Can an inherited building burdened with a spousal right of residence be sold? Valuation, buyers, and extinguishment in practice

In short: even a building on which a spousal right of residence has been set up can be sold — the heir who inherited the ownership can sell it. But if the right of residence is registered, it is enforceable against the buyer (Civil Code Article 1031), and the buyer inherits the burden of a spouse who keeps living there. Because the spousal right of residence cannot be transferred to a third party (Civil Code Article 1032, paragraph 2), the usual practice is to have the surviving spouse waive or extinguish the right by agreement, cancel the registration, and then sell the property unencumbered. The cancellation registration is for a judicial scrivener; the capital-gains tax or deemed-gift tax on any consideration for the extinguishment is for a licensed tax accountant; a dispute over the estate division is for an attorney — each engaged as an independent business entity, separately. We (Yotsuba Real Estate Co., Ltd.) confine ourselves to information on the investigation, appraisal and brokerage of the property.

This article is for families who, after inheriting a family home carrying a spousal right of residence, want to sell it. It sets out, from the brokerage side, whether it can be sold, what it is worth, and how the right is removed. The registration and its cancellation go to a judicial scrivener, inheritance tax and the valuation of the right to a tax accountant, and any estate dispute to an attorney. We confine ourselves to information on the property; these are engaged as independent business entities, separately.

Can a building still carrying the right of residence be sold to a third party?

It can. But you have to separate "whose what is being sold."

The spousal right of residence is a right acquired — through estate division, bequest, gift on death, or a family-court adjudication — by a spouse who was living, at the time the inheritance opened, in a building owned by the deceased (Civil Code Articles 1028 and 1029). At that point the ownership of the building itself is often acquired by an heir other than the spouse (a child, for example). Whoever holds the ownership can sell it to a third party; disposing of the ownership is itself free.

The question is what happens to the buyer. If the spouse has the registration of the right of residence, it is enforceable against the acquirer of the building and other third parties (Civil Code Article 1031, paragraph 2, applying Article 605). The buyer thus buys, subject to that burden, a building in which the spouse keeps living — and can neither move in nor demand vacation. Moreover, the spousal right of residence cannot be transferred to a third party (Civil Code Article 1032, paragraph 2); you cannot buy up the right and resell it.

What is sold	Who can sell it	The buyer's position
Ownership of the building (burdened)	The heir who inherited the ownership	Inherits the burden; can neither use it nor demand vacation
The spousal right of residence itself	Cannot be transferred (Art. 1032 (2))	—
Ownership of the land (site)	The heir who inherited the land	Hard to use while the building carries the right; few buyers

For this reason a sale "with the right of residence still attached" is possible in theory but attracts almost no buyers.

How far does an appraisal drop for a burdened property?

There is no fixed discount. The loss of value turns on how many more years the spouse will live there.

The right of residence lasts, in principle, for the spouse's lifetime (Civil Code Article 1030). But it can be fixed for a term — say ten years — by agreement in the estate division, by will, or by adjudication. The market value of the burdened ownership is smaller the longer this term (that is, the younger the spouse), because it is further off before the buyer can use the building freely.

For inheritance tax, the valuation of the right of residence and the burdened ownership is fixed by law (Inheritance Tax Act Article 23-2). From the remaining term, the statutory interest rate and the building's useful life, it computes the value of the right and the value of the ownership net of it (NTA Tax Answer No. 4666). The inheritance-tax valuation and the actual market price are different things, but they share the structure that value shifts with "lifetime or fixed term" and the spouse's age.

Factor affecting value	How it works
Term (lifetime or fixed)	The shorter the fixed term, the less the burdened ownership loses
The spouse's age	For lifetime, the younger the spouse, the smaller the burdened ownership's value
The building's condition and location	Ordinary appraisal factors, counted separately

In an actual market sale, investors willing to buy while burdened are few, and a substantial discount matching the expected yield is the norm. That is exactly why the order below — extinguish by agreement, then sell — is the mainstay of practice. The actual valuation figures are the tax accountant's domain; we speak from the side of marketability and appraisal.

In what order do you extinguish the right by agreement and then sell?

Because the right cannot be transferred, the only way to remove it is for the spouse who holds it to give it up. The practical order is this.

1. The spouse (holder of the right) and the owners of the building and land (the other heirs) discuss the sale plan and how to split the proceeds.
2. The spouse waives the right of residence, or the parties extinguish it by agreement.
3. The cancellation registration of the right of residence is entered (judicial scrivener).
4. The property is sold in the ordinary way, as unencumbered ownership.
5. The sale proceeds are distributed by the arrangement agreed in advance.

Here a tax issue arises. If, during the term, the right is extinguished without consideration (or for a markedly low consideration) and the owner receives the benefit of full unencumbered ownership, the owner may be deemed to have acquired it by gift from the spouse under Inheritance Tax Act Article 9 (deemed gift). Conversely, if the spouse receives consideration for the extinguishment, that consideration may be taxed as the spouse's capital gains. Either way the judgment on the tax amount is the tax accountant's; we do not answer on advantage.

Where the talks do not settle — the spouse will not agree to waive — it becomes a matter of estate division or a rights dispute, which is an attorney's field. Completing the inheritance registration (mandatory from 1 April 2024) before the sale is set out in what to do first when you inherit. For co-owned property or dividing by conversion into cash, see selling co-owned inherited property and selling by conversion into cash.

How does a move to a care home, or the spouse's death, change the sale?

When the spouse's circumstances change, so does the path to extinguishment.

If the spouse dies, the right of residence extinguishes (Civil Code Article 1036, applying Article 597, paragraph 3 — the right ends if the spouse dies during the term). It is not inherited. Because this extinguishment is as the Civil Code provides, no new inheritance or gift tax arises at that point (NTA question-and-answer cases). After extinguishment the owner can sell as unencumbered ownership; the cancellation registration is handled by a judicial scrivener.

If the spouse moves into a care home, that alone does not extinguish the right — a move is not a ground for extinguishment. To sell, the spouse must agree to waive or extinguish it, as in the previous section. The spouse may, with the owner's consent, lease the building to a third party (Civil Code Article 1032, paragraph 3), so letting the building to fund care costs is an option (the right then remains).

If a fixed term expires, the right extinguishes, and this too is treated as expiry as provided, with no new tax arising.

The spouse's situation	What happens to the right	Effect on the sale
Death	Extinguishes (Art. 597 (3) applied); not inherited	Sell unencumbered after cancellation registration
Expiry of a fixed term	Extinguishes	Sell unencumbered after cancellation registration
Move to a care home	Does not extinguish	Needs waiver or agreed extinguishment; or lease with consent
Waiver / agreed extinguishment during the term	Extinguishes (tax issue on whether there is consideration)	Sell after cancellation registration; confirm with a tax accountant

Registration, valuation, tax, disputes — who do you ask?

Selling a building carrying a spousal right of residence overlaps several professionals' fields. The roles divide cleanly.

What you are asking	Who
Setting up / cancelling the right of residence; inheritance registration; ownership transfer	Judicial scrivener
Inheritance tax; capital gains on the consideration; deemed-gift judgment	Licensed tax accountant
Disputes where the estate division or waiver does not settle	Attorney
Investigation, appraisal, brokerage and sale contract of the property	Licensed real estate agent (us)

Registration to a judicial scrivener, computing the tax and judging advantage to a tax accountant, and any dispute to an attorney — this line is fixed by the qualification system and does not move. This division is not a single firm taking everything. Each is engaged as an independent business entity, separately. We neither pay nor accept referral fees or introduction commissions. We handle only the real estate side — the order of the sale and marketability — and proceed on the basis that tax and registration are always confirmed with a licensed professional. Selling inherited property generally is set out in inheritance and real estate.

Frequently asked questions

Q. Can I sell just the ownership first, while the right of residence remains?
A. The sale of the ownership itself is possible. But if the right of residence is registered, it is enforceable against the buyer (Civil Code Article 1031), and the buyer inherits the burden of a spouse who keeps living there. Because the buyer can neither use it nor demand vacation, buyers are limited to investors buying subject to the burden, at a substantial discount. In practice the right is extinguished first.

Q. Can I buy the right from the spouse and sell everything together?
A. No. The spousal right of residence cannot be transferred to a third party (Civil Code Article 1032, paragraph 2). To remove it, the spouse must waive it or the parties must extinguish it by agreement. Because the tax treatment differs according to whether consideration is paid, confirm with a tax accountant.

Q. Once the spouse dies, can the building be sold as is?
A. The spouse's death extinguishes the right of residence (Civil Code Article 1036 applying Article 597, paragraph 3). It is not inherited. After extinguishment the owner can sell as unencumbered ownership, with the cancellation registration handled by a judicial scrivener. Because this extinguishment is as the Civil Code provides, no new inheritance or gift tax arises (NTA question-and-answer cases).

Q. I heard that extinguishing the right mid-term triggers gift tax. Is that true?
A. If the right is extinguished without consideration (or for a markedly low consideration) and the owner receives the benefit of full ownership, the owner may be deemed to have received a gift under Inheritance Tax Act Article 9. Conversely, if the spouse receives consideration, it becomes the spouse's capital-gains issue. Either way the judgment on the amount is the tax accountant's. We do not answer on whether tax applies.

Sources (primary)

• e-Gov "民法" (Civil Code) — Act No. 89 of 1896. Arts. 1028–1029, creation of the spousal right of residence; Art. 1030, term is in principle the spouse's lifetime; Art. 1031, the building owner's duty to register and enforceability against third parties (applying Art. 605); Art. 1032 (2), non-transferability, and (3), use by a third party with the owner's consent; Art. 1036, application of Art. 597 (3) (termination on the spouse's death). The right was created by Act No. 72 of 2018, in force from 1 April 2020. Accessed 8 September 2026.
• e-Gov "相続税法" (Inheritance Tax Act) — Act No. 73 of 1950. Art. 9, deemed gift where a benefit is received without consideration; Art. 23-2, valuation of the spousal right of residence and the like. Accessed 8 September 2026.
• NTA Tax Answer No. 4666, "Valuation of the spousal right of residence and the like" — method of inheritance-tax valuation of the right of residence, the building, and the site-use right. Accessed 8 September 2026.
• NTA question-and-answer cases, "Where the spousal right of residence is extinguished by agreement, etc." — extinguishment on death or expiry is as the Civil Code provides, so no tax; an agreed extinguishment mid-term without consideration is a deemed gift under Inheritance Tax Act Article 9; a spouse receiving consideration has capital gains. Accessed 8 September 2026.

Whether tax (capital gains or deemed gift) arises on extinguishment and in what amount, and the valuation of the right and the ownership, depend on the term, the spouse's age, whether there is consideration, and the state of the building and site. This article does not assess any individual tax position or valuation figure. Setting up and cancelling the right, inheritance registration and ownership transfer belong to a judicial scrivener; inheritance tax, capital gains and the deemed-gift judgment to a licensed tax accountant; disputes where the estate division or waiver does not settle to an attorney. We confine ourselves to information on the investigation, appraisal and brokerage of the property.

This article is general information. It does not advise on or guarantee any individual legal or tax decision. Property investigation, brokerage and sale or lease contracts are undertaken by Yotsuba Real Estate Co., Ltd. (licensed real estate agent); the preparation of documents for submission to public authorities is undertaken by Yotsuba Administrative Scrivener Office — two independent business entities, engaged separately. Tax belongs to a licensed tax accountant, registration to a judicial scrivener, disputes to an attorney. We neither pay nor accept referral fees.

About the author

Joji Uramatsu — licensed real estate transaction specialist (Tokyo Governor registration No. 293544) and administrative scrivener (registration No. 25087022). Representative Director, Yotsuba Real Estate Co., Ltd. (licensed real estate agent, Tokyo Governor (1) No. 113304); principal, Yotsuba Administrative Scrivener Office. Kohinata, Bunkyo, Tokyo, about five minutes' walk from Myogadani station. Property and paperwork are put on the same table. Full profile: author page.