Kobe Property Tax: Proposed Vacancy Tax for Condominiums

Kobe City is considering a new Kobe Property Tax for condominium units that have no regular occupants. Often called a “vacancy tax,” the proposal aims to bring more homes in central Kobe into active use.

The city has not yet approved the tax. It has also not decided the starting date, tax rate, or calculation method. However, the proposal could eventually affect investors, second-home owners, and overseas property owners.

Why Is Kobe Considering a Vacancy Tax?

Kobe restricts the construction of new high-rise residential buildings around Sannomiya. At the same time, approximately 20% of units in high-rise condominiums in this area have no registered residents.

A unit without a registered resident is not necessarily vacant. However, many of these properties are believed to be investment units or second homes that are not regularly occupied.

This situation can reduce the number of homes available to people who genuinely want to live in Kobe. It may also place further pressure on housing prices.

Unoccupied Units Can Create Management Problems

The issue goes beyond housing availability. Condominium associations depend on owners working together to make important decisions.

For example, owners may need to approve major repairs, maintenance plans, and construction work. When owners cannot be contacted or show little interest in building management, reaching an agreement becomes more difficult.

Real estate industry organizations have reported cases in which investment-property owners could not be reached. As a result, condominium associations struggled to obtain consent for repairs or carry out necessary work.

Over time, poorly maintained buildings may fall into serious disrepair. This can affect residents, neighboring properties, and the surrounding community.

The Proposal May Cover More Than High-Rise Buildings

At first, discussions focused mainly on high-rise condominiums. However, further research showed that the problem was more widespread.

Within the Urban Function Promotion District around Sannomiya, 14.0% of units in condominium buildings with at least 100 units had no registered residents. This finding led experts to begin studying broader measures in 2025.

In August 2026, an expert panel recommended covering condominium units throughout the district. It advised the city not to limit the measure to high-rise buildings. Kobe City is now considering an ordinance based on this recommendation.

Has the Kobe Property Tax Been Approved?

No. The proposed Kobe Property Tax has not been formally adopted.

The city still needs to decide:

• When the tax would take effect
• How the tax rates would be set
• How the amount would be calculated
• Which properties and owners would fall within its scope

Therefore, property owners do not currently have any new tax obligations under this proposal.

Could Overseas Property Owners Be Affected?

Possibly. If the final system applies to residential units without actual occupants, overseas owners may also fall within its scope.

For example, someone who lives outside Japan and keeps a second home in Kobe may become subject to the tax. It could also affect overseas investors who leave condominium units unoccupied for long periods.

However, the final ordinance will determine exactly which properties and owners are covered.

Kyoto Has Already Adopted a Similar Tax

Kobe is not the only Japanese city considering this type of measure.

Kyoto City has already enacted its Non-Resident Housing Utilization Promotion Tax. It covers vacant homes, vacation homes, and second homes. Taxation is scheduled to begin in fiscal year 2030.

Other municipalities facing housing shortages or vacant-property problems may consider similar policies in the future.

What Could the Tax Mean for Property Owners?

An eventual Kobe Property Tax could create an additional financial burden for owners of investment properties and second homes. Owners may need to reconsider whether leaving a property vacant remains worthwhile.

At the same time, housing forms part of a city’s basic infrastructure. Homes support daily life, local businesses, and active communities.

Repeatedly buying and selling residential properties without anyone living in them may limit the effective use of Kobe’s housing stock. We believe that a carefully designed tax could encourage owners to live in, rent out, or sell properties that would otherwise remain unused.

Such a system could help Kobe:

• Increase the number of homes available to residents
• Prevent urban hollowing-out
• Support effective condominium management
• Protect neighborhoods from building deterioration
• Maintain the city’s vitality and long-term value

Conclusion

The proposed Kobe Property Tax remains under consideration. The city has not finalized its implementation date, tax rates, or calculation method.

Nevertheless, the proposal is important for anyone who owns or plans to purchase a condominium in central Kobe. Investors, second-home owners, and overseas buyers should closely follow future announcements from Kobe City.

Until the city adopts a final ordinance, owners should treat the measure as a proposal rather than an existing tax obligation.