Osaka City Approves Japan's First Citywide Vacant Home Tax

The Neyagawa City Assembly unanimously passed the measure on July 9. The city hopes the additional financial burden will encourage owners to place unused properties on the rental or sales market, helping ease a shortage of available housing and support further population growth.

Neyagawa has recorded more people moving into the city than leaving over the past two years, increasing demand for housing, but officials say the supply of homes remains insufficient. At the same time, about 6,400 vacant properties in the city are neither available for rent nor listed for sale.

One such property visited by city officials was built more than 50 years ago and has stood vacant for over two decades.

"Considering its age, it is a clean property that has been maintained quite well," said Naoki Yuda, head of a division in the city's urban development department.

However, the city has been unable to contact the heirs to the property. Yuda said it is difficult for local authorities to intervene on their own when owners or heirs still legally exist.

By imposing the new tax, Neyagawa aims to prompt owners to rent or sell vacant homes, increasing the housing supply and helping attract more residents.

"Neyagawa has seen a trend of net population inflows in recent years," Mayor Keisuke Hirose said. "We can achieve a significant effect precisely because we are acting at this time. I believe the strong message sent by a tax will lead to changes in behavior."

Residents expressed mixed reactions to the measure.

"Just thinking about having to pay another tax feels overwhelming. It sounds difficult," one resident said.

Another welcomed the policy, citing concerns about a badly deteriorated house behind her home. "I wonder who would take responsibility if it suddenly collapsed. I do not think the situation will move forward unless measures such as taxation are introduced, so I have high expectations."

Kyoto is also planning to introduce a vacant home tax from fiscal 2030, but its measure will apply only to urbanized areas. Neyagawa will be the first municipality in Japan to impose such a tax across the entire city and is aiming to begin collection in fiscal 2029.

Municipalities across Japan have struggled to address the growing number of vacant homes.

One factor blamed for the problem is a property tax system under which taxes on residential land can be reduced to as little as one-sixth of the standard amount while a house remains standing. Owners may therefore face higher land taxes if they demolish a vacant building and leave the site empty.

The number of vacant homes that are neither rented nor offered for sale has continued to rise nationwide, reaching about 3.85 million in the latest survey. That is equivalent to roughly one in every 20 homes in Japan.

Some municipalities are taking the opposite approach by offering subsidies rather than imposing additional taxes.

In Nagata Ward in Kobe, a former automobile repair shop that had been abandoned for more than 10 years has been renovated into Tenjincho Stock & Store, a workshop where local residents can gather and seek advice on renovation and do-it-yourself projects.

"The building was originally in extremely poor condition," operator Masashi Koaze said. "There were many cats, holes in the roof, and sections where the sheet-metal walls were completely missing."

The renovation cost about 10 million yen, half of which was covered by a 5 million yen subsidy from Kobe.

Kobe provides subsidies of up to 5 million yen for vacant-home renovation projects that meet certain conditions, including making the renovated property available for use by local residents.

Takashi Yoshiyama, a division head at Kobe's housing and architecture bureau, said similar projects were beginning to spread to several other parts of the city. "We want to make use of vacant homes that can still be used," he said.

Source: YOMIURI