Utilizing Vacant Houses (Detached/Old): Comparing Selling, Renting, and Minpaku

What should you do with your inherited family home or an old detached house you no longer live in? Sell it, rent it out, or turn it into a minpaku (private lodging)? Although there are many options, which you choose greatly affects eligibility for tax exemptions, annual fixed asset tax, and the amount of effort required.

This article compares three ways to utilize vacant houses (detached/old) from four points of view: fixed asset tax, the 30 million yen special deduction, market rental rates for detached houses, and minpaku regulations. Rental rates are aggregated from Urbalytics listing data for four Tokyo stations.

Key Points of This Article

• The amended Vacant House Act effective December 13, 2023, newly defines “mismanaged vacant houses,” which lose the fixed asset tax residential land special exemption (such as 1/6 of the taxable base for areas up to 200㎡) once the municipal mayor issues a recommendation (Ministry of Land, Infrastructure, Transport and Tourism).
• The 30 million yen special deduction when selling an inherited vacant house requires the building to have been constructed on or before May 31, 1981, and sold by December 31, 2027, among other requirements; using the house for rental or minpaku after inheritance disqualifies it (National Tax Agency, law as of April 1, 2026).
• The median asking rent for detached houses at four Tokyo stations ranged from 165,000 yen to 260,000 yen (Urbalytics, listings from October 2025 to October 2026, with 23 to 42 listings each).

Costs of Leaving Vacant Houses Untended: Fixed Asset Tax and the Amended Vacant House Act

If you keep a vacant house unused, you continuously bear fixed asset tax and management burdens. Land with a residence qualifies for the “residential land special exemption,” reducing the taxable base for fixed asset tax: 1/6 for up to 200㎡ and 1/3 for the area beyond that (Article 349-3-2 of the Local Tax Act).

This exemption has expanded scenes where it can be removed since 2023. The law amended on June 14, 2023, effective December 13, 2023 — "Act for Partial Revision of the Act on Special Measures Concerning Promotion of Smooth Supply of Vacant Houses” — classifies neglected vacant houses prone to becoming “specified vacant houses” as “mismanaged vacant houses,” enabling municipal mayors to issue guidance or recommendations. Mismanaged vacant houses receiving recommendations lose eligibility for the residential land special exemption (MLIT Overview of Vacant House Law Amendments). Highly dangerous “specified vacant houses” also lose this exemption upon recommendation.

Indicators include broken windows, overgrown weeds, deteriorated exterior walls, etc. If managing remotely is difficult, arranging regular inspections and ventilation, even temporarily while deciding policy, can lower risk of official instructions.

Selling: Requirements and Deadlines for the 30 Million Yen Special Deduction

The first item to confirm when selling is the "Special Deduction on Capital Gains for Inherited Residential Property (Vacant House)." If requirements are met, up to 30 million yen can be deducted from capital gains (National Tax Agency Tax Answer No. 3306, as of April 1, 2026). The main requirements are:

• The building was constructed on or before May 31, 1981, and is not registered as a sectional ownership building
• No person other than the deceased occupant had lived there immediately before inheritance
• Neither business use, renting, nor residence has been utilized from inheritance until sale
• The sales price is 100 million yen or less
• The sale is completed by December 31 of the year three years after the inheritance date and by December 31, 2027 (Reiwa 9)
• Seismic retrofitting or demolition is performed (for sales on or after January 1, 2024, this may also be done by the buyer by February 15 of the year following the sale)

For sales on or after January 1, 2024, if there are three or more heirs, the deduction per person is 20 million yen. Because of the third requirement, using the property even once as rental or minpaku after inheritance negates this special deduction. Thus, choosing to "rent before selling" may be disadvantageous tax-wise. Confirm applicability with a tax office or tax accountant.

The sale methods for vacant houses that are difficult to sell — such as those not eligible for rebuilding or with leasehold rights — are explained in Our article on selling properties with no rebuilding rights, leasehold, or old buildings.

Renting: Rental Market Rates for Detached Houses

Renting offers monthly rental income and allows the property to maintain its qualification for the residential land special exemption as a dwelling. However, old houses often require renovation costs, and selling or rebuilding becomes difficult while tenants are in place.

As an indication of detached house rents, Urbalytics aggregated rental listings for detached houses from October 2025 to October 2026 by station below.

Source: Urbalytics Rental Data (Detached Houses). Aggregated asking rents from October 2, 2025, to October 2, 2026. Duplicate listings at the same address, area, and rent were consolidated; outliers in rent per ㎡ excluded. These are asking rents, not concluded lease rents. Aggregation date: October 2, 2026.

Even within the same station, there is a wide difference between the 25th and 75th percentile, showing that rent varies greatly by building age, size, and facilities. Nerima Station had only nine listings in the same period and was excluded due to insufficient sample size. For old houses, it is safest to assess rental levels post-renovation by comparing nearby listing and leasing examples before committing to renovation costs.