Kobe Eyes Vacant Unit Tax to Curb Speculation in High-Rise Condos

KOBE, Jan 14 (News On Japan) - Kobe is set to become the first city in Japan to consider imposing a tax on vacant units in high-rise condominiums. Mayor Hisamoto expressed strong support for the measure, stressing that the city will avoid repeating the situation seen in Tokyo’s Harumi Flag development.

In a press conference on January 10th, Mayor Hisamoto discussed the proposed initiative to introduce a new tax targeting unoccupied units in the city’s central tower condominiums, saying, "This is a necessary measure to curb the growing number of vacant units. We have been advised to create a non-statutory tax for this purpose, and I share this concern."

The mayor cited the example of Harumi Flag, a redevelopment project in Tokyo’s coastal area, where a large number of units were purchased for investment rather than residence, leading to low occupancy rates. "We do not want Kobe to become like Harumi Flag," he said firmly.

Opened in May last year, Harumi Flag has since faced criticism for its lack of residents. Late-night visits revealed that only a few units had their lights on, and ownership records showed that over 40% of units in one building were registered under corporate names, suggesting speculative purchases by businesses.

The issue of vacant units is also present in Kobe’s high-rise condominiums. Recent data indicated that 21.2% of units between the 30th and 39th floors and 33.7% of those on the 40th floor or higher remain unoccupied.

Concerns Over Abandoned Units and Criticism on Social Media

Toshiyuki Uemura, chair of the expert panel that proposed the tax, explained, "Owners who do not reside in their units are unlikely to participate actively in building management. Without proper management, these properties risk becoming derelict over time."

Since 2020, Kobe has imposed regulations on the construction of new tower condominiums in its central areas, citing issues such as income disparities between low and high floors and a lack of nearby childcare facilities. By introducing the vacant unit tax, the city hopes to discourage speculative buyers, making units more affordable for those who wish to live in them.

However, the proposal has drawn criticism online. Comments on social media included, "A vacant unit tax is outrageous," and "It will lead to a price war on rental properties, reducing real estate values."

Despite the concerns, Kobe plans to begin a full-scale review of the proposal next fiscal year. Key issues to address include how to define a "vacant unit" and ensuring that the tax does not overlap with existing property taxes.

Uemura noted that since this would be Japan’s first case of such a tax, it would require the approval of the Ministry of Internal Affairs and Communication as well as local government approval. "It remains uncertain whether the ministry will approve it," he added.

Given the commonality of the issue across urban areas, if Kobe successfully implements the tax, it may pave the way for similar measures in other municipalities. Uemura suggested that such taxes could become widespread, much like the accommodation tax, which was first introduced by one municipality and later adopted nationwide.

Source: ANN

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