Chapter 6 — Reading a Japanese property

Two things you are buying

In most countries, a house is one asset. In Japan it is two, registered separately, valued separately, and behaving in opposite directions.

The land holds or gains value. It does not depreciate. In desirable locations it appreciates.

The building loses value, on a schedule. A wooden house is treated as having a useful life of twenty-two years for tax depreciation purposes, light steel around nineteen to twenty-seven depending on thickness, reinforced concrete forty-seven. Market practice broadly follows the tax treatment, which means a thirty-year-old wooden house is commonly priced as though the structure contributed nothing at all.

This is not a quirk of accounting. It changes how you should think about almost every decision that follows.

It means the location matters more than the house. Two structurally identical houses, one in central Kyoto and one in a village an hour away, will differ in price by a factor of ten. Almost all of that difference is land.

It means a "cheap" house is usually a cheap plot. A ¥3,000,000 house in rural Japan is not a bargain building. It is inexpensive land with a free building on it, and the building may be a liability rather than an asset.

It means the age of the building tells you about the land price. When you see a listing for an old house at a high price, you are looking at expensive land. When you see a new house at a low price, the land is cheap.

What the numbers on a listing actually mean

Price. Quoted in 万円, units of ten thousand yen. 2,800万円 is ¥28,000,000. The single most common error a foreign buyer makes is being out by a factor of ten.

土地面積 — land area. In square metres. Sometimes also in 坪 (tsubo), which is 3.306 square metres. Japanese agents think in tsubo when discussing value per unit area.

建物面積 — building area. Total floor area across all storeys, not footprint.

間取り — layout. A number plus letters. 3LDK is three rooms plus a combined living-dining-kitchen. S denotes a service room, typically one that fails the natural light requirement to be counted as a bedroom. The count excludes bathroom, toilet and entrance.

築年月 — year and month built. The most important number on the listing after the price, for reasons covered below.

駅徒歩 — minutes to the station. Calculated at exactly 80 metres per minute in a straight line along the road. It ignores hills, traffic lights and river crossings, and it is the same formula for every listing in the country, which makes it comparable if not always accurate.

建ぺい率 / 容積率 — building coverage and floor area ratio. The percentage of the plot you may build on, and the total floor area you may build relative to plot size. 60% / 200% on a 100 square metre plot means a 60 square metre footprint and 200 square metres total. These determine what you could replace the house with.

Why 1981 matters

Japan's seismic building standard changed on 1 June 1981 — the New Seismic Standard (新耐震基準). The requirement shifted from "should not collapse in a moderate earthquake" to "should not collapse in a severe one." Performance in the 1995 Kobe and 2016 Kumamoto earthquakes differed sharply between buildings on either side of this date.

A house built before 1981 is entirely legal to buy, own, live in and sell. But the date affects earthquake insurance premiums, affects mortgage eligibility with some lenders, and will affect what a future buyer thinks.

Note that 築年月 records completion. A house completed in March 1981 was designed and built under the old standard.

The line about the road

Somewhere on the property detail you will find something like:

私道負担・道路　無、西4ｍ幅（接道幅4.4ｍ）

Three separate pieces of information, and they are among the most consequential on the page.

私道負担 — private road burden. Whether part of the land you are buying is actually road. 無 means none.

西4ｍ幅 — the road itself. A four-metre-wide road on the western side.

接道幅 4.4ｍ — your frontage onto it. How much of your boundary touches that road.

Japan's Building Standards Act requires a plot to have at least two metres of frontage onto a road of at least four metres width in order to build on it. Fail either test and the plot is 再建築不可 — you may repair the existing house indefinitely, but you may never replace it.

These properties are cheap for exactly this reason, and they are common in older urban neighbourhoods where streets predate the 1950 law. They are not automatically bad buys — a machiya you intend to restore and keep may be perfectly suitable. But you must know before you offer, because it affects resale, insurance and financing. Chapter 12 returns to this.

Frontage also tells you the shape of the plot. Divide the land area by the frontage and you have the approximate depth. A 60 square metre plot with 4.4 metres of frontage is roughly fourteen metres deep — a ratio of more than three to one. That is a narrow house, usually three storeys, usually with windows on two sides only.

Zoning

Every plot in a city planning area carries one of thirteen use designations, and it governs what may be built nearby as much as what you may build.

The ones you will meet most often:

第一種低層住居専用地域 — Category 1 Low-rise Residential. The most protective. Height limits, no commercial buildings of consequence. Quiet, and it will stay quiet.

第一種・第二種住居地域 — Category 1 and 2 Residential. Mixed, with shops and small offices permitted.

近隣商業地域 / 商業地域 — Neighbourhood Commercial and Commercial. Busy, taller, and the most permissive for anything you might want to run from the building.

準工業地域 — Quasi-industrial. Often surprisingly residential in practice, and usually cheaper than the designation suggests.

市街化調整区域 — Urbanisation Control Area. Development is restricted. Cheap land, often with severe limits on rebuilding. Approach with care.

無指定 / 都市計画区域外 — Unzoned or outside the city planning area. Rural. Few restrictions, few services.

Zoning matters for three practical reasons: it determines what your neighbours may build, it affects whether you can run a business or a guesthouse from the property, and it is one of the inputs into whether short-term letting is permitted at that address.

Who carries the risk on an old house

This is the part of Japanese practice that most surprises buyers from other markets, and it deserves its own section.

The seller's liability is usually removed

Under normal Japanese practice, a seller of a second-hand property carries contractual conformity liability (契約不適合責任) for a period after completion — commonly around three months. If something is materially not as contracted, you have a remedy.

On older houses, sellers very frequently ask to remove it entirely. The contract is written so that the seller accepts no liability of any kind once the sale completes. This is not unusual, it is not a red flag about that particular seller, and it is not generally negotiable — an eighty-year-old inheriting a house they never lived in is not in a position to guarantee its condition, and their agent will advise them accordingly.

What you receive instead is a disclosure statement (告知書), prepared from the seller's own account of the property: known leaks, past repairs, boundary disputes, anything they are aware of. It is useful and you should read it carefully. But it records what the seller knows, not what is true.

The consequence is simple and worth stating plainly. Assessing the condition of the building, and deciding whether to buy it, is your responsibility. Complaints after completion will not be entertained. Everything therefore depends on what you establish before you commit.

And you cannot pause the sale to investigate

Japan does have professional building inspection — 建物状況調査, carried out by a qualified inspector. You can commission one, and on an older wooden house you probably should.

Here is where the commercial custom differs from what you may be used to.

In the United States, an inspection contingency is standard: the buyer's offer is accepted, and a defined window — commonly seven to fourteen days — opens during which the buyer inspects and may cancel and recover their deposit. Zillow reported in 2024 that around two thirds of mortgage buyers included one in their final offer. Many such clauses give the buyer sole discretion, meaning they may walk away even over a minor finding. The property is effectively held while the buyer investigates.

Japan has no equivalent convention. Inspections are treated as the buyer's own choice rather than a right that suspends the sale, and most Japanese buyers do not commission one at all. The listing agent will not take the property off the market while you arrange it. If a full-price offer arrives during that period, displacing the first offer is difficult in Japanese practice, and you may simply lose the house.

So you face a real trade-off, and it is yours to make rather than ours to make for you:

Move fast without an inspection and you accept the condition risk that the seller has contracted out of.

Inspect first and you accept the risk that somebody else buys the property while you are doing it.

Neither answer is wrong. What is wrong is discovering the trade-off after you have already lost a house or already bought a bad one. Decide, before you start looking seriously, which of those two risks you would rather carry.

What the listing will not tell you

Everything above is on the page. The following usually is not, and each of them can change the value of a property substantially.

Whether the boundaries have been confirmed against neighbouring plots. Whether the house connects to mains sewerage or a septic tank. Whether the site is in a landslide caution zone or a flood depth zone. What the ground conditions are. Whether there is a known defect history. Whether the previous owner's belongings are still inside.

Some of this appears in the Important Matters Explanation before you sign — Chapter 8. Some of it has to be checked at the municipal office. Some of it only surfaces when someone stands in the building.

Which is why the listing is where you start, and never where you finish.

Next: Chapter 7 — What it really costs. The purchase price is not what you will spend.