Historical Record of Evolution for Foreign Property Ownership Regulations in Japan

Several countries around the world have opened their property markets to foreign nationals, allowing them to purchase real estate within their borders. In some cases, ownership rights can extend to freehold status, which is broadly comparable to Indonesia's Sertifikat Hak Milik (SHM).

One such country is Japan. The legal framework governing foreign property ownership dates back to the Alien Land Law, introduced in 1925. This legislation established a framework under which foreign nationals and foreign legal entities could own property in Japan. However, it also incorporated a reciprocity clause, under which foreign land ownership could be restricted if the owner's home country imposed similar restrictions on Japanese nationals seeking to own land.

During this period, international conflicts escalated, eventually leading to the Second World War. These developments prompted changes in regulations, including restrictions on foreign land purchases to safeguard national defense interests.

In the post-war era, from 1945 through the 1980s, foreign property ownership became increasingly accessible, with opportunities extending to freehold ownership and inheritance rights. Nevertheless, administrative reporting requirements for property transactions remained in place. Towards the end of this period, foreign investors began entering the market in greater numbers, accompanied by fluctuations in property asset prices.

In the late 1980s, Japan's economic bubble drove land prices upward, attracting growing interest from foreign investors, particularly those from the United States and Europe, in the commercial property sector. However, following the collapse of the economic bubble, property values declined and investment activity weakened before acquisition opportunities began to re-emerge towards the end of the following decade.

From the 2000s through the 2020s, foreign investment in Japan's property market gained momentum again, including capital from Singapore, Hong Kong, and China. At the same time, land acquisitions near military bases, defense facilities, and other strategically important locations heightened government concerns over national security. As a result, oversight of land use in designated areas became more stringent, particularly in relation to foreign ownership.

In 2021, Japan enacted the Important Land Use Regulation Law, which came into effect in 2022. Under this legislation, the government designated monitoring zones around facilities critical to national security, as well as certain remote islands. Within these zones, authorities can monitor land ownership and use to identify activities that could potentially interfere with the functions of these facilities.

In 2026, Japan further strengthened its property ownership reporting framework. From April 2026, certain property transactions involving foreign nationals became subject to reporting requirements under the Foreign Exchange and Foreign Trade Act (FEFTA). Subsequently, from October 2026, new owners of land or buildings are required to declare their nationality when registering ownership. The government has also proposed prior approval requirements for land transfers in certain designated zones.

Nevertheless, these regulatory developments are not intended simply to prohibit foreign nationals from purchasing property. Rather, they reflect Japan's efforts to improve ownership transparency and strengthen oversight of property transactions and land use.

One property in Japan that is available for purchase by foreign nationals, including Indonesians, is The Peak Shinsaibashi Tsuki, located in the Nagahoribashi area, approximately a 10-minute walk from Shinsaibashi-suji shopping street. The property can serve as a second home or holiday home, or potentially be rented out to generate returns, subject to applicable regulations.

In terms of accessibility, the development is conveniently located near several public transportation networks, including Osaka Metro, Kintetsu Railway, and JR West. Several stations, including Nagahoribashi, Nippombashi, Kintetsu-Nippombashi, and Namba, are within approximately 2–10 minutes' walking distance.

Developed by FMI Japan, which has a portfolio of more than 30 projects across Osaka and Tokyo, The Peak Shinsaibashi Tsuki comprises 92 units within a 14-storey building. The development offers 1-bedroom units ranging from 33.3–34.2 sqm, priced at approximately JPY 66.5–69.5 million (Rp7.7–8.0 billion), and 2-bedroom units measuring 50.07 sqm, priced at approximately JPY 133 million (Rp15.39 billion). Availability for 2BR unit types is limited. The project is scheduled for completion in March 2028.

For further information or to enquire about purchasing a unit, please contact Knight Frank Indonesia via this link: https://www.knightfrank.co.id/contact-us. 

Author: Jovan Rafkhansa

Source: 

https://www.japanhouseprices.com/

https://www.city.osaka.lg.jp/

https://treeglobalpartners.com/

https://japan-real-estate.com/

https://murblz.com/

https://homeinnihon.com/