Japan plans national database to track foreign property ownership by 2027

Why Japan is building a national database now

Japan is preparing a national system to record the nationality of buyers and better track foreign ownership of land and buildings. The plan centers on a new database, linked to a digital real estate base registry, that would let authorities see who owns what, and in some cases who ultimately controls a corporate buyer. After instructing ministers on Nov. 4 to grasp the status of foreign land acquisitions and examine possible rules, Prime Minister Sanae Takaichi put transparency and risk management at the center of the agenda. The government aims to start the system as early as fiscal 2027, following coordination among the Cabinet Secretariat, the Justice Ministry, the Digital Agency, and other bodies.

Officials say the push responds to two concerns. First, the rise of cross border capital flowing into Japanese property, especially in major cities, has fed anxiety about affordability. Second, purchases in sensitive areas have drawn security worries, including land near defense facilities, remote islands close to national borders, and water source regions. Because nationality is not recorded for many deals, the true scale and pattern of foreign buying are hard to measure. Some purchases are made through Japan based corporations that use overseas funds, which further clouds the picture.

The database is one part of a wider policy review that covers immigration, residency controls, and land use. An expert panel convened in late November to weigh changes and is working toward a basic policy by January 2026. Officials frame the registry as an instrument for clarity. It would not by itself set new restrictions. It would create the factual base needed to design proportionate tools, from reporting rules to potential tax changes in segments where risks or distortions appear most acute.

What the new system would record

At the core is a nationality registration system for buyers in categories of real estate that today do not capture that detail. The government intends to use the Digital Agency’s real estate base registry to stitch together records from across jurisdictions and land types. The planned scope is broad and reaches well beyond urban condominiums.

• Condominium units, detached homes, and other real estate
• Forests and farmland
• Large land transactions subject to the National Land Use Planning Law
• Important land near defense related facilities and on border islands designated under the 2022 security related land use law

For deals involving forests or large and sensitive parcels, authorities are considering requirements for corporate buyers to declare the nationalities of principal shareholders and executives. The goal is to identify the nature of purchases when foreign funds are channeled through a Japan based entity. Policymakers are also studying an expansion of transaction notifications under the Foreign Exchange and Foreign Trade Law, which governs capital transactions by non residents.

How Japan’s property registry works today

Japan’s real estate registration system, known as Toki, records land and building information and the legal owner in a property register managed by the Legal Affairs Bureau. Each asset has a title section that lists location and attributes, and a rights section that lists the owner, address, date and reason for registration, and other rights such as mortgages. Anyone can obtain copies for a fee. The register is central to secure transactions and reliable title.

Despite this strong legal framework, nationality is generally not part of the record for condominiums or many other assets. There is a nationality reporting requirement for farmland, but not for most urban residential property. Ownership data can also be outdated for inherited property, a gap Japan began closing in April 2024 by requiring registration of inheritance related ownership changes. These rules improve accuracy but do not resolve the nationality blind spot.

Separately, when a non resident acquires real estate for certain purposes, that transaction can be a capital transaction under the Foreign Exchange and Foreign Trade Law. In such cases the buyer must notify the authorities through the Bank of Japan within a set period, with exceptions. Those notices are not the same as having a unified record of buyer nationality at the point of registration. The proposed database seeks to make nationality, and in defined cases beneficial control through a company, far easier to see across the country.

Who is buying, and where demand is strongest

A weaker yen, very low interest rates by global standards, and a post pandemic rebound in travel have made Japanese property attractive. Investors from overseas have looked at urban offices, hotels, and luxury condominiums. Domestic buyers remain active, and developers have brought high end projects to market. Prices in central Tokyo set fresh records in 2024, with average new condominium prices in the core wards topping 110 million yen. Rising construction costs and limited supply have added to the trend.

Hard numbers on foreign buying are sparse. A government survey of new condominium transactions in Tokyo found that 3 percent of buyers in the first half of 2025 had overseas addresses. That metric captures offshore buyers, not foreign nationals living in Japan, and it excludes many corporate structures. Private sector research and project level sales anecdotes suggest a wide range. Some high end buildings in a few wards have reported shares of offshore buyers well above average, while many suburban and regional projects show far lower foreign interest. Japan’s ability to separate these patterns is limited without nationality data at registration.

This mix helps explain the policy focus. Urban market heat has raised affordability concerns for local households. At the same time, large parts of rural Japan struggle with depopulation and a growing stock of vacant homes known as akiya. Policymakers are trying to calibrate tools that address specific risks in tight city submarkets without discouraging investment where capital and renovation are needed.

National security and strategic land concerns

Japan brought a security related land use law fully into force in 2022 to monitor land around Self Defense Forces facilities and on remote islands near national borders. The law allows authorities to review how land and buildings in those areas are used and to penalize acts that could undermine security functions. It does not bar foreign nationals from buying property. Instead, it focuses on oversight and notification. The new database would complement that approach by making ownership nationality clear at the time of purchase.

Public debate has also centered on purchases near water sources. Some communities fear unregulated extraction or export of groundwater if land ownership is opaque. Clearer records would help prefectures and ministries evaluate buyers, monitor uses, and enforce rules where they exist. Officials argue that visibility, rather than blanket bans, is the best way to manage a diverse set of risks that vary by location and asset type.

Trade obligations also matter. Japan subscribes to nondiscrimination principles under global trade rules. That does not rule out targeted measures for national security or public order, but it makes outright bans on foreign buyers difficult to justify. Policymakers have signaled that any new steps would likely involve reporting, conditions, and taxation rather than blanket prohibitions, with security laws handling the most sensitive zones.

What rules could change next

Ministries are reviewing expansions to notification requirements under the Foreign Exchange and Foreign Trade Law so that more real estate transactions trigger reporting by foreign buyers or non resident investors. Another idea on the table is to require corporate buyers of forests and large or strategically important parcels to declare the nationalities of their principal shareholders and senior executives. That would help authorities identify transactions where control or funding comes from outside Japan, even if the legal buyer is a domestic entity.

Could Japan set different tax rates?

Officials have discussed fiscal tools that differentiate between Japanese and non Japanese owners in defined markets or asset types. Ideas include higher acquisition or holding taxes for non resident owners in overheated urban segments, conditions for purchases in designated zones, and vacancy related levies to curb speculative buying. No decisions have been made, and any such measures would need careful calibration to avoid unintended effects on legitimate investment and on the broader housing supply.

Japan is also studying how other economies police foreign real estate purchases. Around the world, governments have used a mix of approaches. Some apply extra stamp duties on foreign buyers in major cities. Some screen non resident purchases case by case. Others have imposed time limited bans on certain buyer categories or added vacancy taxes to discourage flipping and empty homes. The cabinet’s review of overseas practices, including in Canada, Germany, South Korea, and Taiwan, will inform domestic proposals.

In parallel, the government plans to summarize the shape of regulation in a basic policy on foreign resident and immigration related measures by January 2026. That timeline would leave about a year for legal drafting and systems work if the new registry is to go live starting in fiscal 2027. Several ministries will need to update procedures and align their databases ahead of launch.

How a national database could work in practice

The Digital Agency is building a real estate base registry that can serve as a backbone for multiple ministries. The new system would connect property identifiers from the Legal Affairs Bureau’s register with additional fields, including nationality of buyers, and in defined cases the nationalities of key shareholders and executives behind a corporate buyer. Standardized data would let officials scan for concentration risks in a ward or near a specific facility and build a clearer national picture over time.

Data design will be decisive. To be useful, nationality fields need consistent formats, and declarations by corporate buyers must be specific enough to identify control across layers of ownership. Links to tax records and investment notifications can add context for enforcement. Authorities will also have to decide who can see what. Public access improves market transparency, but privacy concerns arise when nationality or personal data is published. Many countries struggle to balance these interests. International evaluations have found that real estate ownership data is often fragmented and that beneficial owners can be hard to identify. Japan’s project offers a chance to set clear standards from the start.

Anti money laundering is another lens. Real estate has been used worldwide to move and hide illicit funds. If brokers, lawyers, and developers have clear due diligence obligations, and if authorities can check ownership nationality and corporate control quickly, suspicious deals are easier to detect. A machine readable registry, standard forms, and reliable identifiers would support those checks. The government has said it wants a system that improves oversight without stalling legitimate transactions, which means workflow design will matter as much as legal text.

What it means for buyers and the market

Most buyers would face simple extra steps at closing. A buyer using a judicial scrivener to handle registration would provide nationality information along with the existing identification and address documents. Corporate buyers may need to add a statement on the nationalities of principal shareholders and executives for deals in certain land categories. The administrative cost should be small relative to transaction values, yet the information gain for authorities would be large.

For banks, developers, and brokers, clearer rules may remove uncertainty. Lenders can design compliance checks that match the registry’s data fields. Developers marketing new projects can set policies for screening and disclosure that reduce last minute surprises. Where anti money laundering checks are stronger, reputable buyers often find that a transparent process moves faster than an ambiguous one.

Market effects will vary by location. Added visibility can deter short term speculative purchases in a few high price districts. For much of the country, especially in areas with population loss, transactions are unlikely to be affected. Ownership of property in Japan does not grant a visa or permanent residency status. Foreign buyers should plan for the same taxes as Japanese owners, including annual fixed asset taxes, and non residents need a tax agent in Japan to handle filings. For non resident purchases that fall under the Foreign Exchange and Foreign Trade Law, notification requirements already apply and are likely to be broadened.

Timeline and next milestones

Three dates frame the work. First, officials aim to compile findings on foreign real estate rules overseas by the end of the current fiscal year. Second, the cabinet is preparing a basic policy on foreign resident and immigration related measures by January 2026, which is expected to set out the real estate framework. Third, the database and nationality fields could take effect as early as fiscal 2027, subject to legislative work and systems readiness. Complementary digital projects, including an electronic travel authorization planned for fiscal 2028, point to a general shift toward tighter data integration across borders, visas, and property transactions.

Politics will shape the pace. The government has said it wants to address public anxiety while preserving investment and growth. Some voices warn that new rules, if framed poorly, could stoke xenophobia or strain sectors that rely on foreign capital. Others argue that a clear registry and targeted tools are overdue in a market where information gaps have been wide. The database gives policymakers a way to debate actual patterns instead of anecdotes, which is essential for any change that touches both national security and housing affordability.

What to Know

• Japan plans a national database to record the nationality of real estate buyers and track foreign ownership across land and buildings
• The system would use a digital real estate base registry and could start as early as fiscal 2027 after legal and technical work
• Coverage would include condominiums, forests, farmland, large land deals, and land near defense facilities and border islands
• Corporate buyers of certain properties may be required to declare the nationalities of principal shareholders and executives
• Officials are weighing expanded transaction notifications under the Foreign Exchange and Foreign Trade Law
• A government survey found that 3 percent of buyers of new Tokyo condominiums in the first half of 2025 had overseas addresses
• Public concerns include purchases in sensitive areas and rapid price gains in prime city districts
• The registry could enable targeted tools such as differentiated taxes or purchase conditions, with details to be set by January 2026
• Japan is reviewing foreign buyer rules in other countries to guide domestic reforms
• The project aims to boost transparency, support anti money laundering checks, and inform policy without blocking legitimate investment