Minpaku Laws in Japan

Minpaku Laws in Japan

Japan

Introduction
Introduction to Minpaku in Japan

Immerse yourself in the vibrant, multi-layered culture of Japan through the rising trend of short-term rentals. A spectrum of chic urban lofts, tranquil century-old ryokans, and everything in between await the visitors looking for a unique, authentic experience. Japan’s short-term rental market bursts with diversity, offering a variety of options for travellers - from those desiring a taste of traditional Japanese lifestyle, to the nomadic professionals hunting for a fully-equipped contemporary space. A thrilling blend of traditional ethos and modern hospitality, this rapidly expanding sector is redefining the landscape of Japan's tourism industry and reimagining how visitors explore the Land of the Rising Sun. Let's delve into this captivating world of short-term rentals in Japan, and unravel the myriad opportunities it presents.

Overview

Immerse yourself in the vibrant, multi-layered culture of Japan through the rising trend of short-term rentals. A spectrum of chic urban lofts, tranquil century-old ryokans, and everything in between await the visitors looking for a unique, authentic experience. Japan’s short-term rental market bursts with diversity, offering a variety of options for travellers - from those desiring a taste of traditional Japanese lifestyle, to the nomadic professionals hunting for a fully-equipped contemporary space. A thrilling blend of traditional ethos and modern hospitality, this rapidly expanding sector is redefining the landscape of Japan's tourism industry and reimagining how visitors explore the Land of the Rising Sun. Let's delve into this captivating world of short-term rentals in Japan, and unravel the myriad opportunities it presents.

Property
Overview

Yes, the Japan Association of Vacation Rentals serves as a national body providing support and guidance for short-term rental owners in the country. It offers resources such as education and training, advocates for the interests of vacation rental owners and hosts, and provides a platform for networking and collaboration among industry professionals. The association's mission is to enhance the growth and success of the vacation rental industry in Japan.

Property
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short term rentals
What is Minpaku in Japan?
What are short Term Rentals in the Country?

In Japan, short-term rentals are commonly referred to by several local terms:

  1. Minpaku (民泊): This is the most widely used term for short-term rentals in Japan. Originally, "minpaku" referred to private homes offering accommodations to travelers, but it now broadly includes all types of short-term rentals, including entire homes, apartments, or rooms available for short stays. This term gained popularity with the rise of platforms like Airbnb.
  2. Kashiya (貸家): This term means "rental house" and can refer to properties rented for short or extended periods. While not exclusively used for short-term rentals, it’s often used to describe private homes available to rent.
  3. Shukuhaku (宿泊): This term translates to "accommodation" and is a general term for any lodging facility. It’s frequently used in official contexts, such as on government websites and in regulatory discussions regarding short-term lodging and tourism.

On popular booking platforms like Airbnb and Rakuten Stay, the English term "Vacation Rental" or "Short-Term Rental" is often used to describe these accommodations, making them easily recognizable to international travelers.

Is Subletting Legal?
Is Subletting Legal in Japan?

In Japan, tenants generally cannot operate short-term rentals without explicit permission. This requires both landlord consent (as most leases prohibit subletting) and, in condominiums, HOA approval. Additionally, compliance with Japan's Minpaku Law (including registration and adherence to safety/hygiene guidelines) and any local municipal restrictions is mandatory.

National Association for STR Owners
What is the maximum length of stay in Japan?
What is the maximum length of stay?

In Japan, the Minpaku Law (Private Lodging Business Act) permits short-term rentals for a maximum of 180 days per year nationwide. However, local governments can impose additional restrictions. For example:

  • Tokyo: Some wards restrict rentals to specific days or seasons.
  • Kyoto: Certain areas limit rentals to off-peak tourist seasons.

These local ordinances aim to balance tourism with community well-being.

Is there any National Registration Requirement or Permit?

Japan's Minpaku Law allows short-term rentals up to 180 days annually nationwide, but local governments (e.g., Tokyo, Kyoto) can impose stricter limits (specific days/seasons). The maximum rental period is determined by local regulations and Minpaku compliance, not property type or guest number. Hosts must register with local authorities and obtain necessary permits to operate legally, adhering to safety, hygiene, and record-keeping standards. Non-compliance can result in penalties. Consulting local authorities is essential.

Is there a need for Permission from Landlord/Local Council/Neighbors?

In Japan, operating short-term rentals requires: 1) Landlord permission (as most leases prohibit subletting); 2) HOA approval (for condominiums, where rules often ban STRs); and 3) Local government registration and permits under the Minpaku Law. Failure to obtain these can lead to eviction, fines, or other legal consequences.

Is Short-term rental Income taxable?

Japanese short-term rental income is subject to national and local taxes. Nationally, income tax (5-45% progressive rates plus a 2.1% Reconstruction Special Income Tax surtax) applies to rental earnings, considered part of the host's overall income. Consumption Tax (10% VAT) may also apply, but there's a ¥10 million annual sales exemption. Locally, municipalities impose accommodation taxes per guest per night, varying by price: Tokyo (¥100-¥200), Osaka (¥100-¥300), and Kyoto (¥200-¥1000). While all rental income must be declared for income tax, deductions for expenses like maintenance, utilities, insurance, and depreciation are available. Due to the complex tax system, consulting a tax professional is highly recommended for compliance and to avoid penalties.

Is there any National Tourism Fund or Tourist Tax?

Short-term rental hosts in Japan don't directly contribute to a national tourism fund, but they are responsible for collecting and remitting various taxes from guests, which indirectly support tourism infrastructure and services. The key taxes are:

  • Accommodation Tax (Lodging Tax): This is a local tax levied by several municipalities on guests staying in lodging facilities, including short-term rentals. Hosts are responsible for collecting this tax and remitting it to the local government. The rates vary by location and are usually tiered based on the accommodation price per person per night. For example:

Tokyo: ¥100 per night (¥10,000-¥14,999 room rate) or ¥200 per night (¥15,000+).

Osaka: ¥100 (¥7,000-¥14,999), ¥200 (¥15,000-¥19,999), or ¥300 (¥20,000+).

Kyoto: ¥200 (under ¥20,000), ¥500 (¥20,000-¥49,999), or ¥1,000 (¥50,000+).

  • Consumption Tax (VAT): This is a national tax on goods and services, including accommodation. The current rate is 10%. However, hosts with annual taxable sales below ¥10 million are generally exempt from collecting and remitting this tax. Those exceeding this threshold must register as taxable enterprises and handle the collection and remittance process.
  • Income Tax: Hosts must declare their rental income on their annual income tax returns. Japan uses a progressive income tax system, meaning the tax rate increases with income, ranging from 5% to 45%. A 2.1% Reconstruction Special Income Tax surtax is also applied to the calculated income tax.

It's crucial for hosts to consult with a tax professional to ensure they correctly understand and comply with all applicable tax obligations, including collection, remittance, and reporting requirements.

Is there any Guest Registration and Reporting Requirement?

Japanese short-term rental hosts must register guest information with authorities for safety and compliance. This includes recording guest details (name, address, occupation, nationality) and photocopying passports of non-Japanese guests, as per Ministry of Health, Labour and Welfare regulations. This information is regularly reported to local authorities (e.g., health centers, police stations). Non-compliance can result in fines or license revocation.

Is there any National Health and Safety Requirements?

Japanese short-term rentals (minpaku) must adhere to Minpaku Law health and safety standards. Key requirements include fire safety measures (smoke detectors, extinguishers, marked exits), sanitation (cleanliness and proper waste disposal), structural safety (building standards, ventilation, earthquake resistance), and guest information management (recording guest details and retaining passport copies for non-Japanese guests, with mandatory reporting to authorities). Compliance is essential for legal operation and guest safety.

Is there any Platform Accountability Requirement?

Yes, in Japan, online platforms that host short-term rental listings are required to ensure compliance with national laws and regulations. Under the Minpaku Law, these platforms must verify that all rental listings display a valid registration number, confirming that the host is registered with local authorities. This requirement helps maintain legal and regulatory standards across all short-term rental properties listed on their sites.

Is there any Anti-Discrimination Law?

Japan lacks a direct equivalent to the Americans with Disabilities Act ADA for short-term rentals. However, the Act on the Elimination of Discrimination against Persons with Disabilities mandates and businesses to make reasonable accommodations to prevent discrimination against individuals with disabilities. Accommodations by businesses (including lodging), and the Hotel Business Act sets safety and hygiene standards. While these offer some protection, Japan's anti-discrimination laws are not as comprehensive as in some other countries.

Is there any Data Sharing Requirements?

Yes, in Japan, short-term rental platforms are mandated to share specific data with national government authorities. Under the Minpaku Law (Private Lodging Business Act), which came into effect on June 15, 2018, operators of short-term rentals are required to:

  • Register their properties with local government authorities.
  • Submit regular reports to local governments, detailing the number of guests and occupancy rates.
  • Maintain a guest registry that includes information such as guest names, addresses, and stay durations.

These measures aim to ensure compliance with safety, hygiene, and zoning regulations, and to monitor the impact of short-term rentals on local communities. While the primary responsibility lies with the property operators, platforms facilitating these rentals, like Airbnb, are also expected to cooperate by ensuring that listings comply with national and local regulation

Is there any National Insurance Requirement?

In Japan, while there is no explicit legal requirement mandating hosts to obtain liability insurance for short-term rental properties, it is highly recommended. The Minpaku Law (Private Lodging Business Act) stipulates that hosts must ensure the safety and well-being of their guests, which includes implementing appropriate risk management measures. Obtaining liability insurance is a prudent step to protect against potential claims arising from guest injuries or property damage. Additionally, some local governments may have specific regulations that effectively require such coverage. Therefore, hosts should consult with local authorities and consider securing comprehensive insurance to mitigate potential risks.

Is there any National Zoning law/Cultural Heritage law?

In Japan, short-term rentals, known as "minpaku," are regulated to protect culturally and historically significant areas through a combination of national laws and local ordinances:

  1. Cultural Properties Protection Law: This national legislation safeguards cultural assets by designating certain sites as protected areas. In these zones, activities that could alter or damage the cultural heritage, including the operation of short-term rentals, are often restricted or prohibited.
  2. Local Government Ordinances: Municipalities have the authority to impose additional regulations on short-term rentals to preserve the character of culturally significant neighborhoods. For instance, Kyoto City has implemented strict rules limiting the operation of minpaku in its historic districts to specific times of the year, thereby reducing potential disruptions to the cultural environment.

These measures collectively aim to balance the growth of the short-term rental market with the preservation of Japan's rich cultural heritage.

Is there any Environmental Regulations that affects STR?

In Japan, nationwide sustainability requirements for short-term rentals are not explicitly defined. However, operators must adhere to several regulations that indirectly promote sustainable practices:

  1. Minpaku Law (Private Lodging Business Act): Enacted in 2018, this law mandates that short-term rental operators register their properties, comply with safety and hygiene standards, and limit rental operations to 180 days per year. While not directly addressing sustainability, these regulations encourage responsible property management.
  2. Local Government Ordinances: Municipalities may impose additional requirements to protect the local environment and community. For example, some areas have restrictions on waste disposal and noise levels, promoting a more sustainable and harmonious living environment.

While there is no specific national legislation targeting sustainability in short-term rentals, these existing regulations contribute to more responsible and sustainable rental practices.

Is there any National Tenant Protection Law?

In Japan, the Act on Land and Building Leases provides robust protections for long-term tenants, making it challenging for landlords to evict them in favor of short-term rental arrangements. Key provisions include:

  1. Right to Lease Renewal: Under standard lease agreements, tenants possess the right to renew their leases upon expiration. Landlords can refuse renewal only under specific, justifiable circumstances, such as the landlord's intention to use the property personally or significant breaches of the lease by the tenant.
  2. Fixed-Term Lease Contracts: While fixed-term leases do not automatically renew, landlords must provide advance notice of non-renewal. Even in these cases, evicting a tenant solely to convert the property into a short-term rental is generally not considered a valid reason.

These legal safeguards ensure that long-term tenants cannot be arbitrarily displaced to accommodate short-term rental operations.

Is there any Reporting Requirements for Foreigners?

In Japan, lodging facilities, including short-term rentals, must collect specific information from foreign guests without a Japanese address. Since April 1, 2005, this includes recording nationality and passport number, in addition to standard guest details (name, address, occupation). Passport verification and photocopying are also mandatory. While not routinely reported to immigration, these records must be kept for potential inspection by authorities for security and public health purposes.

Is there any Digital Platform Regulation Compliance?

Yes, in Japan, short-term rental platforms are required to verify that properties comply with national regulations before listing them. The Minpaku Law mandates that all short-term rental properties obtain a registration number from local authorities. Platforms like Airbnb must ensure that hosts provide this registration number, which is then displayed on the listing. This process helps confirm that the property meets legal requirements and operates within the law.

Is there any Consumer Protection Law that affect STR?

Japanese short-term rental contracts are protected by several laws. The Consumer Contract Act prevents unfair contract terms, the Act on Specified Commercial Transactions prohibits misleading practices and mandates clear service information, and the Minpaku Law requires registration, adherence to standards, rental limits, and provision of essential guest information, collectively ensuring fair and transparent contracts.

Is there any Law that applies to Non-resident Owners?

In Japan, non-resident short-term rental owners must: 1) Appoint a local representative/management company (as required by the Minpaku Law); 2) Pay a 20.42% withholding tax on rental income (remitted by the tenant/payment source); 3) File income tax returns at a flat 20.42% rate on net rental income; and 4) Pay annual property taxes (fixed asset tax and city planning tax).

Is there any classification of STR in the country?

In Japan, short-term rentals (STRs) are primarily classified under the Minpaku system, which is regulated by the Private Lodging Business Act. This system categorizes STRs based on operational aspects:

  1. Registered Minpaku: These are private lodging businesses where hosts register their properties with local authorities and comply with specific regulations, including safety standards and a maximum rental period of 180 days per year
  2. Licensed Minpaku: Properties operating beyond the 180-day limit or offering additional services may require a hotel or ryokan license, subjecting them to more stringent regulations.

These classifications ensure that short-term rentals operate within legal frameworks, maintaining safety and quality standards for guests.

Are there Special National Event Regulations?

During national events/holidays in Japan, local governments may implement additional regulations for public order and well-being. These can include stricter noise restrictions, curfews, and enhanced security checks (e.g., ID verification). These measures are locally enacted and vary by event and location, as seen during the 2020 Tokyo Olympics.

Is there any Penalty for Violating National Rules?

Non-compliance with Japan's national short-term rental regulations, particularly operating without the required Minpaku permit, can result in several penalties:

  1. Fines: Hosts operating without proper registration may face fines of up to ¥1 million (approximately $9,000 USD).
  2. Business Suspension Orders: Authorities can issue orders to suspend operations until compliance is achieved.
  3. Legal Action: Persistent violations can lead to more severe legal consequences, including potential imprisonment.
  4. Operational Disruptions: Non-compliant listings may be removed from platforms like Airbnb, leading to loss of income.
  5. Reputation Damage: Negative publicity from non-compliance can deter future guests and harm the host's standing in the community.

Adhering to regulations is crucial to avoid these penalties and maintain a successful short-term rental business in Japan.

Are there National Rules or Regulations Governing Short-Term Rentals in Japan?
Are there National Rules or Regulations Governing Short-Term Rentals in the Country?

Yes, Japan has national regulations governing short-term rentals, commonly known as "minpaku." The primary legislation is the Private Lodging Business Act, enacted in June 2018, which sets the framework for operating short-term rentals. Key provisions include:  registration with local authorities, a 180-day annual rental cap, adherence to safety and hygiene standards, and guest information recording. Local governments can impose stricter regulations (e.g., further rental day limits, designated zones). These regulations balance tourism with community interests.

Is there any National Tax that affects short-term rental?

In Japan, short-term rentals, commonly known as "minpaku," are subject to national regulations under the Private Lodging Business Act (Minpaku Law), effective since June 2018.

  1. Income Tax: Rental income is considered taxable and must be reported on your annual income tax return. Japan employs a progressive income tax system, with rates ranging from 5% to 45%, depending on your total taxable income. Additionally, a 2.1% surtax, known as the Reconstruction Special Income Tax, is applied to the income tax owed.
  2. Consumption Tax (VAT): As of 2024, Japan's consumption tax rate is 10%. However, individuals or businesses with annual taxable sales of less than ¥10 million are generally exempt from collecting and remitting consumption tax.

permits, license
Are there any Permits, Licenses, or Registrations for Minpaku in Japan?
Are there any Permits, Licenses, or Registrations for Short-term Rentals in the Country?

Japan's Minpaku Law allows short-term rentals up to 180 days annually nationwide, but local governments (e.g., Tokyo, Kyoto) can impose stricter limits (specific days/seasons). The maximum rental period is determined by local regulations and Minpaku compliance, not property type or guest number. Hosts must register with local authorities and obtain necessary permits to operate legally, adhering to safety, hygiene, and record-keeping standards. Non-compliance can result in penalties. Consulting local authorities is essential.

Is there any National Association for Minpaku owners in Japan?
Is there any National Association for STR owners in the Country?

Yes, the Japan Association of Vacation Rentals serves as a national body providing support and guidance for short-term rental owners in the country. It offers resources such as education and training, advocates for the interests of vacation rental owners and hosts, and provides a platform for networking and collaboration among industry professionals. The association's mission is to enhance the growth and success of the vacation rental industry in Japan.

National Association for STR Owners

Disclaimer

Lodge compliance is not a licensed tax or financial advisor. Therefore nothing in the above article should be construed as tax, legal, or financial advice. Contact your local tax office for information regarding your personal circumstance.

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