When you inherit a vacant house ― the cost of leaving it, the 2023 \"poorly managed vacant house\" category, handing land to the state, and the 30,000,000 yen deduction

For anyone who has inherited a family home that nobody lives in. How leaving it can multiply the fixed asset tax by up to six (specified vacant houses and poorly managed vacant houses), the duty of preservation that remains even if you renounce the inheritance, the system for transferring inherited land to the state that you can use once the building is demolished, and the 30,000,000 yen special deduction you will want to use if you sell. This article sets out the options together with their deadlines.

About this translation ― This page is an English translation of an article originally written in Japanese by KuraLab's operator, a licensed real-estate transaction specialist (宅地建物取引士) and administrative scrivener (行政書士) in Japan. The Japanese original is the authoritative text; where the two differ, the Japanese version prevails. The article explains Japanese law and procedure in general terms as of the date shown. It is not legal, tax or immigration advice for your situation ― please confirm with a licensed professional in Japan. Japanese terms are kept in parentheses so you can search for them. Read the Japanese original

A man came in carrying an envelope from the city office. Inside was a notice of "guidance concerning a poorly managed vacant house." The trees in the garden of his family home had grown over onto the neighbour's land, and a gutter had come loose and fallen into the car park next door. Four years had passed since his father died, and nobody had lived in the house since. "I hear that if they issue a recommendation, the fixed asset tax goes up six times." The fixed asset tax on the land of the family home was 38,000 yen a year. If a recommendation removed the residential land special rule, in the worst case it would be about 230,000 yen (there are adjustments so that it does not rise too sharply all at once, so in practice it often does not go up the full six times). This article is the story of a house that, by the time of that envelope, had passed the end of the third year.

A parent dies and leaves a family home that nobody lives in. This is the pattern growing fastest in inheritance consultations. "I'll think about it some time" lets several years go by, the roof deteriorates, the garden trees grow over next door, and a letter comes from the municipal office. Here I set out the systems that anyone who inherits a vacant house should know about, and the deadline for each option.

First, the cost of leaving it. Land with a house on it has its fixed asset tax reduced by up to one sixth under the "residential land special rule" (住宅用地の特例). If, under the Act on Special Measures concerning Vacant Houses (空家等対策特別措置法), the municipality judges a house to be a "specified vacant house" (特定空家: at risk of collapse, seriously harmful to hygiene, seriously spoiling the landscape and so on) and issues a recommendation for improvement, this special rule is removed. That is the mechanism behind "the fixed asset tax on the land goes up as much as six times." If the recommendation is not followed, an order follows, and then demolition by administrative execution, with the cost charged to the owner.

How the rules on vacant houses have changed. May 2015: the Act on Special Measures concerning Vacant Houses came fully into force (a recommendation for a specified vacant house removes the residential land special rule). April 2023: the system for transferring inherited land to the state began (land without buildings can go to the state after screening and a charge). December 2023: the poorly managed vacant house category was created (even short of a specified vacant house, a recommendation removes the special rule).

The amendment of December 2023 created a category one step short of a specified vacant house: the "poorly managed vacant house" (管理不全空家). It means a house in a state that, if left alone, is likely to become a specified vacant house, such as broken windows or overgrown weeds. The municipality gives guidance; if things are not improved, it issues a recommendation, and at the point of the recommendation the residential land special rule is removed. Think of it as meaning that "it's fine because it isn't about to fall down yet" no longer works.

I am often asked whether renouncing the inheritance gets you out of it. As described in the article on renunciation of inheritance, even after renouncing, a person who is actually in possession of the house at that point keeps a duty of preservation until they hand it over to the next person who takes it on. If nobody takes it on, an application to the family court to appoint an estate liquidator (相続財産清算人) is needed, and the deposit for that can be from several hundred thousand yen to around a million yen. Renunciation is a way of "giving up everything, debts included," not a way of "throwing away just the house."

As a way of letting go of land you do not plan to use, the "system for transferring inherited land to the national treasury" (相続土地国庫帰属制度) began in April 2023. It lets you have inherited land taken over by the state after screening. But the conditions are strict, and land with a building on it is excluded, so a vacant house has to be demolished first. In addition, land with unclear boundaries, cliffs, soil contamination or a mortgage on it is not accepted. The cost is a screening fee of 14,000 yen per parcel and, if approved, a charge of 200,000 yen in principle (it varies with the type and area of the land). Together with the demolition cost, it often comes to the order of a million yen, but you weigh it against "bearing fixed asset tax and management responsibility for ever."

If you sell, the thing I want you to check without fail is the "special deduction from capital gains on the deceased's residential property (vacant house)." If you inherit and sell a house that the deceased lived in alone, up to 30,000,000 yen can be deducted from the capital gains. The main requirements are: the house was built on or before 31 May 1981; you sell by 31 December of the third year after inheritance began; the sale price is 100,000,000 yen or less; and at the time of sale it meets earthquake-resistance standards or is demolished (from 2024, it is also acceptable if the buyer does this by 15 February of the following year). It applies to sales up to 31 December 2027 (as of September 2026). If there are three or more heirs, it becomes 20,000,000 yen per person. The older the family home, the more likely it is to qualify, and it is a special rule that can make a difference of millions of yen in tax, so check with a tax accountant or the tax office before selling.

Laid out, there are four options. You or your family use it. You rent it out (registering it with the local authority's vacant house bank is another possibility). You sell it (with the special deduction if by the end of the third year). You demolish it and keep only the land, or have the state take it. Whichever you choose, inheritance registration has to be completed first. While the name is still the deceased's, you can neither sell, nor rent out, nor apply for transfer to the state.

The four options after inheriting a vacant house, and their deadlines (as of September 2026). Use it yourself or within the family: inheritance registration and renovation costs; inheritance registration within three years. Rent it out: inheritance registration and use of a vacant house bank or an agent; same deadline. Sell it: the 30,000,000 yen special deduction requires a building from May 1981 or earlier, a price of 100,000,000 yen or less, and earthquake-proofing or demolition; by the end of the third year from the start of inheritance (applies to sales up to the end of 2027). Demolish it and have the state take the land: demolition cost + screening fee of 14,000 yen per parcel + a charge of 200,000 yen in principle; no deadline in the system, but fixed asset tax is charged every year.

The figures as I worked them out in the case. Four years since the father's death, inheritance registration not yet done, still in the father's name. The heirs were two: the man and his elder sister. The end of the third year had passed, so the 30,000,000 yen special deduction for vacant houses could not be used. The house was built in 1975 and met the first requirement (on or before 31 May 1981). Had it been sold in time, the capital gain would have been the sale price of 14,000,000 yen less the acquisition cost (unknown, so 5%, 700,000 yen) and the selling costs, about 12,800,000 yen; with the deduction the tax would be zero, and without it about 20%, about 2,560,000 yen. Passing the end of the third year by a year made a difference of 2,560,000 yen.

The first thing we did was respond to the guidance. Pruning the trees and removing the gutter was done by a contractor for 80,000 yen. The man reported the improvement to the city office, and it never reached a recommendation. If a recommendation had been issued, the special rule would have gone, and 38,000 yen a year would have become about 230,000 yen. If 80,000 yen can stop that, you stop it. Next, inheritance registration. The man and his sister agreed that he would take the property, and he completed the registration himself. The registration and licence tax (登録免許税) was 0.4% of the combined valuation of land and building, 5,200,000 yen, so 20,800 yen. With the registration done, the options of selling, renting or demolishing could finally be put in motion.

The choice was to sell. The special deduction could not be used, so expecting about 2,560,000 yen in tax, he sold for 14,000,000 yen, and after the brokerage fee and the tax, the proceeds were about 10,900,000 yen. Half each with his sister. The idea of demolishing and keeping just the land was rejected: demolishing a two-storey wooden house would cost about 1,500,000 yen, and after that the fixed asset tax without the special rule would go on at about 230,000 yen a year. Transfer to the state would mean demolishing the building and then paying the screening fee of 14,000 yen and the charge of 200,000 yen, about 1,700,000 yen with the demolition, to let it go, and for land that can be sold there is no reason to choose it. Of the four options, for this house "sell" was the one left.

Selling the family home (built 1975) for 14,000,000 yen: how it changes depending on whether it was sold by the end of the third year (this article's example). Capital gain (sale price 14,000,000 yen − acquisition cost 700,000 yen − selling costs about 500,000 yen): about 12,800,000 yen in either case. The 30,000,000 yen special deduction for vacant houses: usable by the end of the third year, so taxable income 0; not usable in the fourth year (this house). Income tax and residence tax (about 20%): 0 yen by the end of the third year; about 2,560,000 yen in the fourth year. Proceeds (after the brokerage fee of about 520,000 yen): about 13,500,000 yen by the end of the third year; about 10,900,000 yen in the fourth year.

The first thing I say in a consultation is: write "the end of the third year" in your diary. The duty of inheritance registration and the special deduction for vacant houses both have deadlines three years from the inheritance. Pass them, and the moves you can choose get fewer and only the costs remain.

The man who came with the envelope paid 80,000 yen to respond to the guidance, 20,800 yen for the registration, and, as the price of passing the end of the third year, about 2,560,000 yen in tax. I wrote "write the end of the third year in your diary" at the end of the main text because of this 2,560,000 yen. All I could say to someone who came in the fourth year was: do not let it become the fifth.

Written by: 長澤湊（licensed real-estate transaction specialist, administrative scrivener, assistant surveyor）　Content checked on: 2026-10-24

This article is a general explanation of Japanese rules and procedures, not advice on an individual case. Figures and rules are as of the date shown. For your own situation, consult a lawyer, judicial scrivener, tax accountant or administrative scrivener in Japan.

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When you inherit a vacant house ― the cost of leaving it, the 2023 \"poorly managed vacant house\" category, handing land to the state, and the 30,000,000 yen deduction

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