In recent years, there has been an increase in the number of opportunities to hear the term " zero yen property" in the real estate market. As the phrase "nothing is more expensive than free" suggests, there are risks and precautions associated with "zero yen properties" that are not apparent on the surface.
As INA&Associates, we have been involved in many real estate transactions, and I can tell you from experience that zero yen properties can be a very effective option if you have the proper knowledge and preparation. However, jumping in too easily may result in more cost and hassle than expected.
This article provides a detailed explanation of the reality of 0 yen properties and how they can be used for those who are considering using budget properties orvacant houses, or who are thinking of living in the countryside ormoving to a rural area. We hope you will gain a proper understanding of the potential of 0 yen properties as a new real estate investment option and as a means of increasing asset value through renovation.
A 0 yen property is a real estate property in which the land or building is transferred free of charge. Officially called "free transfer properties," these properties are traded at a sales price of zero yen. These properties are often properties with special circumstances that make them difficult to circulate in the regular real estate market, and are mainly vacant houses or buildings that are no longer in use.
Many of the ¥0 properties are located in rural areas far from urban areas and are concentrated in areas affected by population decline and depopulation. These properties have become difficult for their owners to maintain and manage or have become a financial burden for them, resulting in a situation where they are willing to give them up even for free.
Behind the creation of 0 yen properties lies a serious social problem facing Japan. First, as a reverse phenomenon of rural migration, the outflow of young people to urban areas is continuing, and demand for old houses and residences in rural areas is declining significantly.
According to the Basic Resident Ledger Population Movement Report of the Ministry of Internal Affairs and Communications, there continues to be an excess of people moving into the Tokyo area, and the population decline in rural areas has not been halted. As a result, an increasing number of owners are unable to utilize their family homes and land acquired through inheritance.
In addition, due to the declining birthrate and aging population, more and more elderly people are moving into nursing homes or leaving their familiar homes to live with their children. The combination of these factors has resulted in an ongoing increase in the number of unmanaged vacant homes across the country.
Furthermore, the financial burden of owning real estate, including property taxes, city planning taxes, and maintenance and management costs, is another major reason for choosing a zero yen transfer. Especially for heirs living far away, regular management and repairs are impractical, and a situation where only taxes are incurred on an ongoing basis is a significant burden.
Actual examples of zero yen properties are often found in rural areas such as Nagano, Hokkaido, and Fukushima prefectures. Specialized matching websites list many wooden houses more than 30 years old and properties located far from stations.
Many of these properties have deteriorating buildings and require substantial renovation costs to live in as is. However, since the land cost is free, the price may be lower than that of a regular real estate purchase, even if renovation costs are included.
The biggest advantage of a zero yen property is that the initial cost can be significantly reduced. In a normal real estate purchase, about 7-10% of the property price is required as miscellaneous expenses in addition to the property price. For example, when purchasing a 10 million yen property, 700,000-1,000,000 yen is required just for various expenses.
However, in the case of a zero yen property, since the property price is zero, only minimal expenses such as registration fees and taxes are required. This allows the floating funds to be used for renovation or repair work, making it possible to create a living environment to one's liking.
Especially for those who are considering investing in real estate, being able to reduce the initial investment amount is a great advantage. The payback period may be shortened when utilizing the property as a rental property or operating it as an accommodation facility after renovation.
Zero yen properties can be an ideal option for those considering rural living oremigration to a rural area. It is attracting attention as a means for young people who have difficulty purchasing housing in urban areas or those who wish to spend their second life in the countryside after retirement, to emigrate while reducing their financial burden.
By taking advantage of the Zero Yen Property, these advantages can be enjoyed while reducing the financial burden.
In addition, as the spread of remote work has made it possible to work without being tied to a specific location, living in a rural area has become a more realistic option. 0 yen properties can be renovated to provide an ideal working environment by securing a workspace.
One of the major advantages of acquiring a 0 yen property is the possibility of taking advantage of various subsidies and grants from local governments. Many municipalities have support programs for immigrants and for the use of vacant houses as part of their efforts to combat population decline and revitalize local communities.
| Types of subsidies | Approximate amount of grant | Main conditions |
|---|---|---|
| Migration subsidy | 500,000 yen to 2 million yen | Obligation to reside for a certain period of time |
| Housing repair subsidy | 1 million yen to 5 million yen | Earthquake resistance, heat insulation, etc. |
| Subsidy for starting a business | 1 million yen to 3 million yen | Starting a business in the community |
| Childcare support grant | 100,000 - 1,000,000 yen | Depends on the age and number of children |
These subsidies may significantly reduce the cost of renovating a zero-key property. However, certain conditions and procedures are required to apply for subsidies, and it is important to confirm with the local government in advance.
Another major advantage of zero yen properties is the high degree of freedom in renovations. In the purchase of an ordinary used property, the renovation budget is often limited due to the high purchase price. However, with a zero yen property, there is no property acquisition cost, so there is sufficient budget for renovations.
In the case of old private homes, modern facilities can be introduced while utilizing traditional architectural techniques to create living spaces with unique charm. In addition, by changing the use of the property, other uses besides housing can be considered. For example, a café, guesthouse, atelier, or other business development that takes advantage of local characteristics is also possible.
Furthermore, environmentally friendly renovations can be made to create a sustainable living environment. Long-term reduction of utility costs can also be expected by installing solar power generation systems and improving insulation performance.
The most important point to note when considering a zero yen property is the existence of "hidden costs" that are not visible on the surface. Even if the property price is 0 yen, various costs will be incurred before you can actually live in the property.
First, there are costs related to legal procedures, such as gift tax, real estate acquisition tax, and registration and license tax. These taxes are calculated based on the assessed value of the property, so even if the property is acquired for zero yen, a certain tax burden will be incurred.
| Types of Taxes | Calculation Method | Reduction |
|---|---|---|
| Gift tax | (Appraised value - 1.1 million yen) x tax rate | Basic deduction 1,100,000 yen |
| Real estate acquisition tax | Appraised value x 3 | Reduction available for new and used houses |
| Registration and license tax | 0.4% of assessed value | Reduction available for residential houses |
| Fixed property tax | Assessed value x 1.4 | Reduction is available for residential property. |
In addition, depending on the condition of the building, major renovation work may be required. It is not uncommon for older properties to require several million yen in work, such as seismic reinforcement, repairs to roofs and exterior walls, and updating of water supply and drainage systems.
Many zero yen properties are located in locations with inconvenient transportation access. The majority of properties are located 30 minutes or more by car from the nearest train station or in areas with limited public transportation.
Such locations pose a variety of constraints in daily life. Things that can be taken for granted in urban areas, such as shopping, access to medical facilities, and children's commuting to school, can become difficult. This can have a significant impact on quality of life, especially for elderly people who cannot drive or for households that do not own a car.
In addition, if one wishes to sell a property in the future, the poor location of the property can be a major handicap. Due to limited demand, the possibility of not being able to recoup the costs invested in renovations should also be considered.
Acquiring a zero-cost property also entails legal risks. One of the most serious risks is safety issues due to aging buildings. For properties that may be designated as Specified Vacant Houses, there are concerns about the risk of collapse and negative impact on the surrounding area.
In the unlikely event that the building collapses or a member falls and causes damage to a third party, you, as the owner, will be liable for damages. To avoid such risks, building diagnosis before acquisition and proper maintenance after acquisition are essential.
In addition, many zero yen properties are transferred under the condition that the previous owner is not liable for defects. This means that the new owner must deal with all building defects, soil contamination, and other problems discovered after acquisition.
The procedure for acquiring a zero yen property can be more complicated than a regular real estate transaction. Since many zero yen properties are private transactions that do not involve a real estate company, the parties involved must handle everything from the preparation of the contract to the registration process.
For the average person unfamiliar with real estate transactions, these procedures can be a significant burden. If there is a deficiency in the procedures, it may lead to problems later on, so it is important to consider requesting a specialist such as a judicial scrivener.
However, there is a cost involved in requesting a specialist, which may offset the benefit of a zero yen property. Careful consideration should be given to the balance between procedural costs and professional fees.
Vacant house banks are the most common and reliable way to find 0 yen properties. Vacant house banks operated by local governments throughout Japan systematically organize information on vacant houses in the community, some of which are offered for 0 yen.
Using a vacant house bank is relatively simple. First, access the website of the municipality in the area you wish to move to and register for the vacant house bank. After registering, check the regularly updated property information and contact the local government official if you find a property you are interested in.
A well-known nationwide version of a vacant house bank is the "At Home Vacant House Bank," a convenient service that allows you to search information from multiple municipalities at once. By narrowing down your search by region, you can efficiently find properties that match your desired conditions.
One thing to keep in mind when using the At Home Vacant House Bank is that the information posted may not be up-to-date. If you find a property you are interested in, it is important to contact the local government as soon as possible to confirm the current status.
In recent years, matching sites specializing in 0 yen properties have appeared. These sites aggregate information on 0 yen properties from all over Japan and provide detailed information and photos of the properties.
The advantage of specialized sites is that they specialize in 0 yen properties, allowing users to search for properties efficiently. In addition, they often provide detailed information on the condition of the property and the need for renovations, which is useful as a preliminary consideration.
However, these sites do not provide brokerage services, so actual negotiations and procedures must be conducted between the parties concerned. It is important to note that the sites only provide a place for matching, and you are responsible for the safety of the transaction.
Many local governments have established immigration support programs as part of their measures to combat population decline, which may include the provision of zero yen properties. These programs do not merely provide properties, but also offer comprehensive support that includes lifestyle and employment assistance after migration.
| Name of municipality | Details of support | Conditions |
|---|---|---|
| Komoro City, Nagano Prefecture | Free housing + renovation assistance | Obligation to live in the house for more than 5 years |
| Yubari City, Hokkaido | Land provided free of charge | Obligation to build a house |
| Ounan Town, Shimane Prefecture | Free rental of old houses | Participation in local activities |
| Kamiyama Town, Tokushima Prefecture | Assistance for renovation of vacant houses | Conditions for Starting a Business or Working |
In general, there are conditions for using these programs, such as the obligation to reside in the area for a certain period of time and to participate in local activities. However, if you can clear the conditions, you will receive support not only in acquiring a property but also in all aspects of your life, thus increasing your chances of success in immigrating to the region.
The procedure for acquiring a 0 yen property proceeds as follows.
Confirmation of property details and site inspection
First, detailed information on the property is confirmed and a site visit is made to the extent possible. It is important to directly confirm the condition of the building, surrounding environment, and infrastructure.
2. Negotiation with the owner
If we are interested in a property, we will negotiate with the owner or the intermediary municipality. We will confirm in detail the conditions of transfer, restrictions on renovations, and future use restrictions.
3. Preparation of contract
A transfer agreement will be drafted; in the case of a zero-value property, this will generally be a gift agreement. The contract should clearly state the details of the property, conditions of transfer, and responsibilities.
4. Various Procedures and Tax Declaration
After the contract is concluded, registration procedures are carried out. In addition, if a gift tax return is required, a tax return will be filed with the tax office.
The following documents are required
Considering the complexity of the procedure, it is strongly recommended to request a specialist such as a judicial scrivener or administrative scrivener. Although professional fees will be incurred, considering the certainty of the procedures and the time saved, it is a well worthwhile investment.
When utilizing a zero yen property as a residence, the most important thing is to develop a renovation plan. It is necessary to achieve both safety and comfort within a limited budget.
One successful case study is the acquisition of an old private house in Nagano Prefecture and its renovation to create a modern living environment. In this case, the structural part of the house was reinforced as the first priority, followed by interior and facility updates in stages.
It is important to proceed with the renovation in the following order of priority
By proceeding with renovations according to this order of priority, a safe and comfortable living environment can be efficiently realized.
Zero yen properties have great potential for business use. The initial investment can be kept to a minimum, allowing you to take on new business challenges while minimizing risk.
In the case of the guesthouse business, an old private house in a rural area is renovated and operated as an accommodation facility for tourists from urban areas and people who are considering moving to the area. In this case, the historical value of the building is utilized while modern facilities are introduced, resulting in a successful lodging facility with a unique charm.
There is also a growing number of cases where the buildings are being used as cafes and restaurants. By offering cuisine that makes use of rich local ingredients, they are contributing to the promotion of local attractions and economic revitalization.
When utilizing a zero yen property from a real estate investment perspective, the main source of income is rental operation after renovation. Even in rural areas, it is possible to generate stable rental income through appropriate renovation and management.
The key points for a successful investment are as follows
In particular, by equipping the property for remote work, rental operations can be targeted to urban migrants and long-term residents.
Zero yen properties can be a very effective option with proper knowledge and preparation. However, it is important not to be misled by the term "0 yen," but to carefully consider the overall cost and effort involved.
Key Points of Benefit:
Main points of disadvantages:
In order to successfully utilize a zero-cost property, it is recommended that the following action guidelines be followed
1. Sufficient preliminary research
Conduct a thorough investigation of the property's condition, surrounding environment, and legal constraints. It is important to visit the site whenever possible and have a professional building diagnosis.
2. Comprehensive cost calculation
Comprehensive costs are calculated, including not only property acquisition costs, but also renovation costs, taxes, and maintenance and management costs. It is necessary to have a generous budget in order to prepare for unexpected costs.
3. Use of specialists
It is strongly recommended to seek professional advice on legal procedures and building diagnosis. Although initial costs will be incurred, the possibility of avoiding problems later on will be increased.
4. Phased renovation plan
Instead of undertaking all renovations at once, risks can be spread out by clarifying priorities and proceeding in phases.
If you are interested in a 0 yen property, we recommend starting with the following steps
INA&Associates offers consulting services on real estate investment andrural immigration; if you would like a more detailed consultation on how to take advantage of 0 yen properties, please feel free to contact us. With the right knowledge and strategy, zero yen properties can be a powerful tool to achieve your ideal living environment and investment goals.
A1:Although the property price is 0 yen, it is not completely free. Taxes such as gift tax, real estate acquisition tax, and registration and license tax will be incurred. In addition, the cost of requesting registration to a judicial scrivener and the cost of building improvements are also required. It is important to calculate in advance the overall cost, including expenses other than the property price.
A2:Many zero yen properties are older than 30 years old and may be considerably dilapidated. It is not uncommon to find damage to roofs and exterior walls, aging water supply and drainage systems, and termite damage. Therefore, it is necessary to diagnose the building prior to acquisition and to consider the possibility of major renovations after acquisition.
A3:Legally, it is possible, but not practical; properties transferred for zero yen have low market value and it is difficult to find a buyer without renovation. In addition, the municipality's system may impose an obligation to reside in the property for a certain period of time. We do not recommend acquiring a property for the purpose of short-term resale.
A4:Zero yen properties in urban areas are very rare; the majority of zero yen properties are concentrated in rural, underpopulated areas, usually in locations with inconvenient transportation access. If you find a zero-yen property in an urban area, it is highly likely that it has some serious problems, so you should be especially careful in your investigation.
A5:Many municipalities have subsidy programs to promote immigration and the utilization of vacant houses. You may be able to take advantage of programs that subsidize part of the renovation costs or support grants for immigrants. However, it is important to confirm the details of the subsidies in advance with the local government department in charge, as there are application conditions and restrictions on the use of the subsidies.