The question of whether restrictions should be imposed on land acquisitions by foreigners has become a topic of considerable debate in many countries, including Japan(2025-07-29 Sankei Shimbun). This issue touches on national security, economic interests, real estate markets, and the preservation of rural communities. In what follows, we examine the policies and regulatory frameworks in several advanced economies, highlighting key case studies, their underlying rationales, and implications. These insights offer valuable perspectives for Japan as it navigates its own approach.
1. United States: National Security and Agricultural Land Protection
In the United States, while foreign ownership of land is largely permitted, regulatory measures are in place for sensitive cases. Notably, under the Foreign Investment Risk Review Modernization Act (FIRRMA), foreign acquisitions of land near strategic facilities—such as military bases or critical infrastructure—are subject to review by the Committee on Foreign Investment in the United States (CFIUS).
A widely reported 2023 case involved a Chinese company attempting to purchase farmland near a U.S. Air Force base in Montana. Both federal and state authorities intervened, citing national security concerns. Additionally, several U.S. states, including Texas and Florida, have enacted or proposed state laws restricting land purchases by entities from countries deemed adversarial (e.g., China, Iran, North Korea, Russia). This illustrates a growing linkage between real estate transactions and geopolitical risk.
2. Canada: Cooling the Housing Market
Canada introduced the Prohibition on the Purchase of Residential Property by Non-Canadians Act, which came into effect in January 2023. Under this act, non-residents (those without citizenship or permanent residency) are prohibited from purchasing residential property for a two-year period.
This move was driven by concerns that foreign investment was driving up housing prices, particularly in major urban centers such as Toronto and Vancouver. By limiting foreign demand, the government hopes to improve affordability for Canadian residents. However, critics argue that such restrictions may deter foreign capital and hurt economic competitiveness.
3. Australia: Market Stability and Regulatory Oversight
Australia employs a detailed regulatory regime overseen by the Foreign Investment Review Board (FIRB). In general, foreigners are permitted to purchase new residential properties, but are prohibited from acquiring existing (second-hand) homes.
For agricultural land, any acquisition by foreign buyers exceeding AUD 15 million must be reported and approved by FIRB. Additionally, a national register of foreign-owned agricultural land was created to enhance transparency. These rules stem from growing public concerns over food security and national sovereignty, particularly in light of large-scale acquisitions by foreign (notably Chinese) firms.
4. New Zealand: Prioritizing Domestic Homeownership
In 2018, New Zealand passed amendments to its Overseas Investment Act that banned foreign non-residents from purchasing existing homes. The legislation aimed to curb skyrocketing property prices and prioritize access for local citizens and permanent residents.
The government framed the reform in moral terms, stating that “our homes should be owned by New Zealanders.” While exceptions exist for projects that are considered to bring public benefits—such as hotel construction or rural development—the general rule is strict, and reflects a broader trend of reclaiming housing as a public good rather than a speculative asset.
5. Germany: Openness with Strategic Caution
Germany maintains a relatively liberal stance toward foreign land ownership, in line with the European Union’s principle of free movement of capital. There are no general restrictions on foreign nationals purchasing land.
However, the German government has become increasingly vigilant regarding acquisitions that may affect critical infrastructure, such as ports and energy facilities. Deals involving Chinese companies, for example, have come under scrutiny in recent years, and national security reviews are becoming more frequent even within a liberal investment regime.
6. France: Protecting Agricultural Land
France places a strong emphasis on preserving its agricultural sector and rural landscapes. While foreign ownership is not outright banned, it is subject to strict prior approval in many cases. In 2021, France introduced additional oversight mechanisms requiring approval from regional agricultural authorities for certain farmland transactions.
These measures were largely prompted by Chinese investment in vast tracts of farmland, which triggered fears about foreign control over food production and rural depopulation. France’s approach emphasizes sustainability and local engagement over pure investment logic.
Common Patterns and Lessons Across Countries
Across these advanced economies, a few common themes emerge:
- National security concerns have prompted the United States and others to introduce stricter oversight for land purchases near sensitive sites.
- Housing affordability is a major driver of restrictions in Canada and New Zealand, where foreign speculation is viewed as exacerbating housing crises.
- Food and resource security have led Australia and France to implement protective measures for agricultural land.
- Transparency and accountability are being improved through mandatory registers, approval processes, and public disclosure requirements.
- Countries generally allow exceptions for high-value or strategic investments, indicating a desire to balance openness with control.
These countries demonstrate that foreign land ownership is not merely an economic issue—it intersects deeply with public policy, social cohesion, and national identity.
Implications for Japan
Japan, too, has seen rising concerns over foreign acquisitions of land in sensitive areas, such as near military installations or vital water sources. In 2021, it enacted the Act on the Review and Regulation of Land Use in National Security Areas, targeting foreign investments in designated zones. However, the law has been criticized for its limited scope and ambiguous criteria.
From the experiences of other countries, Japan could consider:
- Defining “sensitive areas” more clearly (e.g., military bases, coastal regions, farmland, or cultural heritage sites).
- Implementing a pre-approval system for certain types of land transactions.
- Balancing investment with national interest, ensuring foreign investment contributes to local communities rather than displacing them.
- Creating a comprehensive foreign land ownership registry to enhance transparency and inform policy.
- Addressing urban housing challenges, especially in Tokyo and other cities, by regulating speculative purchases.
Conclusion
Regulating foreign ownership of land is a complex policy issue that requires balancing national interests with global economic integration. Advanced economies have taken varied approaches—some more restrictive, others more open—depending on their socio-political context and public sentiment.
Japan stands to benefit by studying these international examples, developing a regulatory framework that protects its strategic assets, preserves rural communities, and ensures that foreign investment serves sustainable and inclusive growth.