In 2025, all members of the Dankai generation, born between 1947 and 1949, became late-stage elderly aged 75 or older. Do real estate owners fully understand how serious an impact this demographic turning point will have on Japan’s housing market? The vacant house issue is now entering a “new structural phase,” and with tighter legal requirements as well, inaction is no longer an acceptable option.
Why does the vacant house issue enter a new phase in 2026?
According to the Ministry of Internal Affairs and Communications’ 2023 Housing and Land Survey, the number of vacant houses across Japan stood at9.002 million units, and the vacancy rate reached13.8%. That means roughly one in every seven homes is vacant. This was an increase of 513,000 units from the 2018 survey, and that figure alone may convey the severity of the situation. However, the essence of the problem is that this trend “is only now set to accelerate in earnest.”
Starting in 2025, the pace at which members of the Dankai generation aged 75 and older give up owner-occupied homes because of moves into care facilities or death will accelerate to a degree not seen before. Many of those homes will be inherited but not put to use, and they will be absorbed into the nationwide stock of vacant houses. That mechanism is what will make the period after 2026 the true “era of rapidly increasing vacant houses.”
If more vacant houses emerge next to the properties owned by landowners and real estate owners, the effect will directly reach regional asset values as well. You also cannot remain detached from this issue, whether you will inherit property or pass it on. That is precisely why an accurate understanding of the current situation and concrete response measures are required now.
What reality do the data show about the rapid increase in vacant houses?
The shock of “9 million units” shown by the 2023 survey
The results of the 2023 Housing and Land Survey, published by the Ministry of Internal Affairs and Communications in 2024, once again confirm the weight of these numbers. Of the 9.002 million vacant houses, around 4.6 million are on the market for rental, sale, or similar circulation, while more than 3.85 million fall into the category of so-called “other vacant houses,” meaning deteriorated or neglected properties with limited prospects for reuse. These “other vacant houses” are exactly the type that threaten neighborhood safety, the streetscape, and asset values.
Even when looking only at Tokyo, vacant houses are a serious issue.However, urban areas still have more response options because demand remains. The most serious problem is that in rural areas and suburbs, regions where the vacancy rate already exceeds 20% are beginning to appear one after another.
Projections toward the 2040s: a future with a 25% vacancy rate
Private think tank projections point to an even harsher future. The Nomura Research Institute, in its June 2024 release, projected that by 2043 Japan’s overall vacancy rate will reachabout 25%. That would mean a society where one in every four homes is vacant.
According to estimates released by the Japan Research Institute in March 2025, “other vacant houses,” meaning deteriorated and neglected properties, will reachabout 6 million unitsby 2043, more than 1.5 times the current level. The basis for these projections is the rising number of deaths. From 2024 through the 2040s, the Dankai generation will drive a large wave of inheritance, transferring homes from the parent generation to the child generation. However, many in the child generation already have homes of their own. Family homes in rural areas and suburbs will therefore remain on the market as “homes with no one to take them on.”
Why is “the period after 2026” the dividing line? The aging of the Dankai generation and housing
A housing market moved by the Dankai generation
The total population of the Dankai generation is said to be about 8 million, and one defining characteristic of this generation is its high homeownership rate. This is the generation that acquired housing from the high-growth era through the bubble era, and it has a high proportion of owner-occupied housing, whether detached homes or condominiums.
Once people reach age 75 or older, cases in which they consider moving into care facilities because of physical reasons or family wishes increase sharply. Annual deaths in this age group also enter a rising phase. According to the Cabinet Office’s White Paper on the Aging Society 2025, the population aged 65 and older stood at about 36.19 million in 2025, and the aging rate reached a record high of 29.4%. Since 2025, when all members of the Dankai generation completed their shift into the late-stage elderly category, the impact on the housing market has continued to accumulate year by year.
How inheritance and the “vacant house chain” work
At the core of the issue is a mechanism in which inheritance occurs but vacant houses are not resolved. The child generation already owns homes in urban areas, so even if they inherit their parents’ homes in rural areas or suburbs, they cannot put them to use. They may want to sell but cannot get a price, want to rent but face no demand, and demolition also costs money. This “triple hardship with no exit” is what keeps inherited vacant houses piling up across the country.
Enforced in April 2024,mandatory inheritance registrationis directly related to this issue. As the Ministry of Justice explains in “Regarding the Mandatory Application for Inheritance Registration,” failure to file for registration within three years of the inheritance event can result in an administrative fine of up to 100,000 yen. Neglecting registration also creates the risk that the property will become “land with unknown ownership,” eventually leading to administrative execution or designation as a specified vacant house. Even those who inherit can no longer say, “I did not know.”
Tighter legal frameworks: what happens if a vacant house is left unattended?
Key points of the 2023 revision to the special measures law on vacant houses
In 2023, the Ministry of Land, Infrastructure, Transport and Tourism revised the “Act on Special Measures for the Promotion of Vacant House Countermeasures” (Reiwa 5, Law No. 50) and created a new category called“poorly managed vacant house”. This means that even before a property reaches the stage of a conventional “specified vacant house” with danger or collapse risks, an administratively identified house that is likely to become problematic if left as is can now be designated as a “poorly managed vacant house.”
If a property receives that designation, the residential land special treatment for fixed asset tax, which can reduce land tax to as little as one-sixth, is removed. In practical terms, fixed asset tax could jump to the equivalent of as much as six times the prior amount. For owners who assumed that leaving a property unused would not create costs, this is a major miscalculation.
How mandatory inheritance registration affects vacant house owners
With mandatory inheritance registration now in force, passively holding a vacant house on the basis that “I inherited it from my parents, but I do not plan to live there or sell it” has become a legal risk. Failure to register does not only expose owners to fines. If a property is left with unclear ownership on the register, municipalities may be unable to identify the responsible party even when they wish to issue a recommendation regarding a specified vacant house or a poorly managed vacant house, and the problem can drag on. If the matter eventually leads to administrative execution, those costs may also be billed to the heirs.
From the perspective of utilizing or investing in vacant houses, other possibilities are also opening up.However, even to consider utilization, the first prerequisite is to put the registration in proper order.
The reality of regional disparities: how do scenarios differ between urban areas and rural and suburban areas?
The vacant house issue is not “uniform nationwide.” Owners need to recognize that the scenario differs significantly by region.
Urban areas (the centers of major cities such as Tokyo, Osaka, and Nagoya)continue to attract population inflows, and housing demand is being maintained. Even when a vacant house appears, there is a high possibility that it can be brought back into circulation through either rental or sale, and proper management and renovation make it easier to preserve asset value.
By contrast,rural and suburban areasface a completely different situation. Under the double pressure of population decline and aging, rental demand is low and sale prices are trending downward. It has become a reality that even if someone tries to sell an inherited family home, no buyer appears, and even if the building is cleared, there is no demand for the land. Vacant houses in these areas carry the risk of becoming “negative assets” that generate nothing but ongoing management costs.
Accurately understanding the characteristics of the area in which an owner holds property, and formulating an early strategy based on those characteristics, is the first step in protecting assets.
Actions owners should take now
Action 1: Check the current condition of owned properties
The first step is to confirm whether any currently owned or expected inherited properties are at risk of falling under the category of a “poorly managed vacant house.” Please check whether regular inspections, cleaning, and repairs are being carried out, and whether visible deterioration such as overgrown weeds, damaged exterior walls, or accumulated flyers in the mailbox is progressing. Waiting until a recommendation arrives from the authorities is too late, and in some cases the removal of tax special treatment is applied retroactively.
Action 2: Move inheritance planning forward
If your parents in the Dankai generation are still alive, we recommend organizing your inheritance plan now. It is important, also in order to comply with mandatory inheritance registration, to clarify during their lifetime who will take over which real estate assets. There are multiple options, including drafting a will, using a family trust, and considering inter vivos gifts. Starting collaboration early with specialists such as judicial scriveners, tax accountants, and attorneys can significantly reduce later costs and disputes.
Action 3: Make an early decision on utilization or sale
A postponement strategy of “keeping it for now” is the riskiest choice in the context of the vacant house problem. Management costs accumulate, buildings age, and the tax burden may increase. Rather, making an early decision on whether to utilize the property through rental or renovation or to sell it, and then taking action, is what supports long-term asset preservation. Deciding to sell while market conditions are still favorable is also one strong option.
Action 4: Work with specialists and property management companies
For owners dealing with a distant family home or multiple properties,working with a reliable property management companyis a practical way to limit vacant house risk. Property management companies not only handle regular patrols and building upkeep, but also offer proposals for rental use and sale. Rather than carrying the burden alone, we recommend building a network of specialists and management companies early.
My view: seeing “2026” as a positive turning point
When I look at the challenge of rapidly increasing vacant houses, what I feel is both “crisis” and “an opportunity for reorganization.” The inefficiencies embedded in Japan’s housing stock, namely oversupply in areas without demand and a shortage of quality housing in areas with demand, are progressing at the same time, and everyone recognizes the need to correct this structural distortion.
That is exactly why owners who act now gain a first-mover advantage. Owners who decide on a sale or utilization before their property falls into poor management can move at an appropriate price. Those who respond too late, by contrast, will be forced to act after the market is flooded with properties, when their options have narrowed.
What we can provide at INA goes beyond simple management work. It is “hands-on support that protects owners’ assets from a long-term perspective.” We have built a system capable of providing concrete advice tailored to each owner’s circumstances, from inheritance planning to rental utilization and sale decisions. The “2026 problem” is, in fact, also an excellent time to reassess long-term asset building. I hope you will see now as the moment to take that first step.
Summary
- In 2025, all members of the Dankai generation completed their transition into the late-stage elderly category aged 75 and older, and from 2026 onward the number of inherited vacant houses entered a phase of accelerated growth
- As of 2023, there were 9.002 million vacant houses and a vacancy rate of 13.8% (Ministry of Internal Affairs and Communications, 2023 Housing and Land Survey). Nomura Research Institute projects the vacancy rate will reach about 25% in 2043
- The 2023 revision to the special measures law on vacant houses created the designation of “poorly managed vacant house,” making the risk of losing the residential land fixed asset tax special treatment a real one
- Because mandatory inheritance registration took effect in April 2024, filing for registration within three years of inheritance is now required, and leaving matters unattended carries the risks of fines and unknown ownership land
- The severity of the vacant house problem and the appropriate response differ greatly between urban areas and rural and suburban areas. A strategy suited to the characteristics of the area you own in is essential
- Letting a property sit idle is the greatest risk. Early decisions on utilization, sale, and inheritance planning, combined with specialist support, are the best way to protect assets
Frequently Asked Questions (FAQ)
Q1. If a property is designated as a “poorly managed vacant house,” how much will the tax burden increase in practical terms?
Residential land is subject to a special treatment that reduces the fixed asset tax assessment base to one-sixth for small residential land and one-third for general residential land. If a property is designated as a “poorly managed vacant house” and receives an official recommendation, that special treatment is removed. For example, fixed asset tax that had been 100,000 yen per year under the special treatment could rise to the equivalent of as much as 600,000 yen. The actual amount varies depending on the land area and assessed value, so we recommend confirming the details with your municipality or tax accountant.
Q2. Does mandatory inheritance registration also apply to properties where inheritance has already occurred?
Yes, it does. Even for properties where inheritance occurred before the April 2024 enforcement date, inheritance registration must be completed by March 31, 2027, during the transitional measures period. Properties that were left unregistered in the past are also covered, so we recommend confirming the situation and moving forward with the procedures without delay. For details, please refer to the Ministry of Justice website or consult a judicial scrivener.
Q3. I expect to inherit my family home in a rural area. What should I do if it cannot be sold?
Even if “selling is difficult,” there are several options. These include 1) registering the property with a municipal vacant house bank for sale or rental to people hoping to relocate, 2) converting it into rental housing through renovation, including consideration of subsidies for depopulated areas, 3) renouncing the inheritance, which requires careful judgment because it also means giving up other assets, and 4) donating it to the municipality or entrusting it to a vacant house management association. Each option has strengths and drawbacks, and the best answer depends on the condition of the property, its location, and the circumstances of the heirs. We recommend starting by consulting a specialist.
Q4. More vacant houses are appearing near the apartment building I own. What kind of impact should I expect?
An increase in nearby vacant houses puts downward pressure on asset values and rent levels across the entire area. In particular, vacant houses with visibly deteriorated exteriors undermine the sense among tenants that it is an area where they want to live. On the other hand, areas with many vacant houses are more likely to qualify for local revitalization subsidies, and in some cases redevelopment projects begin through cooperation with municipalities and government bodies. Rather than waiting to see what happens, it is important to keep gathering information in collaboration with management companies and local authorities.
Recommended reading
Citations and reference materials
- Ministry of Internal Affairs and Communications, “Results of the 2023 Housing and Land Survey”
- Ministry of Internal Affairs and Communications, “Preliminary Tabulation Results of the 2023 Housing and Land Survey (Press Release)”
- Cabinet Office, “White Paper on the Aging Society 2025 (Current State and Future Outlook of Aging)”
- Ministry of Land, Infrastructure, Transport and Tourism, “Partial Revision of the Act on Special Measures for the Promotion of Vacant House Countermeasures (Reiwa 5, Law No. 50)”
- Nomura Research Institute, “New housing starts in fiscal 2040 will decline to 580,000 units, and the vacancy rate in 2043 is expected to rise to about 25%” (June 13, 2024)
- Japan Research Institute, “Estimates of the Number of Vacant Houses and Vacancy Rates Nationwide and by Prefecture in the 2040s” (March 28, 2025)
- Ministry of Justice, “Regarding the Mandatory Application for Inheritance Registration”https://www.moj.go.jp/MINJI/minji05_00599.html
