been maintained quite well," said Naoki Yuda, head of a division in the city's urban development department. However, the city has been unable to contact the heirs to the property. Yuda said it is difficult for local authorities to intervene on their own when owners or heirs still legally exist.

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Kyoto also plans to introduce a vacant-home tax from fiscal 2030, but it will apply only to built-up urban areas. Neyagawa will become the first municipality in Japan to levy such a tax across an entire city, with collection due to begin in fiscal 2029.

Local governments across Japan have struggled to deal with a growing number of empty homes. One reason often cited is the property tax system, which allows taxes on residential land to be reduced to as little as one-sixth of the standard rate, provided a house remains standing. As a result, some owners leave vacant buildings untouched because demolishing them could lead to a much higher tax bill on the land.

Does Japan already have a homestead and non-homestead tax? That is, in the U.S. in most states taxes are less for your primary residence. Second homes -- vacation homes, rentals, etc. -- are taxed at a higher rate.

You might have heard about this in the news as the Robin Hood mayor of New York gave the rich folks the middle finger recently and passed a special tax for them. It's so sad. All those people with million dollar homes and condominiums that don't actually live in New York will be forced to relinquish some of their hard-earned dollars to the government.

New York City's new tax on second homes will more than double property taxes owed by many wealthy luxury apartment owners, according to tax experts.

State lawmakers on Wednesday passed the tax on nonprimary residences in order to help close the city's budget gap. The so-called pied-a-terre tax will be imposed on second homes valued at $1 million or more. It's expected to raise $500 million in revenue.

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$1M dollar home in NYC probably encompasses most of them, regardless of who owns it.

Back to Japan, the tax on vacant properties is a good idea. I wonder why heirs in general aren't more actively trying to sell the houses after they inherit?

Mikawa Ossan said:

$1M dollar home in NYC probably encompasses most of them, regardless of who owns it.

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True. The majority of non-owner occupied homes in New York are corporate-owned from what I've read.

Mikawa Ossan said:

Back to Japan, the tax on vacant properties is a good idea. I wonder why heirs in general aren't more actively trying to sell the houses after they inherit?

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I understand it can be quite costly to dispose of property and not worth the effort or expense especially if the structure on it needs to be removed.

mdchachi said:

I understand it can be quite costly to dispose of property and not worth the effort or expense especially if the structure on it needs to be removed.

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Without any knowledge regarding the matter other than this, it seems that it would be more impactful to make it easier to dispose of the property than to tax it more. Taxing more just makes the decision on what to do with the property into a question of the less painful approach, but if the process is made less burdensome then a lot of people who want to dispose of the property would likely do so.