About 11% of Land in Japan Is Unclaimed

(Bloomberg) -- In Japan's declining regions, land gets abandoned.

The ownership of about 11 percent of Japan's landmass is now unclear, with the current owners unable to be contacted, or unknown. That's about 41,000 square kilometers (16,000 square miles), which is equivalent to the size of Japan's southwestern island of Kyushu, or almost as large as Denmark.

By 2040, land equivalent to Japan's second-largest island of Hokkaido will be unclaimed or abandoned, according to a panel of experts and government representatives. This will cost the nation roughly 6 trillion yen ($54 billion) over the period 2017-2040, including lost development opportunities and uncollected taxes, the panel says.

Part of the problem is that land registries don't get properly updated after someone dies, and it becomes impossible to track down all the heirs to a piece of property. Sometimes this is because people don't want to inherit and take on responsibility for the land and taxes, while in other cases people are simply unaware of land that's been bequeathed by relatives. With the nation aging and more and more people dying each year, that problem looks set to get worse.

When land becomes a burden rather than an asset, people don't bother to register ownership, said Akio Yamanome, a professor of law at Waseda University in Tokyo, who chairs two government panels to tackle the problem of unclaimed land.

“Land prices are falling in the depopulating regions,” Yamanome said. “Not only is it impossible to make money by owning some land, but also you can't get rid of it because regional real estate markets are stale.”

The 2011 earthquake and tsunami brought the problem into focus when development plans to build houses for survivors of the disaster were delayed by unclaimed plots of land, according to Yamanome, who was born and raised in Fukushima, where much of the damage was concentrated.

Tracking down all the heirs long after someone dies can be tricky because in Japan it's not mandatory to update land ownership registrations. In one case, the registration for a cemetery hadn't been updated since 1958, and the number of heirs reached about 240 by 2015, according to the land ministry. A public works project stalled because the government couldn't find three of them.

To contact the author of this story: Yoshiaki Nohara in Tokyo at ynohara1@bloomberg.net.

To contact the editor responsible for this story: James Mayger at jmayger@bloomberg.net, Brett Miller

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