Explaining leasehold-land property (shakuchiken) to clients in China and Taiwan — ordinary vs. fixed-term leaseholds and what to check on acquisition

In short: A leasehold (shakuchiken) is the right to rent another person's land and own a building on it. Unlike freehold ownership, rent, a contract term and the landowner's consent follow it. An ordinary leasehold can be used for a long time through renewal; a fixed-term leasehold ends at expiry, when the land is returned. When buying, first confirm the remaining term, the rent, whether consent and a consent fee are needed, and whether a home loan can be arranged.

This article is for real estate companies and asset-management advisers who introduce Japanese property to clients in mainland China and Taiwan, giving them material to explain the uniquely Japanese right of "leasehold" in their own language, drawn from the Land and Building Lease Act and National Tax Agency materials. We handle property information, brokerage, and negotiation with the landowner (within the scope of brokerage). Registration of the transfer of a leasehold lies with a judicial scrivener; disputes over rent, renewal or eviction and petitions in leasehold non-contentious cases lie with a lawyer; and inheritance-tax valuation and capital-gains-tax estimates lie with a tax accountant. These are independent entities from Yotsuba Real Estate Co., Ltd. (四葉不動産株式会社), engaged separately for each service under a separation-of-engagement arrangement. For working with local professionals, see also working with local professionals on Japanese property.

What is a leasehold, and how does it differ from freehold ownership?

A leasehold is the right to rent another person's land for the purpose of owning a building on it (a superficies right or a land lease). The land belongs to the landowner; the leaseholder pays rent to use the land and owns only the building on it under their own name. That the land and the building have separate owners is the greatest difference from freehold ownership (where both land and building are your own).

The Land and Building Lease Act (Act No. 90 of 1991) defines a leasehold as "a superficies right or a land lease for the purpose of owning a building." In Japan, if you register the building on the leased land under your own name, you can assert the land right even against third parties, so leaseholder protection is strong. For clients in mainland China and Taiwan, explaining it as close to a "land-use right" (the land belongs to the state or another, the building is yours) often helps, while the handling of renewal and term differs by system and must be checked against the Japanese statute.

Point	Freehold ownership	Leasehold
Right to the land	Yours	The landowner's (rented)
Right to the building	Yours	Yours
Ongoing cost	None (only fixed-asset tax)	Rent (a renewal fee / consent fee may also arise)
Term	None	There is a contract term (ordinary leaseholds renewable; fixed-term leaseholds end at expiry)
Home loan	Easy to arrange	Can be harder (the lender may require the landowner's consent)

The Act came into force on 1 August 1992. Leaseholds set before that are in principle still governed by the old Leasehold Act (Act No. 49 of 1921), with the post-renewal term and the like handled differently from the current law. The older the leasehold, the more you must first confirm which law applies (the final judgment on applicable law is made by a lawyer).

How does the exit differ between an ordinary and a fixed-term leasehold?

An ordinary leasehold can be used almost indefinitely because it can be renewed, whereas a fixed-term leasehold has no renewal and the land is returned to the landowner at expiry. Because the exit (what happens in the future) is the exact opposite, you must always tell them apart before buying.

The term of an ordinary leasehold is 30 years, and the contract may set a longer period (Art. 3). The post-renewal term is 20 years for the first renewal and 10 years thereafter (Art. 4). Even when the term expires, if the leaseholder requests renewal and there is a building on the land, it is deemed renewed on the same terms unless the landowner objects without delay on justifiable grounds (Art. 5). A special clause disadvantageous to the leaseholder that contravenes these is void (Art. 9).

A fixed-term leasehold is a leasehold set for a term of 50 years or more under which no renewal and no building-buyback request are provided; this special clause must be made in writing, such as by notarial deed (Art. 22). For those whose purpose is owning a building solely for business use, there are fixed-term leaseholds for business of 30 years or more but under 50 years, or 10 years or more but under 30 years, set by notarial deed (Art. 23). A fixed-term leasehold ends at expiry and the land is in principle returned as vacant land, so the shorter the remaining term, the fewer the years the building can be used.

Type	Provision	Term	Renewal	At expiry
Ordinary leasehold	Arts. 3, 4, 5	30 years or more (post-renewal 20 → 10 years)	Yes (statutory renewal exists)	Continues if conditions met
Fixed-term leasehold	Art. 22	50 years or more	None	Returned in principle as vacant land
Fixed-term leasehold for business	Art. 23	10 years or more, under 50 years	None	Returned in principle as vacant land

When buying a leasehold-land property, what should you check? (remaining term, rent, consent fee, loan)

The first things that matter are four: (1) the remaining term, (2) the amount of rent and whether it is revised, (3) whether the landowner's consent and a consent fee are required, and (4) whether a home loan is available. Unlike a freehold property, getting these wrong leads straight to exit problems such as "few usable years after purchase" or "cannot resell because the landowner's consent cannot be obtained."

The remaining term can be extended by renewal for an ordinary leasehold, but for a fixed-term leasehold it ends at expiry, so the years to expiry directly affect value. Rent is a monthly ongoing cost; check whether the contract has a revision clause. For a loan, where a building on leased land is used as collateral, lenders often require the landowner's consent (consent to transfer and to the creation of security), so the options are narrower than for a freehold property. When a non-resident in the Chinese-speaking world is the buyer, reporting under the Foreign Exchange and Foreign Trade Act and tax confirmation also overlap (a related point in reporting and remittance for overseas owners).

Item to check	Point to watch	Whom to consult
Remaining term	Ordinary or fixed-term; years to expiry	Us (property survey) / lawyer (applicable-law judgment)
Rent	Monthly amount, revision clause, arrears	Us / landowner
Consent and consent fee	Whether consent is needed for transfer, extension/rebuild	Us (negotiation within brokerage) / lawyer (court = leasehold non-contentious case)
Home loan	Whether the lender finances leaseholds; whether a consent letter is needed	Us / lender

In which situations is the landowner's consent required? What is the rough consent fee?

The landowner's consent is generally required when you sell (transfer to a third party) a leasehold, when you extend, rebuild or renovate the building, or when you sublet. It depends on the contract, but inheriting and succeeding to it as-is does not itself require consent.

To transfer or sublet a leasehold (land lease) to a third party, the landowner's consent is in principle required. Where the landowner does not consent, the leaseholder may petition the court for "permission in lieu of the landowner's consent," and where the landowner withholds consent despite there being no risk of disadvantage to them, the court may grant permission in lieu of consent (Art. 19; a so-called leasehold non-contentious case). This petition and procedure are a lawyer's area; what we do is limited to negotiation with the landowner within the scope of brokerage.

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There is no statutory standard for consent fees (name-change fees, rebuild-consent fees, renewal fees, etc.). They are settled by agreement with the landowner and by individual circumstances, and the figures cited as customary vary widely. The following are only in the "it is sometimes said" range; the actual amount is fixed by negotiation with the landowner and, if a dispute arises, by a lawyer's judgment (all figures are unverified).

Name of consent fee	Figure often cited (no legal basis; unverified)	Note
Transfer-consent fee (name-change fee)	Said to be roughly 10% of the leasehold price	Paid to the landowner on sale
Rebuild/renovation-consent fee	Said to be a few percent of the vacant-land price	When rebuilding the building
Renewal fee	By contract and local custom	There may be no legal obligation to pay

Avoid asserting as if there were a legal going rate for consent fees. Telling Chinese-speaking clients that "a consent fee is not a fixed rate like a tax, but a cost decided by negotiation with the landowner" helps prevent misunderstanding.

How are leaseholds treated on sale or inheritance?

A leasehold can be bought and sold as property and is succeeded to on inheritance. Inheriting and succeeding to a leasehold as-is does not require the landowner's consent, but selling it to a third party in principle does. For inheritance-tax valuation, a monetary value is recognised in the leasehold too.

For inheritance and gift tax, the value of a leasehold is found by multiplying the land's value as self-used (vacant) land by the "leasehold ratio." The leasehold ratio is set by area and shown on the roadside-land-price map and the valuation-multiplier table (National Tax Agency Tax Answer No. 4611, "Valuation of leaseholds"; accessed 12 October 2026). Fixed-term leaseholds and the like are in principle valued on the basis of the economic benefit the leaseholder receives and its term. The specific valuation and tax are a tax accountant's area, which we do not do. The estimate of capital-gains tax on a sale gain is likewise a tax accountant's.

When selling a building on leased land together with the leasehold, the landowner's consent and the transfer registration of the building and leasehold are required. Registration is handled by a judicial scrivener. We also cover the overall picture of mandatory inheritance registration and sale in inheritance registration becoming mandatory and selling, and how to sell a family home where multiple-stage inheritance has increased the heirs in selling a family home where multiple-stage inheritance increased the heirs. See also inherited-property consultations and, for investment and commercial property, investment and commercial real estate consultations. We handle the property survey, brokerage and negotiation with the landowner within the scope of brokerage; transfer registration lies with a judicial scrivener, valuation and tax with a tax accountant, and disputes and leasehold non-contentious cases with a lawyer — each an independent entity, engaged separately. We proceed by direct contract, direct invoice and direct payment; no referral or lead-transfer fees are exchanged.

Frequently asked questions

Q. I hear a leasehold is cheaper than freehold but harder to sell. Why?
A. Because the land is not yours, and rent, a contract term and the landowner's consent follow it. In particular, selling to a third party in principle requires the landowner's consent (Art. 19), and a home loan can be harder to arrange. The price is lower than freehold, but confirming the exit is more important.

Q. What happens to a fixed-term leasehold property when the term ends?
A. A fixed-term leasehold has no renewal; it ends at the expiry of the term, and the building is in principle demolished and the land returned to the landowner as vacant land (Arts. 22, 23). The remaining years to expiry are the usable period, so always confirm the remaining term before buying.

Q. If the landowner will not consent to a sale of the leasehold, can it not be sold?
A. Where the landowner withholds consent despite no risk of disadvantage, you may petition the court for permission in lieu of consent (Art. 19, a leasehold non-contentious case). This petition is a lawyer's area. What we can do is negotiation within the scope of brokerage; the court procedure is separated to a lawyer under a separate contract.

Q. What is the market rate for a consent fee?
A. There is no statutory standard for consent fees; they are decided by agreement with the landowner and by individual circumstances. It is sometimes said to be "about 10% of the leasehold price," but that is only a customary guide, varies widely, and is unverified. It is not a fixed rate, so do not assert it — confirm it through negotiation with the landowner.

Primary sources

• Land and Building Lease Act (Act No. 90 of 1991), Arts. 3, 4, 5, 9, 19, 22, 23 / 借地借家法 (Art. 3 = 30-year term; Art. 4 = 20 years on renewal, 10 years thereafter; Art. 5 = renewal request and statutory renewal; Art. 9 = mandatory provision; Art. 19 = permission in lieu of consent (leasehold non-contentious case); Art. 22 = fixed-term leasehold, 50 years or more, in writing such as notarial deed; Art. 23 = fixed-term leaseholds for business, by notarial deed. Accessed 12 October 2026)
• National Tax Agency, Tax Answer No. 4611, "Valuation of leaseholds" / 国税庁 No.4611 (value of a leasehold = self-used-land value × leasehold ratio; the ratio is shown on the roadside-land-price map and valuation-multiplier table; fixed-term leaseholds and the like are valued on economic benefit and term. Law etc. as of 1 April 2026; accessed 12 October 2026)

Updated and additional sources checked on 12 October 2026. The provisions of the Land and Building Lease Act were checked in the consolidated statute text on e-Gov. The Act's commencement date (1 August 1992) and the applicability of the old Leasehold Act, the amounts and customs for consent fees, renewal fees and rent, and the availability of a loan for an individual property vary by case and so are not asserted here but left as unverified; the applicable-law judgment is confirmed by a lawyer, valuation and tax by a tax accountant, and financing by the lender. Publication remains held pending qualified review.

This article provides general information and does not present individual legal conclusions, determinations of rights, or tax conclusions. Confirmation by the competent authorities and qualified professionals is required. Yotsuba Real Estate Co., Ltd. (四葉不動産株式会社), 四葉行政書士事務所, 四葉社会保険労務士事務所 and other specialists (judicial scrivener, tax accountant, lawyer) are independent entities, engaged separately for each service. We proceed by direct contract, direct invoice and direct payment; no referral or lead-transfer fees are exchanged. Transfer registration of a leasehold lies with a judicial scrivener, inheritance-tax valuation and capital-gains-tax estimates with a tax accountant, and disputes over rent, renewal and eviction and leasehold non-contentious cases with a lawyer. The initial property consultation is free; confirm each professional's scope and fees with that provider.

Author

Joji Uramatsu (浦松 丈二), real estate transaction specialist (Tokyo Governor registration No. 293544) and administrative scrivener (registration No. 25087022); representative director of Yotsuba Real Estate Co., Ltd. (四葉不動産株式会社; Real Estate Brokerage, Tokyo Governor (1) No. 113304) and representative of 四葉行政書士事務所. In Kohinata, Bunkyo-ku, Tokyo, about five minutes' walk from Myogadani Station. Supporting document provision in traditional and simplified Chinese, he organises the points to check on the uniquely Japanese right of leasehold for Chinese-speaking buyers and local professionals in their own language. Registration, valuation, tax and dispute judgments are assigned to the respective providers. Author profile.