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How to buy a farmland in Japan

The revised farmland Law will go into effect on April 1, 2023 in Japan

Buying farmland under a company name in Japan


Buying a farmland in Japan

In order to buy a farmland in Japan, permission is necessary

When you buy real estate, property, lot, apartment  in Japan, you do not have to receive permit from authority.

So, as long as you pay money to seller, you can acquire property right.

( When you pay your money, you have to confirm the person in front of you is true owner of right estate.

(🍓By the way, if you hope to look for a real estate without using Japanese language, you can contact with me. I can be your agent from the beginning. akiyama(a) farmland will be located in rural area. And in rural area, it may not be easy to find English speaking realtor.)

In the case,  you pay purchase money to a person who says he is a owner of the real estate, even if your name is registered in real estate registry, you can not obtain property right ( Shoyuu ken ) unless the person is real owner.  )

But in the case of farmland in Japan, you have to get permit from agricultural affairs committee (= 農業委員会=Nougyou iinkai ).

Even if buyer is Japanese national, this permit is required.

Without this permit (農地法の許可書= Nouchi hou no kyokasho), even if you pay purchase price, you can not get property right to the real estate.

And you can not register your name and address in real estate registry.

The certificate of the permit is necessary to registration of title transfer.

Government hopes to sustain farmeland in Japan

Japanese government think that we should preserve, keep certain amount of agricultural land, farmland ( 農地= Nouchi )

Japanese government hope to keep suitable the food self-sufficiency ratio = Shokuryo jikyu ritsu = しょくりょうじきゅうりつ.

That is why, if you try to change farmland into residential land, it is not easy.

If such permit is not required, many developer  will buy agricultural land and convert it into residential land and establish building on it.

Because, the selling price, appraisal value of farmland is cheaper than residential lot.

If the appraised value of farmland is not cheap, farmers need to pay a lot of property tax = kotei shisan zei, and farmer will stop farming.

Then, it will decrease food self sufficiency ratio.

So, if you buy lot in Japan, you have to check real estate registry in legal affairs bureau.

Moreover, even if the land is registered as residential land ( Takuchi ), if it is appraised as farmland, you still need to obtain this agricultural land permit.

In addition to this, when you rent farmland, this permit is also required.
Without this permit, the lease contract is void (無効=mukou).

How to get a Permit to buy a farmland in Japan?

When you hope to purchase farming land (Nouchi) in Japan, you need to contact with local agricultural affairs committee.

It sometimes located in local city hall.

Category of permit relating to a farmland in Japan

Basically there are two type of permit to purchase farmland in Japan.

In the case you purchase, rent agricultural land for the purpose of farming, you need to obtain permit from the agricultural committee (Article 3 of agricultural land ac).

( Just in case, Japanese version.

農地又は採草放牧地について所有権を移転し、又は地上権、永小作権、質権、使用貸借による権利、賃借権若しくはその他の使用及び収益を目的とする権利を設定し、若しくは移転する場合には、政令で定めるところにより、当事者が農業委員会の許可を受けなければならない。ただし、次の各号のいずれかに該当する場合及び第五条第一項本文に規定する場合は、この限りでない。 )

In the case you purchase agricultural land for the purpose of converting the farming into residential land, you need to obtain permit from agricultural committee. (Article 5 of agricultural land act) 

How to buy a farmland and start farming in Japan

Here, I will explain the case you purchase a farmland to manage farming there.

If you are salaried worker in Tokyo, you will not be able to obtain this permit in Niigata prefecture.

If you want to obtain this permit, you need to become a farmer.

Because, if you are living outside Niigata prefecture, you can keep your farming land in appropriate condition.

I will illustrate necessary process by citing the case of Sado city, Niigata prefecture.

In the case you try to obtain permit from agricultural land committee of Sado city, you need to live in Sado city at the timing of making application for permit.

You need to submit certificate of residence ( Juminhyo = じゅうみんひょう ) that is issued by Sado city hall.

So, if you are going to purchase farming land and neighboring residential land and house, you need to purchase residential land and house at first.

The contract to purchase residential land, farmland, house should include special clause that you can revoke this purchase contract without penalty if you cannot get permit from agricultural affairs bureau.

Then you live in the house and acquire a certificate of residence issued by Sado city.

And you can make an application for this permit.

At the timing of making this application for permit from agricultural affairs committee, you do not need to specify the date of payment of purchase price of farming land.

However, once you have obtained this permit, you need to purchase the farming land without delay.

Other option

At first you rent an apartment in Sado city and transfer your legal address to Sado city and acquire certificate of residence.

Then, you can make application for permit from agricultural affairs committee ( farming land committee = No gyo iin kai ).

Even if you have a job other than farming, you can get permit.

But if agricultural affairs committee think that you are very busy in your other job and you can not participate in farming, you cannot get permit.

You can hire a person to sustain your farming land.

But, you also need to participate in this activity.

In order to obtain this permit, you need to become a farmer and make effort to sustain your farmland.

You can not abandon your farmland.

When you obtain this permit, you need to promise that you will sustain this farmland in an appropriate situation.

So, you can not make hotel on the farmland.

According to Article 3 of farmland act ( Nouchi hou = 農地法 = のうちほう ), you need to submit application form to agricultural land committee.

The content of this paper is different from each city.

Business plan of farming is necessary

When you apply for issue of permit from agricultural committee, you need to specify your business plan in advance.

For example, ” I will establish hotel in neighboring forest land and operate hotel business.

I cultivate vegetable in farmland and serve fresh vegetables to our guests.”.

They will be able to accept this business plan.

At the timing of application for permit for purchasing farming land, you need to specify what kind of crops you are going to make in the farm.

In order to sustain your farmland in a suitable situation,  Agricultural affairs committee thinks farming tool ( farming equipment = nouki  = 農機) is necessary.

Even if you do not own it, you may rent it.

Even if you have not found how you acquire it, you need to indicate your plan to acquire it.

For instance, ” I will rent an cultivator from Mr Yamada.”

In this area, if you purchase farmland, the acreage of farmland should be at least 2000 ㎡.

Because, if the acreage of farmland is small, you can not get enough profit from farmland.

If you can not get enough profit, you can not become a professional farmer.

Agricultural affairs committee does not issue a permit for the persons who want to start farming for their hobby.

You need to promise that you use this lot as farmland at least 3 years.

If you have prepared all necessary documents to obtain a permit from agricultural affairs committee, you can send it by post.

However, when they issue certificate of permit, they can not send it by post.

So, you need to go to local Agricultural affairs committee.

The revised farmland Law will go into effect on April 1, 2023 in Japan

In order to buy farmland in Japan, buyers need to obtain permission from the local government.

Until now, in order to obtain permission under the farmland Law, buyers of farmland had to buy large tracts of farmland.

This is because, without owning a large piece of farmland, they cannot maintain their livelihood as a farmer.

But starting April 1, 2023, this requirement will be eliminated.

On the other hand, other requirements will continue to exist.

Those who buy farmland must properly manage the farmland. In other words, that person must not leave the farmland unattended.

They must also be engaged full time in farming. It is not acceptable to work as a company employee in Tokyo and engage in farming only on Sundays basically. Nor is it allowed to cause a nuisance to the neighboring land.

Buying farmland under a company name in Japan 

You are not a resident of Japan, but you are interested in buying farmland there. However, you have no plans to farm the land yourself.

Here is what you can do:

You and two farmers form a partnership and establish a company. The company attempts to purchase the farmland.

The company’s primary business objective must be farming. The farmers must hold more than 75% of the voting rights.

The two farmers must work on the company’s farm for a minimum of 150 days per year.

The company must acquire an appropriate size of farmland.

In this case, the comapny may be abel to acquire the permit to purchase the farmland.