Can I legally rent out my home in Japan when I’m not living there, like on AirBnB?

In this post, we look at the basic considerations needed to determine whether you can legally rent out your home in Japan on a short-term basis, like on AirBnB.

This is a question that is being asked more and more frequently at our free real estate webinar series, where attendees are welcome to submit questions after the main presentation. Variations on this question are:

  • Can I buy an apartment in Japan and rent it out on a short-term basis when I’m not living there?
  • Can I rent out a room in my home on AirBnB?
  • Can I buy an akiya (vacant house) and turn it into a vacation rental?

In this article, we will focus on the first question.

Can I legally rent out my home in Japan when I’m not living there, like on AirBnB?

The short answer to this question is:

Yes, as the owner of a property in Japan you can legally rent out your home or a part of your home on a short-term basis, as long as you are compliant with the relevant private lodging law under which you choose to operate the rental. Many condominium building management agreements, however, explicitly forbid short-term rentals. Owners of condominium units should check their management agreement to make sure they are compliant with their building’s regulations.

If you are renting an apartment in Japan, you are not allowed to sub-lease your apartment to another person, including on a short-term basis.

Laws related to operating private lodging in Japan

There are four main forms of “private lodging” called “minpaku” (民泊 in Japanese) by which a property owner could rent out their home.

  1. Private lodging as a simple accommodation under the Ryokan Business Law (旅館業法)
  2. Special Zone private lodging under the National Strategic Special Zones Law (国家戦略特別区域法)
  3. Private lodging that has been registered as “registered housing” under the New Minpaku Act, which is officially called the Housing Accommodation Business Law (民泊新法 [住宅宿泊事業法])
  4. Event private lodging

In this article, we’ll use the terms “private lodging,” “short-term rental,” “rental,” and “minpaku” interchangeably.

The explanation below is meant to give an outline of the main private lodging types in Japan and is not intended as an exhaustive discussion or to provide investment or legal advice. Please consult a real estate professional and/or administrative scrivener for advice on your specific situation.

1. Renting out a room as a “simple accommodation”

Under the Ryokan Business Law, a “simple accommodation” (簡易宿泊所) is accommodation shared by a large number of people. It is the most commonly operated type of private lodging.

If you want to use one or several rooms in your house or apartment for private lodging, submit a permit application to operate a simple accommodation under the Ryokan Business Law. However, if you are thinking about leasing out a manshon you own in a condominium building as short-term rental, your building’s Condominium Management Agreement must also explicitly allow it. We’ll cover this case in more detail below.

Unlike other private lodging styles, there is no upper limit on the number of business days in a year you can operate and no upper limit on the number of consecutive nights.

If you choose to lease out a room under the Ryokan Business Law, you have a relatively high degree of freedom in how you operate your rental; it is also potentially easier to make profits, once you’ve made the initial investment in getting the permit and equipment required to be compliant as a simple accommodation.

Requirements

The main hurdles are that you have to meet the requirements specified by the Ryokan Business Law and all the relevant ordinances established by the local government.

In an-depth discussion of the requirements are beyond the scope of this article, but here are the basics:

  • The total floor area of the guest room must be 33 square meters or more
  • If the total number of guests that the entire accommodation can hold is less than ten, then the minimum guest room size must be 3.3 meters x the number of guests that can be accommodated
  • For bunk beds, the width of the upper and lower bunks must be at least one meter
  • If you are operating the rental as a boarding house, the rental period must be at least one month.

In addition to the Ryokan Business Law requirements above, the rental must also be compliant with the standards set by your municipality’s City Planning and Zoning Act, the Building Standards Act, and any relevant ordinances set by your local government.

An important thing to note is that you also have to apply for permission to advertise your accommodation on a short-term rental site like AirBnB.

Costs of getting a permit and other paperwork

Most people who apply for a “simple accommodation” permit usually use the services of an administrative scrivener because of the complexity and volume of paperwork required. If you submit an application on your own, the cost of the permit depends on the location of your property. In Tokyo, the cost is about ¥16,500 and in Osaka, it is about ¥22,000.

In addition, there is documentation you are required to submit to support your application, including acquiring a register, floor plans and layouts of the building, and water quality inspection costs.

2. Renting out a room as “Special Zone private lodging”

The “Special Zone Minpaku” law was enacted in December 2013 (about three months after Tokyo won the bid to host the 2020 Olympics) in order to rapidly help accommodate the accelerating number of foreign tourists and to promote regional development.

The main goal of the law was to enable local governments in designated areas to enact private lodging ordinances themselves in order to significantly relax regulations and make it easier for foreigners to rent short-term accommodations. Remember that the law was enacted in pre-COVID and pre-border-shut-down times!

Ota Ward in Tokyo was the first municipality to put in place a special zone for private lodging, in January 2016.

Currently, the main special zone minpaku areas are:

  • Tokyo metropolitan area
    • Tokyo: Ota Ward
    • Kanagawa Prefecture
    • Chiba Prefecture: Narita City, Chiba City
  • Osaka
  • Kyoto
  • Hyogo Prefecture: Yabu City
  • Kyushu
    • Fukuoka Prefecture: Fukuoka City, Kitakyushu City
  • Other prefectures and cities
    • Okinawa Prefecture
    • Akita Prefecture: Semboku City
    • Sendai, Miyagi Prefecture
    • Aichi prefecture
    • Hiroshima
    • Ehime Prefecture: Imabari City

Requirements

To rent out private lodging under the Special Zone Minapaku law, you must get a certification (認定) from the government. This is supposed to be much less expensive and require much less paperwork than for getting a permit for a “simple accommodation” (1. above). Please contact your local municipality for information specific to your area.

There is no upper limit on the number of nights you can rent out a room under the Special Zone Minpaku law, but the room must be rented for a stay of two nights three days or more.

There are also relaxed guest regulations, compared to rooms rented out under the Ryokan Business Law. Special Zone Minpaku rentals are considered a real estate leasing business and are exempt from the Ryokan Business Law, although they are considered a “special case” of the Ryokan Business Law.

This means, for example, that the operator of the business is not responsible for managing the behavior of guests. Guests are expected to regulate themselves, but the operator of the property should notify neighbors beforehand to let them know that short-term rental guests will be staying at the property. Source: Special Case of the Ryokan Business Law in National Strategic Special Zones, Ministry of Health, Labour and Welfare, PDF in Japanese)

3. Renting out a room for 180 days or less a year under the New Minpaku Act

The New Minpaku Act was enacted in June 2018 to create a new form of short-term accommodation in addition to the four already specified in the Ryokan Business Law (hotels, inns, simple accommodation, and boarding houses).

The main difference is the number of business days that you operate your short-term rental. If you register your house or condominium as a registered property under the New Minpaku Act and you rent out the accommodation for 180 days or less a year, it is exempt from the Ryokan Business Law.

The requirements to do a short-term rental business under the New Minpaku Law are also easier than for operating a “special accommodation” (1. above) and a “Special Zone private lodging” (2. above).

To rent out private accommodation under the New Minpaku Law, you need to send a notification (届出) to the prefectural governor.

4. Renting out a room as event private lodging

Event private lodging is a short-term use of a house or condominium as an accommodation facility for a big regional event where there is concern that there will be a shortage of accommodation facilities.

This type of lodging was intended to accommodate tourists for the Tokyo Olympics, but potentially be used for future major events such as the World Expo to be held in Osaka in 2025, for example.

Event private lodging does not require a business permit to operate, but it is not meant for people planning to run a long-term business, for which “simple accommodation” (1. above) may be more appropriate.

Penalties for operating private lodging outside of the law

There are severe penalties for violating the Ryokan Business Law and other laws related to the operation of private lodging.

For example, the penalty for violating the Ryokan Business Law is up to six months in prison and a fine of up to ¥1 million.

Renting out an apartment that you own in a condominium building

If you are thinking of buying a unit in an condominium building in order to operate it as a short-term rental either on an ongoing basis, or for part of the year, while you are not residing there, you should be sure to check the building’s management agreement and consult with the management association beforehand. This is because most condominium buildings do not allow the usage of units for private lodging business, such as AirBnB.

Many condominium buildings base their management agreements on the standard templated agreement published by the Ministry of Land. In the standard agreement, it is prohibited for unit owners to rent out their apartments for private lodging.

This is based on the idea of preservation of value and quality-of-life issues related to sub-leasing an apartment in a condominium building, especially a high-end building. For example, short-term guests may make a lot of noise when they are dragging suitcases through the hallway or when using the elevator; or may create a safety issue in the building. Short-term guests may also degrade the value of common areas such as the swimming pool or gym, for example, in high-end buildings.

You should also be aware that the management agreement could potentially be amended to prohibit private lodging by a three-quarter majority vote by the homeowners’ association, even if the agreement specifically allowed private lodging at the time you bought the property.


Sources:


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