Foreign investors scan Japan property market for failing temples and shrines

Four years ago, the Yakushi-dera, a Buddhist temple in Osaka's Sumiyoshi Ward with a history dating back 400 years, and much beloved of people in its neighborhood, was sold.

"A nearby resident warned me, 'Your family grave is going to be moved,'" a 90-year-old resident was quoted as saying. "I went to take a look, and sure enough, the graves had been shifted off to the side, along a city street. And the temple's main hall had been demolished.

"I inquired as to whether this sort of thing was permitted, and was informed, 'As far as the laws are concerned, there's no problem.'"

"Although the temple's main hall has been demolished, it still exists on paper as a 'religious facility,' which I suppose is part of the new owner's tax strategy," the man said, adding, "I fear that eventually someone will be on the receiving end of butsubachi (Buddha's punishment, i.e., the punishment to a person who violates the basic truths of the Buddha's enlightenment).

A former tax official explained that as long as the temple remains on the books as a religious entity, donations it receives are apparently entitled to preferential tax treatment. And even if reselling the property to a third party, there are tax advantages not available to ordinary commercial properties.

Shukan Gendai (June 15) has noticed a pattern here. Wealthy Chinese have been buying up religious facilities in Japan. Logging onto an SNS named Xiao Hong Shu (little red book), one can find 30 to 40 listings of temples and shrines for sale.

A broker named Yamamoto who specializes in handling such transactions tells Shukan Gendai, "There are two types of cases when temples and shrines go on the market: one is when the head priest or individual who owns the facility is hard up for money due to unmanageable debts or other factors. The other, which has been increasing rapidly of late, is the lack of a designated heir who can continue the operations."

It seems that temples and shrines not under the umbrella of large organization are easy to put on the market. Out of a total of some 180,000 religious facilities nationwide, these are estimated to number a not inconsiderable 7,000. The price tags are said to range from ¥30 to ¥50 million, but if the land and buildings are included the price is likely to be above ¥100 million.

Yamamoto's company earns a 5% commission on each transaction.

"At present, about 30% of customer inquiries are from China," Yamamoto tells the magazine. "Some temples in the countryside are dilapidated, but Chinese prefer places that have 'historic value.'"

"Many sellers say they don't want to sell to Chinese people, so I haven't been able to make any deals with them yet, but in the cases of places in financial distress, the buyer's nationality doesn't seem to matter," Yamamoto adds.

Shukan Gendai was able to track down a Chinese buyer for an interview. After succeeding in operating restaurants in several major Chinese cities, 40-year-old Wang Xiuying (a pseudonym) moved his family to Japan about 10 years ago and is presently operating a consulting business in Tokyo. He had already looked over a dozen temples around the country; this time, the reporter accompanied Wang to view a temple for sale in Matsudo City, Chiba Prefecture.

Wang's interest in buying a temple, was surprisingly sincere and straightforward.

"My motivation for buying is that it's a solid business. Japan's demographics have already made it a society with many deaths, and the need for funerals and memorial services is increasing year by year. This is evident from the fact that various memorial service businesses, such as priests who arrange sutra readings, have started up."

Concerned over the possibility of blatant commercialization of religious facilities, Japan's Cultural Agency, which oversees religious activities, has issued warnings regarding temples and shrines that engage in "non-religious activities." However, the law is opaque and does not provide for an effective means of penalizing violators. In the meantime, it seems likely that more temples and shrines will be coming under the control of new Chinese owners.

© Japan Today