Leave Your Minpaku Management to the Experts
Free Online ConsultationPlenty of property owners dream of running their rental beyond the 180-day cap set by Japan’s Minpaku Law (the Private Lodging Business Act). Under this law, annual operating days are capped at 180, and that ceiling can feel like a hard wall for anyone hoping to push occupancy—and revenue—higher. But if you dig into the legal framework, you’ll find there are perfectly legitimate ways to break past that limit.
In this article, we’ll walk through three legal strategies for exceeding the 180-day cap under the Minpaku Law. Each comes with its own pros, cons, and cost structure, so it’s essential to figure out which option actually fits your property and circumstances. Trying to stretch your operating days without a plan can land you in serious trouble—administrative penalties or worse. The smartest path to maximizing revenue is understanding the rules properly and following the correct procedures.
Below, we’ll break down each option one by one: what it involves, the requirements for applying, rough cost estimates, and key things to watch out for. Start by getting the big picture, then think about how it applies to your own property.
The Basics: What You Need to Know Before Trying to Beat the 180-Day Rule
The Private Lodging Business Act (commonly known as the Minpaku Law) took effect in June 2018, creating a framework that lets ordinary residential properties be used as guest accommodations. But the law’s biggest constraint is unmistakable: operating days are capped at 180 per year. On top of that, many prefectures and municipalities layer on their own ordinances that shrink this window even further—Shinjuku Ward in Tokyo, for instance, bans operation on weekdays (Monday through Friday) in certain zones. It’s not unusual for a property to realistically be limited to just 60–90 operating days a year in some areas.
This 180-day cap is written directly into law, and there’s no way to exceed it while staying strictly within the Minpaku Law framework. So if you want to operate beyond 180 days, you need to either change the framework your property operates under, or switch to a different licensing system entirely. In practice, that means three realistic approaches: obtaining a simple lodging license under the Hotel Business Act, renovating the property with a change of building use, or restructuring your operation around multiple properties and licensing types combined.
Option 1: Obtain a Simple Lodging License Under the Hotel Business Act
The most straightforward way to break past the Minpaku Law’s 180-day ceiling is to get a “simple lodging” (kani shukusho) license under the Hotel Business Act. This is an entirely separate legal framework from the Minpaku Law, and critically, it has no cap on operating days. In other words, once you hold this license, you can run your property 365 days a year. It’s no surprise this is the route most owners choose when they’re serious about maximizing revenue from their rental.
To obtain a simple lodging license under the Hotel Business Act, you’ll need to apply through the public health center in your prefecture (or designated city/core city). The key requirements include: (1) guest room floor space of at least 33㎡ (or at least 3.3㎡ per guest if hosting fewer than 10 people), (2) proper facilities for ventilation, natural lighting, humidity control, and cleanliness, (3) a front desk (though this can be relaxed under certain conditions), (4) fire safety equipment compliant with the Fire Service Act, and (5) location within a compatible zoning area (properties in Category 1 or Category 2 low-rise exclusively residential zones generally cannot qualify).
Estimated Costs and Timeline for the Application
The cost of applying for a simple lodging license varies by municipality, but application fees generally run around ¥15,000–¥22,000. On top of that, installing or upgrading fire safety equipment can cost anywhere from ¥100,000 to over ¥1 million. This is especially true when converting an existing residential property, where retrofitting sprinklers and automatic fire alarm systems often accounts for the bulk of the expense. Factor in interior renovation costs as well, and you should budget a total initial investment of roughly ¥500,000 to ¥3 million.
If your paperwork is in order, the process from application to approval typically takes about 1–2 months. However, coordinating fire and health inspections, or correcting documentation issues, can stretch that out to 3–4 months. Hiring a licensed administrative scrivener (gyoseishoshi) or other professional can smooth the process considerably, though it comes with an additional service fee of roughly ¥100,000–¥300,000. Keep in mind that once you’re licensed, you’ll also be required to file annual reports, so you’ll need to build ongoing management processes into your operation.
Benefits and Considerations of Getting a Hotel Business Act License
The biggest advantage, as mentioned, is having no cap on operating days. In theory, you can push occupancy close to 100%, potentially nearly doubling the revenue you’d earn under the Minpaku Law’s 180-day limit. It also makes it easier to list on OTAs and welcome business travelers or long-stay guests, opening up more diverse revenue streams.
That said, there are important caveats. First, zoning restrictions mean properties in exclusively residential zones won’t qualify, so checking your property’s location should be your very first step. For condos, management bylaws often explicitly prohibit “hotel business operations,” and getting the management association’s approval can be a genuine hurdle. Also, once licensed, you’ll need to maintain hygiene standards and an operational structure solid enough to withstand periodic on-site inspections from the health center.
Option 2: Change the Property’s Designated Use from “Residential” to “Lodging Facility”
The second approach is to formally change the building’s designated use—under the Building Standards Act—from “residential” to “lodging facility” (hotel/ryokan). This is a separate procedure from the Hotel Business Act license, and the two are often pursued together. It’s a particularly effective strategy for owners who want to convert a detached house into a fully dedicated short-term rental property.
A change-of-use procedure is generally required when a building’s total floor area exceeds 200㎡. Below that threshold, a formal building confirmation application is often unnecessary, making the process relatively less burdensome. That said, even under 200㎡, you’ll still need to satisfy the Building Standards Act’s requirements around fire safety, evacuation routes, and natural lighting—and depending on the building’s structure, that may still call for interior modifications or additional equipment.
Construction Work and Costs Involved in a Use Change
The application itself for a change of use typically costs only a few tens of thousands of yen, but the accompanying renovation work is where the real cost lies. Common requirements include: (1) securing evacuation routes (typically two independent directions of escape), (2) installing emergency lighting, (3) establishing fire compartmentation, and (4) installing smoke ventilation systems. For a wooden detached house, these renovations can easily run from ¥1 million to over ¥5 million. Converting an entire detached house tends to be considerably more expensive than converting a single unit in a reinforced-concrete condominium building.
Changing a property’s designated use can also affect its property tax assessment. Once a property shifts from residential to commercial use, it may lose eligibility for the residential land tax reduction (which cuts the assessed value to one-sixth), potentially increasing your tax burden. This can add anywhere from tens of thousands to hundreds of thousands of yen to your annual tax bill, so it’s worth having a tax accountant or real estate specialist run the numbers before you commit.
Which Properties and Situations Suit a Use Change
A change of use is especially effective for large detached houses or properties where you want to convert multiple rooms entirely into guest accommodations. For example, if you’re operating a 250㎡ traditional Japanese farmhouse (kominka) as a whole-building rental, combining a use change with a Hotel Business Act license lets you operate 365 days a year. For a property that can command ¥30,000–¥50,000 per night, even a 60% annual occupancy rate could translate to ¥6–9 million in yearly revenue.
On the flip side, a use change requires hiring an architect or building engineer, and design/supervision fees typically add another 10–15% on top of construction costs. Since you can’t operate the property during the application and construction period, you’ll also need to account for a temporary loss of existing rental income. Think carefully in advance about whether to renovate in stages while continuing to operate, or to secure sufficient funding upfront before breaking ground.
Option 3: Run Multiple Properties Combining Minpaku Law and Hotel Business Act Licenses
The third strategy isn’t about transforming a single property—it’s about running multiple properties together as a combined operation. In practice, this means: once your Minpaku-registered property hits its 180-day cap, you redirect guests to a separate property licensed under the Hotel Business Act. Another variation is a seasonal approach—charging premium rates on your Minpaku property during peak travel season, then relying on your Hotel Business Act property as the main earner during the off-season.
This approach does require the added investment of owning and managing multiple properties, but it’s a smart strategy from a risk-diversification standpoint. Relying on a single property leaves you exposed—regulatory changes, tighter local ordinances, or building issues could wipe out your income overnight. Spreading operations across multiple properties reduces that exposure. In fact, most owners who run minpaku as their primary business tend to build portfolios of anywhere from 3 to 10 properties.
A Revenue Simulation for Multi-Property Operations
Consider this example: a Minpaku-registered property (a 1LDK in Osaka) operating 180 days a year at an average nightly rate of ¥15,000 would generate about ¥2.7 million in annual revenue. Add a second, comparably-sized property licensed under the Hotel Business Act, operating 365 days a year at 55% occupancy and the same ¥15,000 nightly rate, and that adds roughly ¥3 million more. Combined, the two properties bring in about ¥5.7 million a year—more than double what you’d earn running a single Minpaku property alone.
That said, managing multiple properties demands a solid operational structure. Trying to handle cleaning, check-ins, and guest communication single-handedly across several properties quickly becomes unsustainable, both in terms of time and physical energy. Using a professional minpaku management service—typically at a fee of 15–30% of revenue—can make stable multi-property operation realistic. Even after subtracting that management fee, net profits often significantly exceed what a single property could generate alone, making a management partner a practical consideration for anyone looking to scale up.
Steps to Prepare Before Launching a Multi-Property Operation
Before diving into multi-property operations, start by tracking 3–6 months of performance data from your existing Minpaku property—occupancy rate, average nightly rate, cleaning costs, OTA commission fees, and so on. Once you understand these numbers, you can start scouting candidates for a second property. As a rule of thumb, choose a location and building structure that will make it easier to obtain a Hotel Business Act license for your second property—properties in commercial or near-commercial zones tend to clear that hurdle much more easily.
Once you’ve selected the property, move forward in parallel on the renovation plan, financing, and application timeline needed to satisfy the Hotel Business Act’s requirements. Since the process from application to approval and launch typically takes at least 3–4 months, the key to success is working backward from your timeline—syncing the moment your Minpaku property hits its 180-day cap with the launch of your Hotel Business Act property. Planning this out with expert support helps you avoid unnecessary costs and delays.
Common Misunderstandings and Legal Risks Around the 180-Day Rule
Continuing to operate beyond the Minpaku Law’s 180-day limit without proper authorization is a serious legal violation. The Private Lodging Business Act allows for business suspension orders and fines of up to ¥1 million for unregistered operation. And if the violation falls under the Hotel Business Act (operating without a license), penalties include fines of up to ¥30,000 (with discussions underway to raise this amount through legal reform), plus corrective guidance and public disclosure by the authorities. Since 2019, there have been numerous reported crackdowns on unregistered minpaku operations across Japan—the idea that “it’s fine as long as no one notices” simply doesn’t hold up.
A few common misconceptions are worth clearing up: some owners believe that “as long as I’ve registered under the Minpaku Law, going a bit over 180 days isn’t a big deal,” or that “if I stop listing on Airbnb, no one will investigate.” In reality, municipal authorities regularly monitor OTA listing data, and if your actual operating days are found to exceed 180, you can expect on-site inspections and administrative guidance. While some OTA systems do automatically block bookings once the day count is reached, trying to game the system by spreading listings across multiple platforms to dodge that count is itself a legally risky maneuver.
Pursuing these legal options does involve upfront costs and administrative effort, but it’s worth reframing that as the cost of maximizing your revenue safely. The short-term gains from operating illegally beyond the limit pale in comparison to the long-term, stable income you can build by establishing a properly licensed operation.
Get in Touch with Stay Buddy About Your Minpaku Operation
There are multiple legal paths to exceeding the 180-day cap under the Minpaku Law, but which one is right for you depends heavily on your property’s location, structure, zoning, management bylaws, and available budget. If you’re thinking “I want to pursue a Hotel Business Act license but don’t know where to start,” or “multi-property operation sounds appealing, but I’m worried about managing it all”—reaching out to minpaku management professionals is by far the most efficient first step.
Stay Buddy Inc. offers full-service minpaku management covering both the Minpaku Law and the Hotel Business Act. From supporting your license applications to handling cleaning, guest communication, and OTA optimization for maximum revenue, we manage every aspect of your rental operation as a true one-stop solution. We’ve helped numerous properties achieve annual occupancy rates of 60–80%, and we support everyone from first-time owners navigating the Hotel Business Act application process to seasoned investors managing multiple properties.
We’re happy to hear from you even if you just want to talk things through first. Tell us about your property, and we’ll offer free advice on which legal path makes the most sense for you. If you’re ready to break past the 180-day wall and maximize your revenue, don’t hesitate to reach out to Stay Buddy today.
