A tax on a home you own but do not live in — Japan's first vacant home tax is getting under way in Kyoto City. It is officially called the Non-Resident Housing Utilization Promotion Tax (commonly known as the vacant home tax). It covers not only empty houses but also villas and second homes, and according to the city's announcements, taxation is scheduled to begin in fiscal 2030 (Reiwa 12). Vancouver, a forerunner, taxes 3% of assessed value and has cut its vacant homes roughly in half, while Paris adds a 60% surcharge to the residence tax on second homes. This article looks at the track record of vacant home taxes around the world and what people with a family home or villa in Kyoto should start thinking about now.
How it works: Kyoto City's "Non-Resident Housing Utilization Promotion Tax"
- Who is covered: Housing within the urbanization promotion area where "no one lives as their principal place of residence." This includes not only neglected vacant houses but also villas, second homes, and unused inherited family homes (properties that are being utilized, such as those currently rented out or advertised for tenants, are excluded)
- Start date: Taxation is scheduled to begin in fiscal 2030 (Reiwa 12) (determined by the state of use as of January 1, 2030; the start was pushed back from the original plan due to circumstances such as system development)
- Tax amount: Charged every year on top of the fixed asset tax, in the following two-tier structure
| Component | Tax rate (per year) |
|---|---|
| Building value portion | Assessed fixed asset value of the building × 0.7% |
| Location floor-area portion (three tiers by land assessment) | Lower-assessed locations: 0.15% |
| Mid-range locations: 0.3% | |
| Higher-assessed locations: 0.6% |
- Transitional measure for now: Houses whose building assessed value is under 1,000,000 yen are exempt for the first 5 years after the tax takes effect (a concession for older vacant houses)
- Roughly speaking, it works like a penalty for leaving a house vacant, added on top of the fixed asset tax. For the exact tax amounts, check the city's published materials and the ordinance
Why it was created: a tourist city where residents cannot buy homes
Kyoto City's urban area is constrained by land-use regulations, while demand for villas and investment second homes is strong. As a result, the city has long faced a structural problem: working families raising children in the city cannot afford homes and move out. The purpose of this tax is to put a cost on "ownership without residing" and encourage owners to sell, rent out, or move in. It was approved by the Minister for Internal Affairs and Communications in 2023 and enacted as Japan's first non-statutory local tax of the "vacant home tax" type. If Kyoto sets the precedent, other tourist destinations and urban municipalities with similar problems may follow.
Forerunners abroad: Vancouver and Paris
| City | How it works | Results |
|---|---|---|
| Vancouver (Canada) | Empty Homes Tax (since 2017). Initially 1%, now 3% of assessed taxable value charged every year | According to the city's reports, vacant homes fell 54% between the start of taxation and 2022. Revenue is allocated to affordable housing for low-income residents. Researchers' analyses, however, put the tax's direct effect at about a 21% reduction, so estimates of the effect vary |
| Paris (France) | A 60% surcharge on the residence tax for second homes (secondary residences). French law allows municipalities in housing-shortage zones a surcharge of 5–60%, and Paris adopted the maximum | More than 10% of housing in Paris is said to be second homes, and the aim is to push these units into the rental market. A separate tax on vacant units themselves (a vacant home tax) also exists |
What these cities share is the idea of raising the cost of "ownership without residing" in housing-starved cities. Some effect has been confirmed, but another common lesson is that no city has solved its housing problem through the tax alone.
The trend in Japan: the end of "cheap to just hold"
- Under a 2023 legal amendment, poorly managed vacant houses (kanri-fuzen akiya, "inadequately managed vacant homes") can now be excluded from the residential land special measure for fixed asset tax (a reduction of up to one-sixth). The long-standing distortion of "leave it standing because demolishing raises your taxes" is starting to be corrected. The mechanism is explained in our article on calculating fixed asset tax
- With Kyoto City's vacant home tax added on top, the direction is now clear at both the national and municipal levels: a vacant house costs more the longer you simply hold it
- If you have kept an inherited family home vacant, the standard move is to act while the exit incentives still exist: for a sale, the 30 million yen special deduction for inherited vacant homes (conditional on seismic retrofitting or demolition, with a deadline); for a home you lived in, the 30 million yen deduction for selling your own home
If you have a family home or villa in Kyoto: your options before 2030
- Sell: For an inherited vacant home, first check whether the 30 million yen special deduction applies. Some observers note that a "rush to sell" before taxation begins could move market prices
- Rent it out: If you rent it out and it has tenants, it is not subject to the tax. A fixed-term lease keeps open the option of "using it yourself someday"
- Live in or use it: If you live there as your principal residence, it is not covered. If you keep it as a second home, you need to recalculate the running costs with the tax factored in
- Doing nothing is the worst option: You face a triple cost — the vacant home tax, exclusion from the fixed asset tax special measure, and the risk of deterioration. Start by checking the building's assessed fixed asset value (shown on your annual tax statement)
What to do today
What to do today
- If you have a vacant house, villa, or family home you expect to inherit in Kyoto City (or another city), check the assessed values of the building and land on your fixed asset tax statement
- For an inherited vacant home, check the conditions for the 30 million yen special deduction (deadlines such as "by the end of the third year after inheritance")
- If the family home's future is undecided, use the Obon homecoming to discuss the direction — sell, rent, or use — with your family
FAQ
Q. When does Kyoto City's vacant home tax start?
A. According to the city's announcements, taxation is scheduled to begin in fiscal 2030 (Reiwa 12), determined by the state of use as of January 1, 2030. Because the start was pushed back from the original plan due to circumstances such as system development, check Kyoto City's official information for the latest schedule.
Q. Are villas and second homes also taxed?
A. Yes. The tax applies to housing where "no one lives as their principal place of residence," which is not limited to neglected vacant houses. However, housing that is being utilized, such as properties currently rented out, is excluded.
Q. Will it spread beyond Kyoto City?
A. That is undecided, but Kyoto City's tax is the first case in Japan approved by the Minister for Internal Affairs and Communications, and it serves as a template for other municipalities creating similar non-statutory local taxes. The idea could gain traction in tourist destinations and urban areas struggling with housing shortages.
Q. Have vacant home taxes abroad actually worked?
A. In Vancouver, the city's reports show vacant homes fell 54% between the start of taxation and 2022. Researchers' analyses, however, put the tax's direct effect at about a 21% reduction, so evaluations vary. Including the mechanism of allocating revenue to affordable housing for low-income residents, the realistic assessment is that the tax has some effect but is not a cure-all.
References (sources)
Note: Kyoto City's tax rates and start date are based on the city's published information as of August 2026. They may change before the tax takes effect, so base any actual decision on the latest official information and consultation with a professional.