If you're holding onto a vacant family home or similar property, the risk isn't just the hassle of upkeep — depending on how neglected it becomes, you could also face guidance from the local government. Here's how the designated vacant house (tokutei akiya) system works, and how to think about the right time to sell.
- A vacant home that isn't properly maintained can be designated a "designated vacant house" (tokutei akiya).
- Once a recommendation is issued, the residential land property tax reduction is lifted, which can raise your tax bill.
- A 2023 law revision also introduced an earlier-stage category called a "poorly managed vacant house."
- In cases where conditions don't improve, it can escalate to the municipality carrying out demolition itself.
- If you have no plans to use the property going forward, considering a sale sooner tends to keep the burden lower.
The longer it's left, the more the burden and risk grow
A vacant home tends to deteriorate from the moment people stop living in it, and the burden of upkeep and property tax continues the entire time it sits vacant. On top of that, if the property stays poorly maintained, it can become a target for government guidance. Deciding early on what to do with it — whether to sell it, rent it out, or something else — helps keep that burden in check.
What happens when a home is designated a "designated vacant house" (tokutei akiya)
Japan's Act on Special Measures for Vacant House Countermeasures gives municipalities a framework for designating a vacant home as a "designated vacant house" (tokutei akiya) if it poses a risk of collapse, sanitation issues, or other serious impact on the surrounding area. Once designated, the municipality first provides guidance and advice; if conditions don't improve, that escalates to a formal recommendation, and then to an order. If the order is ignored and the dangerous condition continues, the municipality can ultimately carry out demolition itself in place of the owner, and bill the owner for the cost.
A recommendation can raise your property tax
Land with a residential building on it qualifies for a residential land property tax reduction that lowers the tax burden. But once a property receives a formal recommendation as a designated vacant house, it can be excluded from that reduction. As a result, the tax can end up similar to that on vacant land, which is worth keeping in mind, since it can mean a significant jump in your tax burden.
The "poorly managed vacant house" category
A 2023 law revision also introduced a new, earlier-stage category called a "poorly managed vacant house," which sits below the designated vacant house threshold. This means a property can now become subject to government guidance or a recommendation even before it reaches the point of being designated a full "designated vacant house," making it that much more important to address issues early.
The ongoing costs of holding onto a vacant home
On top of property tax and city planning tax, ongoing maintenance costs — trimming the garden, inspecting and repairing the building — keep adding up. We also cover how to think about the upkeep costs of an inherited vacant home in Selling an Inherited Family Home: The Process and Tax Basics. The longer a property sits unoccupied, the easier it becomes to miss internal deterioration, like a leaking roof or termite damage, so regular check-ins on the property matter too.
How to think about the right time to sell
If you have no concrete plans to live in the property or rent it out going forward, considering a sale sooner rather than later — factoring in the upkeep burden and tax risk — is one option worth weighing. As the building deteriorates further, it can become harder to find a buyer, or demolition costs can climb, so putting off the decision for too long tends to work against you in the end. We cover the factors to weigh when deciding between renting and selling in Rent or Sell? Where the Decision Comes Down To, and the criteria for deciding whether to sell as-is or demolish first in Sell As-Is or Demolish First? How to Decide Whether to Tear Down a Vacant Home — both worth a look as well.
Frequently asked questions
What happens if a home gets designated a vacant house?
The municipality moves through stages of guidance, then a formal recommendation, then an order. Once a recommendation is issued, the residential land property tax reduction is lifted, which can raise your tax bill. If conditions don't improve, it can even escalate to the municipality carrying out demolition itself.
Why does the property tax go up?
Land with a home on it qualifies for a residential land tax reduction, but once a property receives a formal recommendation as a designated vacant house, it can be excluded from that reduction, resulting in a tax bill similar to that of vacant land.
When is the right time to sell a vacant home?
It comes down to weighing the burden of upkeep, the tax impact, and how much the building has deteriorated. If you have no plans to use it going forward, considering a sale sooner rather than later tends to keep the burden lower.
Summary
Leaving a vacant home unattended keeps the upkeep burden and property tax adding up, and also risks a designation as a vacant house that raises your tax bill further. If you have no plans to use it going forward, it's worth considering a sale or another use sooner rather than later.