Japan Tightens Property Market Oversight

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Japan is preparing to introduce new rules requiring individuals to disclose their nationality when acquiring real estate, a move aimed at improving transparency as housing prices continue to rise. The justice minister announced that buyers will be required to present a passport or other proof of nationality when registering ownership, amid growing concern that foreign speculation is pushing homes beyond the reach of Japanese citizens.

How the new system will operate

Under the proposed regulations, all buyers — including Japanese nationals — will need to submit nationality documentation during the registration process. The information will be stored as internal administrative data and will not be made publicly available. Oversight of the database will fall to Japan’s Digital Agency. The government aims to launch the system in fiscal 2026, following a period of public consultation.

Rising prices and overseas demand

The policy shift comes as foreign demand plays a growing role in Tokyo’s housing market. According to the land ministry, 7.5% of new apartments sold in the six central wards of Tokyo during the first half of the year were purchased by buyers living overseas, up sharply from the previous year. At the same time, prices for new apartments in the Tokyo region rose 7.1% year-on-year in October, marking six consecutive months of increases.

Political backdrop and public concern

Prime Minister Sanae Takaichi has previously highlighted the lack of comprehensive data on foreign ownership as a source of public anxiety. Broader concerns about immigration and housing affordability were among the factors behind the ruling Liberal Democratic Party’s loss of its upper house majority in July and the subsequent leadership change.

Finance ministry expands reporting rules

In a parallel move, Japan’s Ministry of Finance will tighten reporting requirements for real estate purchases by foreign nationals residing overseas. While current rules require notification only for investment-related acquisitions, the revised framework will mandate reporting of all transactions, including residential purchases, within 20 days. The ministry plans to implement the changes from April 1 next year, following public consultation.

Implications for the property market

Although the measures stop short of restricting foreign ownership, they lay the groundwork for closer monitoring of real estate transactions. Analysts say enhanced data collection could influence investor behavior and reshape demand patterns, particularly in high-priced urban markets such as Tokyo.

As reported by International Investment experts, Japan’s approach signals a shift toward data-driven regulation rather than outright bans. For international investors, the changes underscore rising compliance expectations and closer scrutiny of cross-border property transactions in markets experiencing rapid price growth.