How do you sell an inherited house or flat on a fixed-term (general definite) land lease?

In short: an inherited house or flat on a general definite land lease can be sold. But unlike an ordinary land lease (which is renewed), a general definite land lease (Article 22 of the Act on Land and Building Leases) is not renewed — when the term expires, the building is, in principle, demolished and the land returned bare to the lessor. So the shorter the remaining term, the harder it is to find a buyer, and the more it affects the price. Selling requires, in principle, the lessor's consent; the inheritance registration is for a judicial scrivener and tax for a licensed tax accountant.

You inherited a house or flat from a parent that turns out to be "on a fixed-term land lease" — the land is not yours, and the contract says "no renewal, returned at the end of the term." Can it be sold, or must you hold it to expiry? This article is for heirs who have inherited a detached house or flat on a general definite land lease and are torn between selling and holding, setting out from the statutes the difference from an ordinary lease, how the remaining term bites, consent, and the division of tax work. It takes the view of the leaseholder who inherited the building and the lease — not the landowner (holder of the underlying land).

How does an ordinary land lease differ from a general definite land lease?

The biggest difference is whether it renews, or ends at the term with the land returned bare.

The 借地借家法 (Act on Land and Building Leases, Act No. 90 of 1991) provides two systems for a land lease for the purpose of owning a building. One is the ordinary land lease (Article 3 onward — at term's end, if a building stands, the leaseholder may request renewal, and the lessor's refusal requires just cause). The other is the definite land leases, which do not renew.

What is generally called a "general definite land lease" is the one under Article 22 (the statutory heading is "definite land lease"): set with a term of 50 years or more, defining three special terms — (1) no renewal of the contract, (2) no extension of the term by rebuilding, and (3) no building-purchase demand under Article 13 — made in a notarised or other written form (including an electromagnetic record). When the term expires, the leaseholder in principle demolishes the building and returns the land bare to the lessor. There is also the business-use definite land lease (Article 23 — a term of 10 years or more but under 50 years, made by notarial deed, solely for owning a business building) and the building-transfer-special-term lease (Article 24 — a special term transferring the building to the lessor after 30 years or more).

Lease type	Basis	Renewal	At term's end
Ordinary land lease	Act Art. 3, 5	Yes (renews absent just cause)	Continues readily if a building stands
General definite land lease	Act Art. 22	No	Building demolished, land returned bare, in principle
Business-use definite land lease	Act Art. 23	No	Use limited to business
Building-transfer-special-term lease	Act Art. 24	—	Special term to transfer the building to the lessor

Which type it is is decided by the contract wording and the date of setting. Before you consider selling, check the contract for "definite land lease," "no renewal" and "bare return at term's end." Consent and the order of a sale for an ordinary lease are covered in this article on selling an inherited building on a leased plot. For handling inherited property overall, see inheritance property consultation.

How does a short remaining term affect the sale price?

The remaining term is, directly, "how many more years you can live in or let the building." The shorter it is, the lower the price.

Because a general definite land lease ends with a bare return, the value to a buyer is limited to "the value of use over the years that remain." Inherit a 50-year definite-lease flat 30 years after it was set, and a buyer has roughly 20 years of use left. Three further points push the price down.

First, the mortgage. Lenders generally require the loan term to fit within the remaining lease term, so a short remaining term makes it hard for buyers to take a long loan, narrowing the pool who can buy. Second, the cost of demolishing the building at term's end. As a bare return is the rule, who bears the demolition cost and how enters the price negotiation. Third, the deposit (guarantee money). A definite lease may involve a deposit paid at the outset, and how the claim for its return is carried over in the sale must be written into the contract.

Factor on price	Content
Remaining term	The shorter, the fewer "usable years" and the lower the price
Mortgage	Loan term constrained by the remaining term, narrowing the buyer pool
Demolition cost	Cost of the bare return at term's end
Deposit / ground rent	Carry-over of the deposit-return claim; the level of ground rent and its revision clause

Note that for inheritance tax the valuation of definite land leases is done under the Property Valuation Basic Circular according to the remaining term and so on, but this taxable valuation and the price actually obtainable on the market do not match. This article gives no valuation or tax figure and treats inheritance-tax valuation and capital-gains tax as matters to confirm with a licensed tax accountant. We do not lead with an appraisal figure; we read the lease contract, the ground-rent record and the remaining term first, then build the terms.

How are the lessor's consent and the transfer-consent fee handled?

Inheriting it needs no consent, but selling to a third party does.

Under Article 896 of the 民法 (Civil Code, Act No. 89 of 1896), an heir succeeds to all rights and duties belonging to the decedent's property. A land lease is included, so inheritance itself needs no lessor's consent. Selling is different: sell the building on the leased land to a third party and the land lease moves with it, and Article 612, paragraph 1 provides that "a lessee may not assign the leasehold ... without the lessor's consent," so the lessor's consent is needed here. This is the same for an ordinary lease and for a definite lease.

The "transfer-consent fee (name-change fee)" paid in return has no uniform statutory standard. It is sometimes described as a fixed proportion of the leasehold value, but no public uniform standard backing that proportion can be confirmed, so this article does not assert an amount or proportion. Where the lessor withholds consent, there is the route of land-lease non-contentious proceedings (Article 19, paragraph 1), in which the court seeks a permission substituting for consent and decides both whether to permit and the amount of any property payment.

Situation	Lessor's consent	Basis
Inherit it	Not needed	Civil Code Art. 896 (universal succession)
Sell to a third party (building + lease)	Needed	Civil Code Art. 612 (1)
Where the lessor withholds consent	Court permission can be sought	Act Art. 19 (1) (non-contentious proceedings)

Non-contentious proceedings are a court procedure; the court decides both permission and amount case by case. We do not judge this. Where negotiations with the lessor sour into a dispute, or for the non-contentious application, we guide you to engage an attorney directly. The line between when consent is and is not needed is also set out in this article.

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Who handles the inheritance registration and the tax?

First, the building's inheritance registration. A land lease itself is often unregistered, but under Article 10, paragraph 1 of the Act on Land and Building Leases, a leaseholder who owns a registered building on the land can assert the lease against a third party. The foundation of that force is the building registration, so if the building remains in the deceased's name the foundation is shaky. For a definite-lease flat, the sectional owners hold the site's lease as a co-ownership-in-quasi, and you sell the exclusive part (the building) together with the right to use the site.

Inheritance registration is also a duty. Article 76-2, paragraph 1 of the 不動産登記法 (Real Property Registration Act, Act No. 123 of 2004) requires an heir who acquires ownership by inheritance to apply within three years of learning of the inheritance and the acquisition of ownership (in force 1 April 2024). The duty and the order of a sale are covered in this article on selling the family home without completing inheritance registration.

Role	Party
Brokerage of the building sale; investigating the lease contract, remaining term and conditions	Yotsuba Real Estate Co., Ltd. (licensed real estate agent, Tokyo Governor (1) No. 113304)
Preparing documents — the estate-division agreement, collecting family registers	Yotsuba Administrative Scrivener Office
Inheritance registration of the building; registration of the lease	Judicial scrivener
Inheritance-tax and capital-gains filings; valuation of the definite land lease	Licensed tax accountant
Dispute or non-contentious proceedings where negotiations with the lessor sour	Attorney

Yotsuba Real Estate Co., Ltd. and Yotsuba Administrative Scrivener Office are each an independent business entity, engaged separately and directly by you. We neither pay nor accept referral fees or introduction commissions. The judicial scrivener, tax accountant and attorney are each engaged by you directly too. Consultation is free of charge.

Frequently asked questions

Q. Can a flat on a general definite land lease be sold at all?
A. Yes. But a general definite land lease (Act Art. 22) is not renewed, and at term's end the land is, in principle, returned bare. A buyer can use it only over the remaining term, and the mortgage term tends to be constrained to that range, so the shorter the remaining term, the harder it is to find a buyer and the more the price is affected. Check the term and the setting date in the contract first.

Q. How does the sale differ between an ordinary lease and a general definite lease?
A. An ordinary lease is renewed (Act Art. 3, 5) and, with a building standing, tends to hold its value. A general definite lease (Art. 22) is not renewed and ends at the term, so the shorter the remaining term the more the price is affected. Which type it is is decided by the contract wording and the setting date. The premise of saleability differs, so check the contract first.

Q. Does selling a building on a definite lease need the lessor's consent?
A. Inheriting it needs no consent (Civil Code Art. 896), but selling to a third party involves assigning the lease, so under Civil Code Art. 612 (1) the lessor's consent is needed. This is the same for a definite lease. There is no uniform statutory standard for the consent fee, and where the lessor withholds consent there is the route of court permission substituting for consent (Act Art. 19 (1)).

Q. If the term is near its end, who bears the demolition cost of the building?
A. A general definite land lease in principle has the leaseholder demolish the building and return the land bare at term's end, so who bears the demolition cost becomes a point in the price negotiation. Who bears it and how depends on the contract terms and the sale conditions; there is no single answer. Build the terms case by case after checking the bare-return clause and the deposit treatment in the contract. Confirm specific tax and demolition estimates with a licensed tax accountant and a demolition contractor.

Sources (primary)

• e-Gov "借地借家法" (Act on Land and Building Leases) — Act No. 90 of 1991. Art. 3 (term); Art. 5 (1) (renewal request); Art. 10 (1) (force of the lease against third parties); Art. 13 (1) (building-purchase demand); Art. 19 (1) (permission for assignment or sublease of the leasehold); Art. 22 (definite land lease / general definite land lease); Art. 23 (business-use definite land lease); Art. 24 (building-transfer-special-term lease). Promulgated 4 October 1991. Current text as amended by Act No. 48 of 2022, in force 21 May 2026. Accessed 22 September 2026.
• e-Gov "民法" (Civil Code) — Act No. 89 of 1896. Art. 612 (1) (restriction on assignment and sublease of a leasehold); Art. 896 (general effect of inheritance). Last amended by Act No. 45 of 2026, reflecting provisions in force as of 24 June 2026. Accessed 22 September 2026.
• e-Gov "不動産登記法" (Real Property Registration Act) — Act No. 123 of 2004. Art. 76-2 (1) (application for transfer registration on inheritance, within three years). In force 1 April 2024. Accessed 22 September 2026.
• Ministry of Land, Infrastructure, Transport and Tourism, "Explanation of definite land leases" — the general definite land lease (term of 50 years or more), the business-use definite land lease, and the building-transfer-special-term lease. Accessed 22 September 2026.

No uniform standard for the level of the transfer-consent fee or renewal fee, or the proportion of leasehold to underlying-land value, can be confirmed in primary sources, so this article gives no amount. For inheritance tax, the valuation of definite land leases follows the Property Valuation Basic Circular according to the remaining term and so on, but the taxable valuation and the market price do not match; confirm specific valuation and tax with a licensed tax accountant. This article gives no figures. Land-lease non-contentious proceedings (an application under Act Art. 19) are a court procedure; the court decides both permission and the amount of any property payment. This article does not judge any individual case. This article is general information and does not present any individual legal judgment. The building's inheritance registration is by a judicial scrivener; inheritance-tax and capital-gains filings and the valuation of the definite land lease by a licensed tax accountant; disputes with the lessor and non-contentious proceedings by an attorney. Property investigation, brokerage and the sale contract are undertaken by Yotsuba Real Estate Co., Ltd. (licensed real estate agent); documents such as the estate-division agreement by Yotsuba Administrative Scrivener Office — two independent business entities engaged separately and directly. There are no 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. For inherited property, the contract, the registration and the deadlines are put on the same table. Full profile: author page.