Will Japan Tighten Regulations on Foreign Land Purchases?
Sanae Takaichi, the new LDP president, is also known as a strong supporter of such regulations.
As of October 13, 2025, the Japanese government is moving toward tightening restrictions on foreign ownership of land. According to a report by the Yomiuri Shimbun, the government is currently studying legal frameworks in countries such as Canada, Germany, South Korea, and Taiwan, and plans to use these findings as reference points when reviewing domestic laws.
The backdrop to this move is the Act on the Review and Regulation of Important Land Use, which took effect in 2022. The law requires prior notification for transactions involving land deemed critical to national security—such as areas around Self-Defense Forces facilities—but it does not prohibit purchases by foreign nationals outright. The government intends to use the law’s five-year review clause to consider stricter measures, drawing on foreign precedents, and potentially expand the scope of regulation to include residential, agricultural, and commercial real estate more broadly.
Policy Insights from Parliamentary Debates
Sanae Takaichi, the newly elected LDP president, is expected to become Japan’s first female prime minister during the extraordinary Diet session convening in mid-October.
Takaichi is well known as a proponent of restrictions on foreign acquisitions of real estate. Having previously served as a cabinet minister, she has repeatedly emphasized since 2011 the need for tighter controls on land purchases by foreign investors—for example, at the Lower House Budget Committee on January 31, 2023. At the same time, she has consistently pointed out that international commitments—particularly the WTO’s General Agreement on Trade in Services (GATS) and its “national treatment” obligation—pose a major legal barrier.
Because Japan did not secure any reservation under GATS regarding land transactions, it is in principle prohibited from enacting legislation that discriminates between Japanese and foreign buyers. As Takaichi stated in the Lower House Cabinet Committee on February 16, 2024:
“Unfortunately, due to past international commitments—particularly GATS—Japan is bound by the national treatment obligation, which prohibits discriminatory legislation in land acquisition as well as reciprocity-based measures.”
This underscores a deeply rooted recognition within the government: direct restrictions on foreign acquisition are legally difficult under international law. Therefore, any new regulations inspired by foreign case studies are likely to proceed along one of three possible tracks:
Expansion of use-based regulations: Extending the current land-use restrictions under the 2022 Act (which apply regardless of owner nationality) to cover general real estate, not just strategically important land.
Indirect regulation: Introducing heavier taxes, notification requirements, or screening mechanisms that target foreign individuals or corporations, while still avoiding conflicts with national treatment obligations. (Examples exist in Canada and South Korea, which impose special acquisition taxes.)
Laying the groundwork for treaty revisions: Deepening policy debate as a stepping stone for potential renegotiation of international commitments such as GATS, or for securing reservations related to land acquisition in future trade agreements.
Market Impact
Tighter regulation may slow speculative foreign investment in Japanese real estate, which has fueled sharp price increases in resort destinations such as Niseko, Hakuba, and Okinawa, as well as in certain prime urban commercial districts. However, given that direct acquisition bans are difficult under current law, the overall impact on market fundamentals—low interest rates, a weak yen, and domestic demand-supply dynamics—is expected to be limited.