General information only — not legal, tax, financial, or investment advice This article explains general conventions behind how Japanese property value and depreciation are treated — tax useful-life tables, appraisal practice, and housing-market history — not legal, tax, or investment advice. Depreciation schedules and appraisal methods can vary by property type and change over time, so confirm specifics with a licensed tax accountant (zeirishi) or a qualified appraiser before relying on any of it for a purchase decision.

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Last updated: 2026-07-18  ·  TokyoEstate Guides

The Japanese House Depreciation Curve, Explained — and Why It Isn't Only Bad News

Japan prices a home's building and its land as two separate stories, and once you see the split, listings stop looking irrational and start looking predictable.

A line-and-watercolor illustration of a modest Japanese wood-frame house with a thin value curve sloping downward from its roofline into pale ink, while the ground beneath the house stays solid and richly colored.

The 22-year number everyone repeats

If you've spent any time reading about Japanese property, you've probably run into the claim that a wooden house is "worthless" after about 20 years. The number usually cited is 22 years for wood-frame houses and 47 years for reinforced-concrete buildings. Both figures are real, but they come from a specific place: the National Tax Agency's statutory useful-life table (法定耐用年数), which exists to standardize how depreciation is calculated for tax purposes, not to certify when a building stops being livable.

A wood-frame house that reaches year 22 hasn't hit an expiration date. It has reached the end of the period over which its original cost can be written off on paper. Plenty of wooden houses in Japan are lived in, well-maintained, and structurally sound decades past that mark, and appraisers, lenders, and tax preparers all know the difference between the statutory schedule and a building's actual physical condition. The confusion happens because the same number gets used loosely in casual conversation, real estate listings, and sometimes by agents who should know better.

A culture built around rebuilding, not reselling

The tax convention alone wouldn't explain why buildings actually behave this way in the market. That has more to do with habit. Much of Japan's housing stock was rebuilt at speed after 1945, and for decades the dominant pattern was straightforward: buy land, put up a new house suited to your own family's needs, and when the next generation takes over, tear down and start again rather than adapt what's there. Reuse of an existing structure was the exception, not the plan.

That habit shaped everything downstream of it — how banks assess older collateral, how agents market a listing, how a seller prices a 25-year-old house. None of it reflects a judgment that older wood construction is inherently unsafe. It reflects a market that, culturally and structurally, has rewarded starting fresh more consistently than markets like the US, UK, or Australia, where renovating and reselling an existing home is the default move.

Where the money actually goes: land, not structure

This is the part that matters most for a buyer, and it's the part casual explanations tend to skip. Japanese valuation practice treats a property's price as two separate components: the land and the building. Fixed-asset tax assessments, bank appraisals, and most agent pricing models split them out explicitly. The building's assessed value tends to fall roughly along that statutory depreciation curve — old house, low or near-zero book value for the structure. The land underneath it is priced on its own terms: location, road access, zoning, and local demand, tracked through published reference prices like the annual roadside land price (路線価).

In practice this means the "house" you're buying and the "land" you're buying can move in opposite directions at once. A 30-year-old house on well-located land in central Tokyo can sell for more than it did a decade ago, even though the building itself is contributing almost nothing to that price on paper. The land did the work.

1981 is the line that resets the clock again

There's a second depreciation-adjacent date worth knowing, separate from the tax table: June 1, 1981. On that date, a revision to the Building Standards Act introduced Japan's current earthquake-resistance standard (新耐震基準), tightening requirements so buildings would be designed to withstand a magnitude 6-strong to 7 event without collapsing, up from the older standard's target of magnitude 5-strong. Whether a building was permitted before or after that date is determined by its building confirmation date, not its construction date, and it has become a real dividing line in how buyers, lenders, and insurers treat older stock.

A house built to the pre-1981 standard isn't automatically dangerous, but it carries a different risk profile, and that shows up in financing terms, insurance premiums, and resale appetite. Combined with the statutory depreciation schedule, it gives Japan's older housing stock two separate reasons to be priced cautiously — one about tax accounting, one about earthquake engineering — that often get blurred together in casual explanations.

A secondhand market that stayed small

Put the tax convention, the rebuilding habit, and the earthquake-code line together, and you get a housing market where existing homes have historically made up a much smaller share of transactions than in comparable economies. Figures compiled from Ministry of Land, Infrastructure, Transport and Tourism (MLIT) data have put Japan's secondhand share at around 14 to 15 percent of the overall housing market as of the late 2010s, against 80 percent or more in the US, UK, and France. That gap has narrowed somewhat as renovation culture and akiya (vacant house) policy attention have grown, but it remains a structural feature of the market rather than a rounding error.

A thinner resale market means fewer comparable sales, less standardized inspection culture historically, and appraisal habits that default to conservative building values almost as a matter of course. None of that is a flaw in the buildings themselves. It's a reflection of a market that never built the same secondhand infrastructure — inspection norms, renovation financing, buyer confidence — that older housing stock relies on elsewhere.

Where this actually helps you as a buyer

Here's the twist worth sitting with. If a seller's building is expected, by convention, to carry little or no value on paper, you're not being asked to pay a premium for an asset the market assumes will keep appreciating. That's a real difference from housing markets where buyers routinely bid on the story that a 1920s house will keep climbing in value simply because it's old and charming. In Japan, the building's declining book value gives you a legitimate, well-understood basis for negotiating price down as a structure ages, rather than having to argue against a seller's optimism about scarcity or character.

It also clarifies what you're actually protecting. If the land is doing most of the value-holding work, then location fundamentals — transit access, zoning, flood risk, neighborhood trajectory — deserve more of your attention than the cosmetic condition of the building. A tired-looking older house on strong land, priced with the building's depreciation already factored in, can be a rational purchase precisely because you're not overpaying for a structure the market has already agreed is a wasting asset. This is also where the calculus starts to diverge depending on whether you're looking at a house or a condominium unit, since condo buildings depreciate and get revalued differently than land-holding houses — that comparison is covered in more detail in our piece on choosing between a new build and a secondhand condo.

What "well-kept" has to actually mean

None of this is a blanket argument for buying the oldest house you can find. A depreciation schedule tells you what a building is worth on an accounting ledger; it tells you nothing about whether the roof leaks, whether the foundation has settled, or whether a condo building's reserve fund can cover the next major repair cycle. Those are separate questions that require an actual inspection (a home inspection is often called a "住宅診断" or "インスペクション" in Japan), a look at maintenance records, and for condos, a review of the building's long-term repair plan and reserve fund balance.

It also helps to be able to read what you're being shown. Older listings, in particular, tend to come with plans drawn in a shorthand that isn't always intuitive if you didn't grow up with it — room labels, storage notations, and the logic of how a Japanese floor plan is laid out. If that's unfamiliar territory, it's worth working through our guide to reading a Japanese floor plan before you start comparing listings seriously. Depreciation explains why the price looks the way it does. It doesn't replace the homework of confirming what you're actually getting for it.

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