Land ownership riddles in ageing Japan come at a cost, stifle economy
20/12/2017 09:58
* Land owner record absent in about 10 pct of Japan's land
* Registration of ownership not mandatory, costly for many
* Split of ownership due to inheritance major reason
* Problem seen hurting economy but limited steps taken so
far
By Hideyuki Sano
TOKYO, Dec 20 (Reuters) - When Sparx Green Energy &
Technology, a renewable energy firm, found an ideal plot of land
on which to build a solar panel factory in Japan, there was a
catch. The three people on public record as the owners of the
land had died years ago.
What followed was a protracted search for the dead owners'
descendents to find the legal heirs of the land, about the size
of a football field. The company found that the number of people
who could lay claim to the plot had mushroomed to more than a
hundred.
At that point, the unit of Sparx Group 8739.T , changed
plans and looked for land elsewhere to avoid having to conduct
separate, potentially expensive and time consuming, negotiations
with so many people.
Registration of land ownership is not compulsory in Japan
but the lack of up-to-date ownership records is an increasing
problem. More than a tenth of the country's land mass, or an
area the size of Holland, has no up to date record of ownership.
A research group at the National Land Planning Association
estimates the problem will cost the economy 6 trillion yen ($53
billion) by 2040 based on the cost of maintaining abandoned land
and the value the land could bring if it was put to productive
use.
The government is responding. Earlier this month it said it
plans to introduce legislation next year to make it easier for
public works to be carried out on vacant land when it is
difficult to determine ownership.
Such land plots were a major obstacle for reconstruction
efforts after the 2011 tsunami and experts warn it could stifle
any recovery efforts should Japan suffer another major natural
disaster in the future.
"I believe we can inherit land in a real sense only by using
it. If you can't tell who owns where in a country with limited
land, it's as if you were abandoning the country's precious
assets," said Takahide Taniwaki, president of Sparx Green
Energy.
Many land owners do not bother to register because it is not
mandatory.
Shoko Yoshihara, research fellow at the Tokyo Foundation who
has written a book about the issue, said under current
regulations there is no disadvantage for owners if they do not
register their interest, while at the same time, there is a
cost. Registration comes with at least a 0.4 percent tax on the
value of the land, plus any legal or notary fees.
DEMOGRAPHIC TIPPING POINT
Until recently, the lack of accurate records of land
ownership had attracted scant public attention.
But legal notaries, private sector researchers and local
government officials say the problem of tracking down owners is
only going to get more difficult as the baby boom generation
die, often leaving several siblings and children.
Mass migration into big cities by the baby boom generation
and their children during Japan's rapid industrialisation, will
also complicate efforts to track down descendents.
A pensioner in his sixties, who identifies himself as Y.K.,
said he came to learn recently from a note left by his aunt when
she died that his parents owned land in a forest in Kyushu,
Western Japan, about 1,000 kilometres (625 miles) away from his
current home.
Although he initially wanted to report his inheritance he
decided not to, he said, because doing so came at a cost and no
benefit.
"I went there to check the land but the place seemed
useless. It was even hard to tell exactly where it is because
there was no picket or anything that shows the border. I asked a
local real estate agent whether they wanted it but they said
they didn't want it either," he said.
"I don't need it. I just wish the local government would
take it," he said.
And while the issue has been seen as mostly confined to
rural areas with low economic value, there are cases that are
too late to untangle even in big cities.
A houseowner in the Tokyo suburb of Fuchu decided not to try
to register as the owner of the house he lives in after he found
that the registered owner was his great grandfather, who was
born in the middle of the 19th century. That meant that now
there were about 50 descendents who could claim ownership, said
a legal notary, who requested anonymity to protect the
confidentiality of his clients.
"If you are talking about 10 to 15 people having ownership,
you can cope. But if you have 50 people having a claim, it's
just impossible to get agreement from all of them," he said.
"Even though they are relatives on paper, they don't know
each other. And I suspect most of them don't even know they have
a piece of ownership," he said.
(Reporting by Hideyuki Sano; Editing by Neil Fullick)
((hideyuki.sano@thomsonreuters.com; +81 3 6441 1827; Reuters
Messaging: hideyuki.sano.thomsonreuters.com@reuters.net))
Keywords: JAPAN PROPERTY/IDLELAND