How Local Ordinances Can Override National Minpaku Rules

Property owners based outside Japan often assume that once they understand the Housing Accommodation Business Act — the national framework commonly called the Minpaku Law — they have a complete picture of what their property can and cannot do. They do not. Local ordinances in minpaku Japan routinely impose restrictions that sit on top of, and frequently override, whatever the national law nominally permits. Knowing where those layers diverge is the difference between a compliant, operational property and one that cannot legally take a guest.

The National Framework Is a Ceiling, Not a Floor

The Housing Accommodation Business Act (2018) sets the headline rules: a 180-day annual cap on nights operated, mandatory notification to the prefectural governor, a sanitation management obligation, and a requirement to appoint a management company if the owner is not resident in the property. What it does not do is prevent local governments from going further.

Under Article 18 of the Act, municipalities and special wards can pass their own ordinances to restrict minpaku operation by area, by day of the week, or by season — and many have. Tokyo’s Shinjuku and Shibuya wards, for example, have historically limited operation to weekends and school holiday periods only in residential zones, effectively reducing the usable calendar well below 180 days. Kyoto City has imposed some of the tightest rules in the country, at points restricting residential-zone minpaku to specific date windows in January and February. These ordinances are passed under municipal authority and are fully legally binding on top of the national rules.

The practical consequence for a non-resident owner is that you cannot rely on a general reading of the Minpaku Law. You need the ordinance text for the specific ward or municipality where your property sits — and that text changes. Kyoto has revised its ordinance multiple times. Confirming the current position with the local government office, or through an operator who actively monitors it, is not optional due diligence: it is the minimum starting point.

Osaka and the End of Tokku Minpaku for New Applicants

A separate national framework, the tokku minpaku system under the national strategic special zone scheme, previously allowed cities designated as special zones to sidestep the 180-day cap entirely. Osaka City used this route extensively, and many overseas investors purchased property on the assumption that the unlimited-night model would remain available.

As of 29 May 2026, Osaka City has permanently closed new applications for tokku minpaku certification. Existing certified facilities may continue operating under their current status, but no new tokku minpaku operation can be started in Osaka. For any owner considering a new short-term rental opening in Osaka from that date, the relevant routes are either the standard Minpaku Law notification (subject to the 180-day cap and any local ordinance restrictions) or a full ryokan business licence under the Hotel Business Act — a substantially heavier regulatory and capital commitment, but one that carries no night-cap and allows year-round operation if the property and location qualify.

If you already hold a tokku certification in Osaka, verify with your operator that the certification number, management records, and guest registers are maintained correctly. A lapse in compliance could put a valid certification at risk even after new applications have closed.

What Actually Happens When an Ordinance Changes Mid-Operation

We operate a property in a residential zone in Kyoto that had been running smoothly under its minpaku notification. When the city revised its ordinance to impose a seasonal restriction on residential-zone operation, the effective window dropped sharply. The owner, based in Australia, received our report and immediately asked whether to convert to a ryokan licence or accept the reduced calendar.

The honest answer required us to pull the specific zone designation from the Kyoto City urban planning map, confirm the property’s building use classification, and check whether a ryokan licence application was even feasible given the floor area and fire compliance state of the building. It was not straightforward. The building required additional fire suppression work under the Fire Service Act before a ryokan application could proceed, and the cost of that work needed to be weighed against the revenue difference between a restricted minpaku and a full-licence operation. We gave the owner a written comparison of both scenarios before any decision was made. That is the kind of operational judgement that cannot be handled remotely by someone unfamiliar with local zoning and building code detail.

The broader point: ordinance changes do not come with advance notice to individual property owners. They are published in official gazettes, and it is the operator’s job to track them. If your management company does not proactively flag ordinance changes affecting your property, you should ask them directly how they monitor this and what their response protocol is.

Tax and Remittance Obligations for Non-Resident Owners

Regulatory compliance and financial compliance are separate problems, but both fall on the non-resident owner. Under Japanese tax law, rental income earned from property in Japan is subject to Japanese income tax regardless of where you live. If you receive rental income directly from a Japanese-source payer — including a management company paying you net revenue — that payer is typically required to withhold 20.42% at source under the withholding tax rules for non-residents, unless a tax treaty between Japan and your country of residence provides for a reduced rate or exemption.

In practice, the management company’s payment structure matters. Some operators remit gross revenue minus expenses and expect the owner to handle their own tax filing; others apply withholding and issue a certificate. Clarify this in writing before signing any management agreement. You will also need to file an annual Japanese income tax return as a non-resident if you have net taxable income after allowable deductions — a Japanese tax accountant (zeirishi) with non-resident experience is not optional here.

Currency conversion adds a further variable. Payments from Japan are typically made in JPY, and exchange rates between JPY and AUD, USD, EUR or GBP have moved substantially over multi-year periods. Some owners elect to hold JPY balances in a Japanese bank account and convert selectively; others remit monthly. Neither approach is inherently better, but it is a decision that affects your effective return and should be made deliberately rather than by default.

Supervising a Management Company You Cannot Visit

As a non-resident, you cannot drop by the property unannounced or attend a meeting with your operator in person. That does not make oversight impossible, but it does require you to build accountability into the contractual structure from the start.

Management fees for minpaku and ryokan operations in Japan typically run in a range of 10–25% of gross revenue, depending on the scope of services, property type, location, and how much hands-on involvement the operator takes — cleaning coordination, guest communication, maintenance response, and regulatory compliance monitoring all affect where within that range a particular agreement sits. Be sceptical of any operator quoting figures outside that band without a detailed explanation of what is or is not included.

The questions that actually matter when evaluating a management company from overseas:

• How do you track and respond to changes in local ordinances affecting our specific address and zone designation?
• What is your process when a neighbour or building management association raises a complaint about guest behaviour?
• Who holds the physical guest register, and how is it made available to us and to authorities if required?
• How are maintenance decisions above a defined cost threshold escalated to the owner before work is authorised?
• What reporting do you provide monthly, and in what format?

Neighbour relations deserve particular attention. Under the Minpaku Law, management companies are required to respond to complaints within a specified timeframe. But the obligation to respond and the quality of that response are different things. We have had situations where a building’s management association (kanri kumiai) objected to short-term guests using the lift and common areas, and resolving it required a face-to-face meeting with the association chair, a revision to our house rules, and a written undertaking from us as operator — not something that could be handled by email from abroad.

Before You Commit Capital

Confirm the local ordinance position for your specific address and zone — not the prefecture, not the city in general, but the exact cadastral location. Confirm whether the property qualifies for minpaku notification, a ryokan licence, or neither under current rules. Get the building’s fire compliance status assessed against the Fire Service Act requirements for your intended licence type. Structure your management agreement so that reporting, fee treatment, and escalation procedures are explicit. And if you are looking at Osaka, understand that the tokku route is closed and your planning needs to start from the Minpaku Law or ryokan licence framework.

If any of this requires more clarity for your specific property, we are willing to walk through it directly. That is what on-the-ground operation actually involves.

Written by the Stay Buddy Japan team. This content was produced with AI assistance and reviewed for accuracy.