What is a Non-Reconstructible Property?

A property on which a new building cannot be constructed even if the existing building is demolished.

Non-reconstructible properties cannot be newly rebuilt.
However, if the property meets the condition of a 'No. 4 building', it is possible to renovate an existing building.
In addition, it may be possible to rebuild by fulfilling the road access obligation, which states that the property must be bordered by a road at least 2m wide and at least 4m long.

①Pros and cons of non-reconstructible properties.

【Pros】

(1) Lower purchase price.
Despite various problems, such as the inability to rebuild and the difficulty of extending or reconstructing the property, it may be possible to purchase the property at less than 50% of the market price.
This is ideal for those who want to live in a house with a low purchase price and substantial renovation costs.

(2) Lower taxes.
As the property tax assessment value of non-reconstructible properties is set low, property tax, city planning tax, inheritance tax, etc. can be kept low.

【Cons】

(1) Unable to rebuild.
Inability to rebuild is the biggest disadvantage of non-reconstructible properties.
You can carry out renovation, but you cannot rebuild even if small repairs occur frequently due to the age of the building, or if it collapses due to a disaster such as a fire, earthquake or typhoon.

(2) Difficulty in obtaining a mortgage
It is generally difficult to purchase a non-reconstructible property with a bank mortgage due to its low collateral rating, so the purchase must be made in a lump sum in cash. Non-bank loans are available, but unlike mortgages, interest rates are higher, so monthly repayments may be more expensive.

② Use of non-reconstructible properties

There are both pros and cons to non-reconstructible properties, but the value can be increased by using the following methods.

(1) As they cannot be rebuilt, they can be renovated and maintained.
(2) Clear the land and use it for storage, bicycle parking, etc.
(3) To make the property reconstructible by purchasing an adjacent property that can be reconstructed and fulfilling the necessary road access conditions for reconstruction.