Japan Plans to Record Buyer Nationality in Real Estate Registration by 2025 - AIAIG - AIAIG

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2025年12月2日

Japan Plans to Record Buyer Nationality in Real Estate Registration by 2025

Disclaimer: The content of this article is for informational reference only and does not constitute investment advice, a solicitation, or a basis for major decision-making. Please make independent judgments and consult professional advisors when needed.

In late November 2025, the Japanese government began discussing the addition of a 'buyer nationality' field in real estate registration records, drawing external attention. This system is currently in the discussion and legislative preparation stage, aiming to more precisely grasp the actual state of foreign property purchases, particularly the trends of overseas funds in new apartments in major cities like Tokyo. This article systematically organizes and analyzes the policy progress, institutional background, trends among foreign and Chinese buyers, and specific impacts on individual and corporate investors from China.

Japan Plans to Record Buyer Nationality in Real Estate Registration by 2025

Question

What is this feature mainly discussing?

AIAIGAnswer

This feature focuses on a new system that Japan began discussing in late November 2025: when handling real estate registration (property transfer), it is proposed to add a field to record the buyer's nationality on the register.

Currently, Japan's real estate register generally only records "name" and "address," without nationality. This discussion means:
- In the future, when processing real estate registration, buyers will need to declare their nationality;
- A new "nationality" field will appear in the register;
- The government can use this to collect statistics and analyze the trends of buyers of different nationalities in Japan's real estate market.

This article focuses on answering three questions:
1. What is the current stage of this "record buyer's nationality" system, and has it been implemented?
2. Based on disclosed data, what is the actual impact of foreign buyers (especially Chinese buyers) in Japan's real estate market?
3. Once the system is formally implemented, what practical changes and potential risks will it bring to Chinese individual and corporate buyers?

Question

Why did Japan suddenly propose adding 'nationality' information to real estate registration?

AIAIGAnswer

The official direct reasons given are mainly two points:

1. Understanding the actual situation and maintaining market health:
- In some major Japanese cities, especially the core areas of Tokyo's 23 wards, prices of newly built condominiums have continued to rise sharply in recent years;
- There is a view in society that a large influx of overseas funds purchasing high-priced condominiums may be driving up housing prices;
- However, existing registration data does not include nationality, so the government cannot accurately answer "what is the actual proportion of foreign buyers," and naturally cannot assess the true extent of its impact on housing prices;
- Therefore, first completing the data by "registering nationality" is a prerequisite for subsequent judgment and policy formulation.

2. Supporting the suppression of speculative real estate flipping:
- Investigations have found that the proportion of short-term flipping (resale within one year of purchase) in newly built condominiums is about 8%~9%, indicating relatively active speculative transactions;
- There is external concern that some of this may be "short-term flipping behavior led by overseas investment funds";
- Registering nationality can help the government distinguish between "domestic buyer speculation" and "overseas buyer speculation," improving the targeting of regulation.

In addition, there is an implicit reason:
- In recent years, Japanese society has accumulated growing concerns about "foreign capital purchasing forests, water sources, and land around bases in Hokkaido," which has driven the enactment of security-related laws such as the "Important Land Survey Act";
- Against this backdrop, gaining an overall grasp of "foreigners holding Japanese land and real estate" also holds significance for long-term security and resource management.

Question

How is this policy related to rising housing prices and speculative flipping?

AIAIGAnswer

In its explanations, the Japanese government has repeatedly linked "registering nationality" with soaring housing prices and speculative flipping:

1. Real pressure from housing price issues:
- Prices of newly built condominiums in cities like Tokyo, Yokohama, and Nagoya have reached record highs, causing discontent among owner-occupiers;
- When prices deviate from income and rental levels, the political pressure on the government increases, forcing it to respond to questions about "why housing prices are rising so quickly."

2. Objective existence of speculative transactions:
- Surveys show that the proportion of resale within one year of purchase in newly built condominiums is higher than past levels, indicating widespread "short-term flipping and speculation";
- These speculative transactions not only drive up project launch prices but also exacerbate market sentiment and volatility.

3. Nationality information as a tool to dissect the problem:
- Without nationality information, the government can only see that "the short-term resale rate of a certain project is high," but it is difficult to distinguish: whether it is domestic speculators flipping or foreign capital engaging in short-term arbitrage;
- Once data on "nationality + holding period + transaction price" is available, it can more accurately determine:
- Which type of buyers (nationality, residence) prefer short-term flipping;
- Which areas are more likely to become targets for speculative funds.

Therefore, while "registering nationality" itself does not directly restrict who can buy property, it is seen as infrastructure for dissecting housing price and speculation issues. Subsequently, the government can consider whether to impose restrictions or additional taxes on specific areas, types of transactions, or patterns of speculative behavior based on the data.

Question

Is this policy related to Japan's national security or land issues in sensitive areas?

AIAIGAnswer

From public statements, this "recording nationality" system primarily emphasizes real estate market health and transparency, rather than directly linking it to national security, but there is some contextual connection between the two:

1. Precedents in the security field:
- Japan previously enacted and implemented the "Important Land Survey Act," allowing the government to investigate and regulate land use around "important areas" such as Self-Defense Forces bases, nuclear power plants, Japan Coast Guard facilities, and remote border islands;
- Societal vigilance against "foreign capital quietly purchasing water sources, forests, and land around bases" has been a key driver of these laws.

2. Fragmentation of the current system:
- Currently, nationality and other information are systematically collected only in specific situations, such as agricultural land acquisition;
- For ordinary residences and condominiums, registration does not require mandatory declaration of nationality, making information on foreign ownership at the national level relatively scattered.

3. Potential medium- to long-term direction:
- Although the direct reason for this "registering nationality" is focused on housing price and speculation issues, once a national real estate database including nationality information is established, the government gains an additional set of foundational data usable in the security field;
- When it is discovered that foreign-owned land is concentrated in specific areas (e.g., near ports, around military facilities), further investigation and restrictions can be conducted in conjunction with existing security laws.

In summary:
- In the short term, this is an economic and market regulation tool;
- In the long term, it will also become one of the 'underlying data sources' for security and land policies.

Question

What is the approximate proportion of foreign buyers in the current real estate market?

AIAIGAnswer

Since 'nationality' is not yet included in the registry, existing statistics can only roughly estimate the proportion of foreign buyers based on 'whether the buyer's address is overseas.' According to a recent survey by the Ministry of Land, Infrastructure, Transport and Tourism:

- In new condominiums in Tokyo's 23 wards, the proportion of buyers with registered addresses overseas is approximately around 3%;
- In six core urban areas (such as Chiyoda Ward, Chuo Ward, Minato Ward, Shinjuku Ward, Shibuya Ward, Bunkyo Ward, etc.), this proportion increases to about 7.5%, with some popular areas even approaching 10%;
- In other words, the higher the price and the more central the location, the more prominent the presence of buyers with overseas addresses.

It is important to note that this '3%~7.5%' only represents the proportion of 'buyers with registered addresses overseas':
- It does not include buyers who are long-term residents in Japan but hold foreign nationality and have registered addresses within Japan;
- It also does not include overseas funds purchasing through Japanese corporations or SPVs (special purpose vehicles).

Question

What is the situation regarding short-term flipping (speculation) in new condominiums in Japan?

AIAIGAnswer

The same survey shows that the proportion of new condominiums resold within one year of purchase is about 8.5% (with slight variations across cities).

This means:
- Approximately 1 out of every 12 new units is resold within a year;
- Such short-term resales are not distinguished by buyer nationality in the statistics, meaning they include both Japanese speculators and possibly overseas funds;
- For developers and the government, this proportion is sufficient to indicate that 'the new housing market has significant speculative activity.'

From a regulatory perspective:
- Real estate industry groups are developing new industry guidelines, such as restricting 'pre-delivery resales,' limiting multiple signings by one person, and controlling speculative sources;
- The government hopes to use data on 'registered nationality + holding period + price changes' to determine whether targeted measures against short-term speculation are needed in terms of taxation or systems.

Question

What are the limitations of existing data on foreign buyers? Why is it necessary to register nationality?

AIAIGAnswer

The limitations of current data mainly fall into three points, which are also the direct reasons for 'why nationality registration is necessary':

1. Only 'address overseas' is visible, not 'nationality':
- Using 'overseas address' to infer foreign buyers results in a conservative estimate;
- Many foreigners live long-term in Japan (for work, study, permanent residency, etc.), with addresses within Japan, and are counted as 'Japanese domestic buyers' in existing statistics, making it impossible to distinguish nationality.

2. Difficulty in identifying the funds behind corporate buyers:
- The registry often only lists 'such-and-such corporation' or 'such-and-such limited liability company,' making it hard to see from the surface whether the shareholders are foreign capital;
- For real estate held through Japanese corporations, it is challenging to determine 'how much is Chinese capital, how much is from other countries.'

3. Lack of a unified, centralized database:
- Data on foreign ownership of land is scattered across different administrative systems, with inconsistent standards and varying update frequencies;
- For national-level policymakers, it is difficult to grasp the 'national picture of foreign capital in real estate purchases' in real-time.

Therefore, from a technical and regulatory perspective, directly including nationality in the registry is the most straightforward method to improve data quality and uniformity. Only by combining this with corporate shareholder information or ultimate beneficiary information can we truly answer 'how significant foreign capital is in the Japanese real estate market.'

Question

In official statistics, does the number of Chinese buyers appear high?

AIAIGAnswer

In the currently available official statistics, the 'visible' number of Chinese buyers is not particularly prominent:

- Taking data from a specific concentrated report as an example, among buyers of newly built apartments in Tokyo, based on the number of buyers with 'registered addresses overseas and identifiable regions':
- Taiwanese buyers rank at the top;
- The direct registration number for Chinese (mainland) buyers is only around a few dozen cases;
- Simply looking at such statistical tables, it's easy to get the impression that 'among foreigners, Taiwanese buyers are numerous, while Chinese buyers are not as many.'

However, this does not accurately reflect the influence of Chinese capital, because:
- Official statistics primarily focus on 'individual names + overseas addresses,' while a large amount of Chinese capital is deployed through legal entities or addresses in Japan;
- For 'buyers purchasing properties in the name of Japanese legal entities + long-term residents in Japan holding Chinese passports,' current statistics struggle to accurately identify them.

Question

Why does the industry feel that 'there are many Chinese buyers,' but official numbers are not high?

AIAIGAnswer

The industry generally believes that official numbers underestimate the actual presence of Chinese capital in the Japanese real estate market, mainly due to the following reasons:

1. Holding through Japanese legal entities, not in personal names:
- Many Chinese investors first establish legal entities in Japan (such as limited liability companies or corporations), which then purchase apartments or entire buildings;
- On the registration records, only 'XX LLC' is visible, without revealing that the ultimate shareholders are from China;
- In official statistics, these are categorized as 'domestic legal entity purchases.'

2. Using existing Japanese companies as 'shells' for operations:
- Some investors acquire existing Japanese companies and use them to purchase properties in large quantities;
- The registration still shows 'Japanese company,' but actual control has been transferred to Chinese investors.

3. Chinese residents in Japan long-term are treated as 'domestic buyers':
- Many Chinese people work, do business, or study long-term in Japan, with addresses within the country;
- These purchasing behaviors are statistically classified as 'buyers with addresses in Japan,' making it impossible to distinguish nationality.

Therefore, the firsthand experience of real estate agents and developers is:
- In the high-end apartment market in central Tokyo, the actual proportion of Chinese capital is significantly higher than official numbers indicate;
- Particularly in tower apartments priced over 100 million yen, industry insiders estimate that 20% to 30% of transactions have Chinese capital behind them.

Question

What are the common 'invisible investment' structures for Chinese capital in the industry?

AIAIGAnswer

Based on public reports and industry feedback, the common 'invisible' structures used by Chinese capital in Japanese real estate investment mainly include:

1. Establishing new Japanese limited liability companies (合同会社/LLC):
- Setting up low-cost limited liability companies in Japan remotely or through delegated services;
- Using these companies to purchase, hold, and rent properties;
- On registration records, they appear as 'Japanese companies,' making nationality difficult to identify.

2. Acquiring existing Japanese companies:
- Directly acquiring operating or shell Japanese legal entities to bring them under Chinese control;
- Using these 'established Japanese companies' to purchase properties, making it hard for outsiders to detect shareholder changes from registration information;
- Using 'old companies' may facilitate processes like bank account opening and loans.

3. Multi-layered shareholding and cross-border structures:
- Chinese capital holds Japanese legal entities through intermediate holding companies in places like Hong Kong or Singapore, forming multi-layered SPV structures;
- On Japanese registration records, it still only shows 'Japanese legal entity,' but the ultimate beneficiaries are Chinese investors or families.

Due to these structures, current statistics cannot fully reveal the true share of Chinese capital, which is one reason why the Japanese government aims to fill information gaps through 'registering nationality + strengthening substantive review of legal entities.'

Question

After registering nationality, what changes will there be in the home-buying process for individual Chinese buyers?

AIAIGAnswer

Based on the currently disclosed information, the direct impact on the process for individual Chinese buyers is mainly concentrated at the "information declaration" level:

1. Adding nationality information during the registration step:
- When handling real estate transfer and registering ownership, nationality needs to be filled in;
- Entries in the registration book will include statements like "Nationality: China";
- This step is similar to filling in nationality when opening a bank account, with limited increase in process complexity.

2. Information is systematically stored and statistically analyzed:
- The property you purchase in Japan will be categorized into a database "statistics by nationality";
- The government can analyze the number of Chinese buyers, area held, price levels, etc., by dimensions such as nationality, region, city, and property type.

3. Other basic processes remain largely unchanged:
- Traditional processes like signing sales contracts, paying down payments, bank loan reviews, and transfers themselves will not fundamentally change due to "having a nationality field";
- Currently, there are no nationwide regulations proposing "additional permits required for certain nationalities" or "complete prohibition of property purchases for certain nationalities."

For individual Chinese buyers, the most direct change is: home-buying behavior shifts from "not being statistically captured" to "being precisely recorded in the database."

Question

Will this system immediately restrict Chinese people from buying homes? Could a situation of "prohibiting Chinese people from buying homes" arise?

AIAIGAnswer

Based on current official statements and policy design directions:

1. In the short term, it will not evolve into direct nationality-based purchase restrictions:
- The Japanese government clearly emphasizes that the purpose of this system is to "grasp the actual situation, improve transparency, and curb speculation," not to impose discriminatory restrictions targeting a specific nationality;
- Considering WTO-related commitments and the foreign investment environment, Japan is unlikely to easily introduce comprehensive nationwide measures like "prohibiting citizens of a certain country from buying homes."

2. There is a possibility of "asymmetric tightening" in the medium to long term:
- Once data clearly shows that rapid price increases in certain areas are highly correlated with buyers of a specific nationality, local or central governments may implement stricter reviews or special taxes in those areas;
- Legally, such measures often target "regions," "purposes," or "transaction types" rather than explicitly stating "prohibiting a certain nationality," but the practical result may disproportionately affect certain nationalities.

3. Individual developers and management entities may have "implicit selection":
- Even if not prohibited by law, market entities (developers, management companies, homeowners' associations, etc.) may exhibit bias or "soft refusal" against specific nationalities in actual sales and management;
- Once "nationality" becomes part of the registration information, it can more easily serve as a marker for judgment in information disclosure or internal circulation.

In summary:
- The system itself is not a tool to "immediately prohibit Chinese people from buying homes";
- But it provides foundational data for future more refined or selective regulation;
- Chinese buyers should view this as a signal of "increased transparency + risks being more clearly identifiable," rather than simply "being forced out of the market immediately."

Question

After registering nationality, what are the risks for Chinese buyers regarding privacy and potential discrimination?

AIAIGAnswer

The privacy and discrimination risks brought by registering nationality can be viewed from two levels:

1. Information disclosure and privacy concerns:
- Japan's real estate registration information is publicly accessible information to a certain extent (requiring payment of query fees or having a legitimate purpose);
- Once nationality is recorded, in theory, those querying can know that the owner of a property is an "individual of Chinese nationality";
- For some investors, this may cause psychological discomfort of "being marked," especially for those concerned about asset concealment or security.

2. Potential differential treatment and discrimination risks:
- In the past, some projects have been exposed where developers internally marked sales strategies with "not sold to Chinese" or imposed various additional conditions on Chinese buyers;
- The easier it is to identify nationality information, the more technically feasible such "implicit discrimination" becomes (e.g., adding internal conditions when screening clients or approving contracts).

For normal Chinese buyers for self-occupation or long-term investment:
- The impact on daily life may not be very direct, but when negotiating before purchase and selecting projects, it is necessary to pay more attention to the attitudes of developers and agents;
- If obvious discriminatory clauses appear in the future (e.g., publicly advertising not to sell to a certain nationality), they may be legally challenged, but there remains gray area in practical enforcement.

In short: Registering nationality increases transparency while also increasing the possibility of "being identified," which is a point that investors who value privacy and political risks need to consider.

Question

What impacts will Chinese enterprises purchasing properties through Japanese corporations face?

AIAIGAnswer

For Chinese enterprises and high-net-worth families accustomed to holding real estate through Japanese corporations, the impacts can be categorized into "short-term" and "potential medium to long-term":

1. Short-term: When the registration system is first implemented
- If the registry only includes a nationality field for "natural persons" and still only records the company name and location for corporations, then:
- Structures purchasing properties in the name of Japanese corporations will still not directly expose "Chinese funds" at the registration level;
- Properties held indirectly by Chinese funds through LLCs/stock companies may still be classified as "held by domestic corporations" in statistics.

2. Medium to long-term: If the system is further refined
- The government may explore requiring registration or reporting of "ultimate beneficial owners (UBOs) behind corporations" or "nationalities of major shareholders," especially in high-value or sensitive area transactions;
- Once such substantive reviews are introduced, the convenience of using Japanese corporations as 'anonymous shells' will decrease:
- Additional materials on shareholders and fund sources will be required;
- Banks, tax authorities, and regulatory bodies may increase the frequency of inquiries into large transactions.

3. Increased compliance costs and transparency requirements
- For legitimate Chinese institutions, adding nationality and shareholder disclosures mainly means higher compliance costs and information disclosure obligations;
- For funds attempting to use multi-layered structures to evade regulation, the risk of being identified and tracked will significantly increase in the future.

Overall:
- In the short term, holding structures through Japanese corporations can still partially 'obscure' nationality information;
- But from a policy direction perspective, the long-term trend is "substantive identification of real funders," so it would be more prudent for Chinese enterprises to prepare for compliance and information disclosure in advance.

Question

What further regulatory directions might emerge after the policy is implemented?

AIAIGAnswer

After the "nationality registration" system is launched, the data available to the Japanese government will be greatly enriched, and future regulatory directions that may develop include:

1. Regional differentiated management:
- If data shows that the proportion of foreign funds, such as from China, in certain core areas (e.g., Minato Ward, Chuo Ward in Tokyo) is excessively high and highly correlated with rapid price increases, the government may impose stricter approvals or tax burdens on new projects in these areas;
- Drawing on experiences from countries like Canada and New Zealand, Japan may also consider imposing additional taxes or setting holding period requirements for "non-resident property purchases" in specific regions.

2. Tax system optimization targeting short-term speculation:
- Regardless of nationality, short-term flipping (e.g., resale within 1-2 years of holding) may face heavier capital gains taxes or additional taxes;
- Nationality data helps the government determine whether these short-term speculative activities are concentrated among locals or foreigners, enabling more precise tax system design.

3. Restrictions on real estate in sensitive areas and for specific uses:
- In areas near military bases, ports, airports, water sources, or energy facilities, property holdings by foreigners or specific nationalities may be subject to stricter scrutiny;
- For assets of strategic significance, such as large hotels, long-term rental apartments, or data centers, more approval thresholds may emerge in the future.

For Chinese investors, this means:
- Future policy risks will become more "refined," no longer just national-level "can buy / cannot buy," but specific restrictions based on region + use + holding method;
- Avoiding high-sensitivity areas and extreme speculative models in advance will be an important means of controlling policy risks.

Question

How should Chinese investors adjust their strategies and expectations when buying property in Japan?

AIAIGAnswer

Considering current policy discussions and trends, Chinese investors can consider the following strategic adjustments in Japanese real estate positioning:

1. Shift from 'concealment' to 'compliance and transparency':
- The probability of being identified for past methods using multi-layered SPVs or Japanese companies for 'invisibility' will gradually increase in the future;
- For long-term holdings and operational projects, transparency, compliance, and clarity in taxation and fund sources are safer than 'nominal concealment';
- It is recommended to collaborate with professional agencies familiar with Japanese and Chinese tax systems and regulations to review holding structures.

2. De-emphasize short-term speculation and strengthen long-term holding logic:
- Japanese authorities already view short-term property flipping as problematic, and the likelihood of further crackdowns is high;
- Chinese investors frequently engaging in resales within a year in Japan may become key targets for attention;
- Investments aimed at medium to long-term rentals, asset preservation, and exchange rate hedging are more aligned with Japan's current policy direction.

Question

What overall signal does this policy convey, and what does it mean for Chinese buyers?

AIAIGAnswer

Overall, Japan's plan to record buyer nationality in real estate registration conveys the core signals that:

1. Moving from 'extensive regulation' to 'refined regulation':
- In the past, due to a lack of nationality and beneficial owner information, regulation mainly focused on price and transaction volume levels;
- In the future, it will start with 'who is buying, how much they are buying, and how long they hold' to conduct more detailed analysis and policy design.

2. Changing from 'invisible foreign capital' to 'quantifiable foreign capital':
- For Chinese buyers, many transactions previously did not show a 'nationality label' in statistics;
- After registering nationality, the presence of Chinese buyers will become a set of 'visible numbers' that can be charted and discussed in public discourse.

3. Moving from 'completely open' to 'conditionally open' (potentially in the long term):
- In the short term, Japan still welcomes legitimate foreign capital into the real estate market, especially investments that contribute to urban renewal and regional revitalization;
- But once data reveals certain risks (such as excessive housing price bubbles or concentrated holdings in sensitive areas), targeted restrictions and additional burdens may emerge.

For Chinese buyers, this is neither a signal of 'immediate closure' nor an environment of 'no need to worry at all,' but rather:
- Your presence will shift from 'marginal data' to 'numbers amplified in discussion';
- Investment strategies need to align with Japan's regulatory pace, shifting from short-term speculation to long-term, from hidden to compliant, and from single assets to more refined risk management.

Question

From a medium to long-term perspective, is Japanese real estate still attractive to Chinese buyers?

AIAIGAnswer

From a medium to long-term perspective, considering the 'nationality registration system' alongside the fundamentals of Japanese real estate, a relatively balanced judgment can be drawn:

1. Attractiveness remains:
- Japan still has a relatively mature legal system, well-established property rights protection, and transparent market rules;
- Cities like Tokyo, Osaka, and Fukuoka maintain long-term advantages in economic activity, population appeal, and rental demand;
- For Chinese investors, Japanese properties still hold portfolio value in terms of currency diversification, asset preservation, and certain high-end rental markets.

2. Strategies must be upgraded:
- The previous investment model primarily based on 'cheap exchange rates + low interest rates + short-term price increases' faces more policy and public opinion risks;
- In the future, it is more suitable to emphasize: prime locations, stable rents, standardized holdings, and reasonable leverage, rather than a 'bet on a sudden surge' approach.

3. Policy and public opinion risks need to be incorporated into ROI models:
- Registering nationality itself will not erase a project's cash flow, but it may affect future potential tax changes, transaction difficulties, and even buyer group acceptance when selling;
- When calculating ROI, it is recommended to include a 'policy risk coefficient' as a separate assumption for stress testing.

In short: Japanese real estate still holds value for Chinese buyers, but the rules of the game are becoming more 'transparent + serious'. In such an environment, rationality, compliance, and long-term focus are more appropriate keywords.

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