Unclaimed land to cost Japan ¥6 trillion and extend to 90% size of Hokkaido by 2040

Kyodo

Accumulated economic losses due to the neglect of unclaimed land, including damage from flooding or mudslides which can be caused by poor land management, will reach ¥6 trillion ($52.9 billion) by 2040, a private-sector study group said Thursday.

With inheritors allowing property to go unregistered to avoid tax burdens, land with unclear ownership is projected to total 7.2 million hectares across the nation by 2040 — an area about 90 percent of the size of Hokkaido — according to estimates by the research group which includes former internal affairs minister Hiroya Masuda.

Alarmed by the predicted growth of unclaimed property, the government has been discussing ways to effectively manage the land through various measures such as giving usage rights to companies and nonprofit organizations and promoting registration by inheritors.

“The area (of unclaimed land) is expected to expand very rapidly because the reasons for land usage will be lost amid accelerating population decline,” Masuda told a news conference. “The situation is very grave.”

The former Iwate governor called for a change in attitudes about land inheritance and ownership, and proposed a flexible system to make use of land.

In June, the study group estimated the total area of unclaimed land in Japan — including residential, agricultural and forest property — accounted for about 4.1 million hectares as of 2016, slightly bigger than the size of Kyushu.

The group calculated the 2040 figure assuming no countermeasures would be taken by central and local governments.

Close to 30 percent of the property available for inheritance between 2020 and 2040 could become unregistered, according to a poll surveying residents who are expected to inherit land. Land owned by aging baby boomers may also become vacated following their deaths. Such cases are also expected to increase sharply.

Potential economic losses were calculated by estimating lost business opportunities on unused land with unknown owners, the costs of tracking owners down, as well as other factors.

Estimated losses due to the weakening of land functions that prevent disasters accounted for around 60 percent of the total, at around ¥3.6 trillion.

The group estimated annual losses from unknown ownership of land will surge to around ¥310 billion in 2040, from about ¥180 billion in 2016.

When local governments plan to start public works projects they need to obtain the agreement of land owners, but finding them often costs time and money.

The land ministry launched a panel in September to come up with effective measures, such as setting a time limit of around five years on the right to use land of unknown ownership for projects of public interest, including direct sales of farm products.

The panel plans to wrap up discussions by the end of the year, and the ministry will submit a bill reflecting its recommendations to the ordinary Diet session to be convened next year.

The Justice Ministry, which manages the land registration system, started simplifying the registration process for land beneficiaries in May to lighten their burden.

It also established a study group earlier this month to encourage proper inheritance registrations. The group is expected to issue its report by 2019, possibly calling for changes to the law.

In the fiscal year starting next April, the Justice Ministry and local municipalities will begin surveys to locate owners or inheritors of land that may obstruct public works projects, and urge them to register their property.