Owning an Akiya from Abroad: Maintenance, Running Costs and Rental Income

A Japanese house you do not live in needs looking after, and it can pay for itself. Both halves of that sentence surprise people. Owners who leave an akiya shut for two winters come back to mould, a dead garden and a letter from the town office; owners who put a modest renovation into the right house in the right place find that rural rents and short-stay demand cover the running costs and more.

This guide covers what it costs to hold an akiya each year, the minimum upkeep that keeps it out of trouble, and the three realistic ways to earn from it, with the numbers we see on client properties. It assumes the house is bought and habitable; the work to get there is in our renovation cost guide.

What an empty house costs each year

Taxes are the small line. Keeping the house and grounds in order is the large one, and it is the one that cannot be skipped. The tax guide has the rates and how a non-resident pays them.

The upkeep that keeps a house out of trouble

Japanese houses are wooden and the climate is humid. Left closed, a house grows mould in one summer; left unmaintained, the garden reaches the road in two; and a house that visibly decays attracts the town office. A municipality can designate a property a specified vacant house (特定空家) when it is dangerous, unsanitary or badly affects the surroundings. The designation removes the residential reduction in fixed asset tax (the land tax rises up to sixfold), allows repair orders at your cost, and in the last resort demolition at your cost. Towns use this power more every year.

The minimum that prevents all of it:

• Air the house monthly. Open every window and cupboard for an hour, run the taps and flush the toilets so the drain traps do not dry out and let sewer gas in.
• Check after storms and heavy snow. Roof tiles, gutters, and whether anything is leaking inside.
• Cut the garden at least four times between May and October, and keep trees off the neighbours' land and power lines.
• Clear the post and respond to anything from the town office.
• Keep the electricity on at the lowest tariff if you leave anything that needs it, and turn the water off at the main if the house will be empty through a freezing winter.

Vacant-house management services

Every prefecture now has companies, and often the local silver human resources centre, offering exactly this as a service (空き家管理サービス): a monthly visit with airing, running the water, a walk round the outside, photographs, and a report by email, from about ¥5,000 a month for the basic visit to ¥15,000 with garden work. The neighbours notice the visits, which matters more than it sounds. Akiya Air's management service does this for owners abroad, and adds the things a vendor cannot: paying the bills, acting as your domestic contact and tax agent, handling tradespeople, and dealing with the town office in Japanese.

Earning from the house

Three models work for an akiya. Which one depends on the location far more than on the house.

Long-term rental

The simplest and most reliable. Rural and small-town rents for a renovated detached house run ¥30,000 to ¥70,000 a month; in commuter towns and tourist regions ¥70,000 to ¥120,000. On a house bought for ¥3 million and renovated for ¥5 million, a rent of ¥50,000 is a gross yield of 7.5 percent, and Japanese tenants tend to stay for years.

What to know: a management agent (管理会社) finds the tenant, collects the rent and handles problems for about 5 percent of rent plus a month's rent on each new tenancy; the Residential Lease gives tenants strong protection, so a fixed-term lease (定期借家) is the form to use if you may want the house back; and tenants expect the house to be empty, clean and working, with an inspection report at move-in. Demand is real: young families leaving cities and local workers both struggle to find detached houses to rent in the countryside.

Short-term lets

Short-term rental in Japan is legal and licensed, in two forms:

• Private lodging (民泊) under the Private Lodging Business Act: a notification to the prefecture, basic fire-safety fittings, a named manager (which may be a management company) reachable within a set time, and a cap of 180 nights a year. Some municipalities add their own restrictions on days or areas.
• A simple lodging licence (簡易宿所) under the Hotel Business Act: more requirements (fire equipment, sometimes a front desk arrangement, zoning), no cap on nights. This is the route for a house in a real tourist area.

Management companies run the listings, cleaning and guests for 20 to 30 percent of revenue. The economics work in places guests already go: near ski resorts, onsen towns, Kyoto's hinterland, the Seto Inland Sea, Okinawa, the Japan Alps. A well-run kominka near a ski area can gross ¥3 to ¥6 million a season; a house in an ordinary farming village will not. We are frank about which is which before a client buys for this purpose.

Monthly and seasonal rentals

Furnished rentals by the month (マンスリー) to remote workers, researchers, seasonal staff and people trying out rural life sit between the two: higher rents than a long lease, none of the lodging licensing, and tenants who leave on a known date. Demand is strongest within an hour of a city or near a university or a hospital.

Other uses owners find

A base for your own visits with the house rented between them; a studio, workshop or small guesthouse under the licences above; a long lease to the municipality or a non-profit for community use, which some towns actively seek and which keeps the house occupied and insured at no cost to you.

Tax on what you earn

Japan taxes rental income from Japanese property regardless of where the owner lives. A non-resident files through a tax agent, deducts management fees, repairs, insurance, depreciation and the property taxes, and pays national income tax at the progressive rates (no local tax). A company tenant withholds 20.42 percent at source; a private tenant renting the house as a home does not. Short-term letting income is taxed the same way, and above ¥10 million a year of lodging revenue consumption tax registration becomes a question for your accountant. Your home country usually credits the Japanese tax under its treaty with Japan.

Selling, when the time comes

A renovated, occupied house in a town with an akiya bank sells; an empty one deteriorates and sells for less than you paid. Capital gains are taxed at 20.315 percent for residents and 15.315 percent for non-residents when the house has been held more than five years (counted to 1 January of the year of sale), roughly double that within five years. Renovation costs that count as capital improvement reduce the gain, so keep every invoice.

What Akiya Air does for owners abroad

Our management service is built for the owner who is not in Japan: monthly visits and reports, bill payment, the domestic contact and tax agent roles, tradespeople and repairs, and, for owners who want income, the choice of model, the licensing, the agent or operator, and the oversight. The goal is a house that is in better condition every year and that costs you time only when you choose to spend it there.

Frequently asked questions

Already own a house in Japan, or planning to? Talk to us about looking after it: the management service or a free 20-minute call.