Many people inherit rural land from their parents but consider disposing of it because they are unsure how to make use of it. If left unattended, property taxes continue to accumulate, and management costs also increase. This article comprehensively explains practical ways to dispose of inherited rural land you no longer need.
Why should you not leave unwanted land unattended?
Leaving unwanted land unattended offers owners little but disadvantages. The ongoing burden of property taxes, the cost of maintenance, and the possibility of liability for damages caused by collapse risks all become more serious over time.
You still need to keep paying property tax
Even if real estate is not being used, property tax is charged every year. Rural land may have a low assessed value, so the tax may not seem high, but over a long period it can become a significant burden. For vacant land, the special residential land tax treatment does not apply, so careful attention is required.
Management work and costs will arise
Proper management requires pruning trees and cutting weeds. If you live far away, outsourcing costs to a contractor will also arise. If a building remains on the property, you will also need to keep paying the base utility charges for electricity and water.
There is also a risk of collapse or landslides
For land located on cliffs or slopes, the owner may be held liable for damages if a landslide causes loss. The risk of injuries caused by the collapse of a vacant house should not be overlooked either.
What are the practical ways to dispose of rural land?
There are several options for disposing of land, and it is important to choose the method that fits your situation. Below is a summary of the main approaches.
Renouncing the inheritance
If the inheritance procedures have not yet been completed, you can renounce the inheritance itself. However, please note that you must renounce the entire inheritance, not just the unwanted land. The procedure must be completed within three months of learning of the inheritance, and ownership will pass to the other heirs or the state.
Selling the land
It can be difficult to find a buyer for rural land, but approaching the owners of adjacent land can be effective. A reliable approach is to sign a brokerage agreement with a real estate company and proceed with negotiations.
Registering with a vacant house bank
Vacant house banks operated by local governments can be used to match unsold land with potential buyers. Registration is free, and because you can work with a real estate company partnered with the municipality, more efficient disposal may be possible.
Donation or transfer
Donating the land to a local government or transferring it to an individual or corporation is another option. You will not receive money through a donation, but you can be released from ongoing holding costs. In the case of a transfer, it is wise to agree in advance on who will bear costs such as gift tax, stamp duty, and registration and license tax.
Leasing out the land
Leasing out the land can reduce maintenance costs while providing a stable source of income. If your goal is to let it go, choosing an ordinary land lease right may mean the land will effectively never return to you, making it a practical form of disposal. Before leasing, confirm local market conditions with a professional.
Frequently Asked Questions (FAQ)
Q. How much is the property tax on rural land?
It depends on the assessed value, but several thousand to several tens of thousands of yen per year is common. However, for vacant land, the residential land tax reduction does not apply, so it may be more expensive than land with a building on it.
Q. If I renounce an inheritance, do I also have to give up other assets?
Yes. Renouncing an inheritance applies to the entire estate. You cannot renounce only the land.
Q. Does it cost money to register with a vacant house bank?
Registration itself is free. Because it is operated by a local government, efficient matching can be expected without a profit motive.
Q. What is the last resort if the land cannot be sold to anyone?
Donating it to a local government is the last resort. Consider it after making sufficient efforts to sell and being unable to find a buyer.
