After a parent passes away, it is not uncommon for the ownership change for land or a building to be left unattended. However,in April 2021, the mandatory registration of inherited property was decided, and if it is left unattended without a valid reason, there is a risk of a fine of up to 100,000 yen.This article explains the specific risks of not changing the registered ownership and the procedural flow for carrying out the inheritance smoothly.
What happens to real estate after a parent passes away?
Real estate after a parent passes away becomes part of the estate and is inherited by the heirs.If the ownership is not changed, the property cannot be sold, rented out, or used as collateral at all.Due to the legal amendment, registration became mandatory within three years from the day you became aware that the inheritance had occurred.
What are the risks of not changing the registered ownership of real estate?
① Penalties may be imposed
If registration is not completed within three years from the day you became aware that the inheritance had occurred, you may be subject to a fine of up to 100,000 yen.If filing is difficult, please use the heir declaration registration system.
② Rights relationships become more complicated
If another inheritance occurs before registration is completed, it becomes difficult to identify who holds the rights.An unregistered status spanning two or three generations requires an enormous volume of documents at the time of inheritance.
③ It creates a burden for the next generation
If you pass away while the property remains unregistered, your children will need to carry out registration procedures for two generations at the same time. The required documents also increase substantially, doubling the burden.
④ It cannot be used as collateral
Financial institutions can create collateral only for the owner listed in the registry.As a result, real estate for which the ownership change has not been completed cannot be used as loan collateral, limiting how the asset can be utilized.
What is the process for inheriting real estate registered in a parent's name?
Step 1: Confirm the estate and the heirs
Identify the estate as a whole, including not only real estate but also deposits, stocks, and liabilities.Do not open a will on your own; a probate procedure at the family court is required.
Step 2: Discuss and agree on estate division
If there are multiple heirs, they decide through discussion how the property will be divided (sale and cash distribution, compensation, or co-ownership). Putting the agreement in writing gives it legal effect.
Step 3: Change the registered ownership (inheritance registration)
Submit the registration application to the Legal Affairs Bureau. Required documents include family register transcripts for all heirs, seal registration certificates, residence certificates, the deceased person's family register transcript, and a fixed asset tax valuation certificate.To ensure the procedure is handled accurately, it is common to ask a judicial scrivener to assist.
Step 4: File and pay inheritance tax
The deadline for filing inheritance tax is within 10 months from the date of the decedent's death.If the deadline is missed, additional tax and delinquency tax will be imposed. Early consultation with a tax accountant is recommended.
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Frequently Asked Questions (FAQ)
Q. When did inheritance registration become mandatory?
The requirement took effect on April 1, 2024. It also applies to properties that had remained unregistered from the past.
Q. What should I do if I cannot complete registration within three years?
By using the heir declaration registration system, the obligation is regarded as temporarily fulfilled. Please consult the Legal Affairs Bureau for details.
Q. Is registration still necessary even if inheritance tax does not apply?
Yes. Inheritance tax and inheritance registration are separate procedures. Even if no tax is due, the registration obligation still applies.
Q. Can I complete inheritance registration by myself?
It is possible, but the required documents are numerous and complex. To prevent mistakes, we also recommend asking a judicial scrivener to assist. The typical cost is about 50,000 to 100,000 yen.
