Japan's 外為法 Real Estate Filing: The 20-Day Report Most Foreign Buyers Don't Know About

If you are buying, selling, or transferring Japanese real estate in a transaction that crosses the resident / non-resident boundary, there is a Japanese law most foreign investors have never heard of — and missing it is a criminal matter, not just a paperwork mistake.

It is the Foreign Exchange and Foreign Trade Act (外国為替及び外国貿易法), commonly known as 外為法 (gaitamehō), or FEFTA in English. Tucked inside its many provisions is a quiet but important reporting obligation for cross-border real estate transactions: a filing made to the Minister of Finance via the Bank of Japan (財務大臣 経由 日本銀行), due within 20 days of acquisition.

Why FEFTA Applies to Real Estate

FEFTA was originally designed to monitor cross-border capital flows for economic security and statistical purposes. Real estate transactions involving non-residents are one of the categories the government tracks. The law operates in the background of nearly every cross-border property deal in Japan, even though most parties never notice — banks and licensed real estate agents typically handle their share of compliance silently.

But one filing routinely slips through the cracks: the real estate acquisition report under Article 55-3 (第55条の3).

The Article 55-3 Acquisition Report

The core rule is this: a Japanese resident (居住者) who acquires real estate or related rights in Japan from a non-resident (非居住者) — as consideration for monetary payment — must file an acquisition report.

• Who files: The resident buyer (regardless of nationality)
• What property: Real estate located in Japan, or rights in such real estate other than ownership (e.g., leasehold rights)
• When: Within 20 days from the date of acquisition
• Where: Submitted to the Minister of Finance, via the Bank of Japan

The report captures the property location, type, acquisition price, and the parties to the transaction. The filing is not public — the data is used by Japanese government agencies for capital flow monitoring.

"Resident" Doesn't Mean What You Think

Here is the part that catches everyone off guard: under FEFTA, "resident" and "non-resident" have nothing to do with nationality. They are defined by physical presence in Japan.

• A Japanese citizen who has lived overseas for more than two years is a non-resident for FEFTA purposes.
• A foreign national who has lived in Japan for more than six months is a resident for FEFTA purposes.
• The same person can flip between resident and non-resident status across their life.

This means transactions that look "domestic" on paper may be cross-border under FEFTA — and vice versa.

When Does This Affect You?

Scenario 1: A resident buys property from a non-resident

For example, a Japan-based investor buys a Tokyo condo from a seller who emigrated abroad years ago. The seller is a non-resident; the buyer is a resident. The buyer has a 20-day filing obligation.

Scenario 2: A non-resident sells property to a resident

If you are a non-resident owner of Japanese real estate — exactly the audience this site is built for — and you sell to a Japan-based buyer, the resident buyer is the one who must file. As the seller, you may be asked to provide transaction details to support their filing, and your cooperation is often a contractual condition of closing.

Scenario 3: Cross-border related-party transfers

Internal restructurings, gifts, inheritances, and corporate transfers that move property across the resident / non-resident boundary may trigger FEFTA reporting under various provisions. These cases are nuanced and almost always require professional review.

Common Exceptions

The acquisition report is not required in every case. Typical exceptions include:

• Acquisition by a resident or their relatives for their own residential use
• Acquisition by a resident's employees for residential use
• Acquisition for non-profit business operations
• Acquisition from another non-resident, where no Japanese-side resident party exists

Exemptions and thresholds change over time. Before relying on any exception, verify the current rules with a tax representative, lawyer, or the Bank of Japan's FEFTA reporting desk.

What Happens if You Don't File

FEFTA reporting violations are a criminal matter under Japanese law, not merely a civil one. Failure to submit a required report — and especially false reporting — can result in fines and, in serious cases, imprisonment. The exact penalties depend on which reporting provision was violated and whether the violation was inadvertent or willful.

For most owners, however, the bigger risk is not the formal penalty. It is the compliance gap that surfaces years later, when you sell, transfer, or restructure the property and a counterparty's lawyer asks for proof of historical FEFTA compliance. A missing 20-day filing from years past can delay closing, force last-minute remediation, or in some cases derail a deal entirely.

Related Reporting: Payment Reports (第55条)

The acquisition report is not the only FEFTA filing that may apply to your transaction. Article 55 separately requires payment reports for certain cross-border money flows — typically large international wire transfers tied to Japanese assets. Banks usually handle the bank-side filings automatically, but the Japan-side party of the transaction remains responsible for ensuring the full set of regulatory paperwork is complete.

For a typical cross-border property deal, several FEFTA filings may be in scope simultaneously:

• Acquisition report (Article 55-3) — by the resident party
• Payment report (Article 55) — for large incoming or outgoing payments connected to the transaction
• Counterparty notifications — depending on the structure of the deal

Why This Filing Gets Missed So Often

1. Real estate agents don't file it. Their FEFTA awareness is usually limited to confirming the broad legal framework — they are not licensed or expected to handle the report itself.
2. Tax accountants focus on tax law, not foreign exchange law. The two regimes are governed by different agencies — the NTA versus the MOF and Bank of Japan — and many accountants are unfamiliar with FEFTA.
3. The 20-day deadline is short. By the time a resident buyer realizes they need to file, the clock may already have expired.
4. The form is in Japanese. The official report and explanatory materials are not provided in English. Foreign-language transactional documents must be summarized accurately on the form.

How Japan YES Handles Your FEFTA Filing

Japan YES Property Management offers FEFTA real estate acquisition report filing as a fixed-fee service (¥10,000). We:

• Determine whether your transaction triggers a 第55条の3 filing
• Prepare the report in Japanese with the correct property details
• Submit it to the Bank of Japan within the 20-day deadline
• Provide you with a copy of the filed report for your records

For ongoing support, our tax representative service (納税管理人) handles your property tax obligations, while our mail digitization ensures you never miss a Bank of Japan or tax office notice — wherever in the world you live.

FEFTA is only one of several obligations that apply once you own Japanese property as a non-resident — appointing a tax representative is another. Our FAQ on legal requirements explains what the law expects of overseas owners.

View our plans or contact us to discuss your FEFTA filing requirements.