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Economy

Vacant homes in Japan reach record as outlying population shrinks

TOKYO -- A record 13.5% of all homes in Japan were vacant as of last October, reflecting an exodus from outlying regions of the country and a general aversion to previously occupied homes.

     Preliminary figures for a study on homes and land, conducted once every five years, were released on Tuesday by the Internal Affairs Ministry. The vacancy rate rose 0.4 percentage point from the previous survey. The number of empty homes grew by 630,000 to a record 8.2 million, and there were a record 60.63 million homes in all, an increase of 3.05 million.

     Yamanashi Prefecture had the highest vacancy rate at 22%, largely due to a population outflow to Tokyo and other large cities. Nagano and Wakayama prefectures followed at 19.8% and 18.1%, with the four prefectures in Shikoku all at the 17% level.

     According to the Land Ministry, secondhand homes account for slightly more than 13% of all properties on the market -- significantly lower than the roughly 90% in the U.S. and more than 80% in the U.K. The concept of renovating homes to make them last longer is not firmly established in Japan, according to a ministry official. Real estate companies do not actively handle used homes because they are considered to have lower value than new homes.

     The Land Ministry has been trying to change this by creating new appraisal guidelines in which repairs increase the value of homes. The country needs a new framework in which a used home is a better value than a new home, argues Hidetaka Yoneyama, senior research fellow at the Fujitsu Research Institute.

     An outdated tax system meant to promote construction of residences on farmland during Japan's high-growth era decades ago has been another obstacle. Landowners that tear down homes would see their fixed-asset taxes for that land roughly quadruple because a tax break would no longer apply. This has prompted many landowners to leave unoccupied homes as is.

     Some local governments have introduced measures to address the issue, such as subsidies to cover home demolition costs. Starting this fiscal year, Yamanashi Prefecture subsidizes renovation costs for those using empty homes as offices. Tokyo's Ota Ward introduced new rules that allow it to tear down dilapidated homes without the owners' consent.

     Lawmakers of the ruling Liberal Democratic Party plan to submit bills aimed at addressing the problem of unoccupied homes to the Diet this fall, including revisions to tax breaks.

(Nikkei)

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