Inheritance and Governing Law
In the case a foreign national who has a property in Japan dies, we need to know which law will govern the case.
It means we need to specify governing law.
In the case of Japan, Act on General Rules for Application of Laws ( hereinafter referred to ” Act ” ) stipulates this process.
At first, I will explain in the case an American who owns a property in Japan dies.
According to Article 36 of Act, Inheritance shall be governed by the national law of the deceased.
So, in this case, American state law governs this inheritance.
However, according to state law, as for real estate, laws wherein the real estate is located shall govern the inheritance.
So, in the case a real estate is located in Japan, law of Japan shall govern the inheritance as far as real estate is concerned.
This is called renvoi.
Article 41 of Act
In the cases where the national law of a party concerned shall govern, if Japanese law shall govern in accordance with the law of the country of the national law, Japanese law shall govern; provided, however, that this shall not apply where the national law of a party shall govern under Article 25 (including cases where it is applied mutatis mutandis pursuant to Article 26, paragraph (1) and Article 27) or Article 32.
So, if a American has a real estate in Japan and other kinds of property in Japan and deceased, Law of Japan shall be applied to inheritance of a real estate.
And state law shall be applied to inheritance of cash, vehicle, stocks etc..
Obligation to filing ownership transfer registration of Japan
If you purchase a real estate in Japan and hire a lawyer, she will file ownership transfer registration and your address and name is registered with legal affairs bureau (Real estate registry). Everyone can see the information.
Even if you purchase a real estate, it is not your obligation to register your name and address.
However you will do it to protect your right.
If you inherit a real estate in Japan, it is not your obligation to file ownership transfer registration from the deceased to you.
In order to file ownership transfer registration based on inheritance, you need to collect many documents (family register, statutory declaration paper etc.).
So some persons do not complete the registration process.
Alternation to law of Japan
When government of Japan purchases a real estate to public construction (ex. disaster prevention work), it needs to contact with owner of specific real estate.
If the registered owner died and ownership transfer registration is not completed, it is not easy for government to find current owners (heir of the real estate).
It needs to collect many documents to find heirs and it is not convenient for public purpose.
That is why, law relating to real estate registration was changed and it has been stipulated that filing on ownership transfer registration is obligatory for heirs.(year of enforcement : 2024)
Assumed that Mr.D died on 1st May, 2022 and his heir is Ms.H.
On 1st June 2022, Ms.H has known that Mr.D died and she is his heir (date of recognition).
In this case, she needs to file ownership transfer registration caused by inheritance by end 1st June 2025 (within three years from date of recognition).
Otherwise, she will be sentenced of fine of 100,000 yen or less.
Filing registration of change of address
Assumed that you (legal address : 1-1, Ginza, Tokyo ) purchase a real estate today. Then if you change your legal address to address : 1-1, Honolulu, USA in 2024.
Even if you change your legal address to USA, registered address in real estate registry is still Tokyo.
In this case, you need to file registration of change of address within 2 years from date of change of your legal address.
Otherwise, you will be sentenced of fine of 50,000 yen or less.
Registration of contact information
In the case non resident of Japan purchases a real estate in Japan, she needs to report contact information who is living in Japan to legal affairs bureau.
If she does not have a friend in Japan, she may be able to register her lawyer as contact information.
🌲Registration of transfer of ownership right by inheritance and exemption from registration tax of Japan
Taro Yamada passed away and Jiro Yamada inherited Taro’s real estate.
To complete the procedure for changing the name of the real estate (inheritance registration), Jiro needs to pay registration tax.
To calculate the registration tax, he needs to obtain a fixed asset valuation certificate for the property from the metropolitan tax office.
Therefore, Mr. Jiro obtained the fixed asset valuation certificate(固定資産評価証明書), and the assessed value of the real estate was as follows
Land at 1-1 Kachidoki, Chuo-ku, Tokyo: assessed value of fixed assets: 1,200,000 yen
Land at 1-2, Kachidoki, Chuo-ku, Tokyo: assessed value of fixed assets: 500,000 yen
In this case, the land at 1-2 Kachidoki, Chuo-ku is exempt from taxation.
This is because, under the Act on Special Measures Concerning Taxation（租税特別措置法）, land with an assessed value of 1,000,000 yen or less may be excluded when calculating the registration tax.
Therefore, the amount of registration tax in this case is 1,200,000 yen x 0.4% = 4,800 yen.