Japan’s land ministry plans loans to renovate vacant homes for rent

Across Japan, firms already buy vacant houses, refurbish them and sell them on.

Few follow the same model for the rental market, where such projects remain largely the preserve of a handful of small businesses.

The difficulty begins with the purchase.

Because vacant properties have low asset values, financial institutions are often reluctant to accept them as collateral, making it hard for businesses to secure acquisition funding before refurbishment.

In response, Japan’s land ministry will introduce a programme under which the Japan Housing Finance Agency will provide low-interest loans for renovation costs.

Investment returns on funds contributed by the government to the agency will be used to support eligible businesses.

The measure is designed to put Japan’s rising stock of vacant homes to more effective use, addressing what has become a serious problem in the country.

Renovated properties will be offered as rentals to families with children and low- and moderate-income households.

Related spending has been included in the ministry’s fiscal 2027 budget request.

Cooperation with local governments will carry weight when loans are provided, particularly where those authorities are pursuing vacant-home measures.

Priority will go to companies supplying homes for families with children in accordance with a local government’s community development plan.

Eligibility will not be confined to ordinary vacant houses.

Companies renovating old public housing for rental use will also qualify for low-interest loans.

[Copyright The Jiji Press, Ltd.]