Before you can buy real estate property in Japan, you need to know what are FAR (floor-area ratio) and BCR (building-coverage ratio).

Normally, these bits of information are provided by the real estate company and it is highly recommended that you understand these concepts before you go ahead with purchasing the property, especially a piece of land.

What is Floor-area ratio?

Floor-area ratio is the ratio of the building’s total floor area and the total size of the land upon which the building is built. In Japanese it is called Yousekiritsu.

Floor-area ratio is applicable to every type of construction and it is taken into account when measuring the cost of the property or even the taxes the property owner has to pay for owning the property.

Every city and zone in Japan has its own specified floor-area ratio according to which a building is to be constructed. For example, if a city or a zone specifies that only 50% of the land must be covered by the floor area, then only 50% is to be covered and if you cover more area, you may find yourself in violation to the building laws.

What is building-coverage ratio?

Building-coverage ratio is the ratio of the areas that the construction of the building covers at the base and the total size of the land that is owned. In Japanese it is called Kenpeiritsu.

What is the difference between floor-area ratio and building-coverage ratio.

A building can have multiple floors. There is the ground floor, then there is the first floor, the second floor, and so on. A multistoried building may have even 20-30 floors for that matter.

If you add up the area of all the floors, it becomes the floor-area. The total space inside a building that you can use for living or for conducting business constitutes of floor-area.

So, suppose, on the ground floor, you have 60 m². On the first floor you have 40 m² and then on the third floor you have 70 m², in total, the floor area is 60+40+70 = 170 m².

Hence, the floor-area ratio is the total floor area divided by the area of that particular piece of land owned by the builder or the owner, multiplied by 100.

Building-coverage area on the other hand is the piece of land that is being covered by the building. For example, if you look at the building from above, whatever area of the land that the building and its various components (balconies, for example) are covering, is called the building-coverage area.

Hence, the building-coverage area is the area being covered by the building divided by the area of that particular piece of land owned by the builder or the owner, multiplied by 100.

Why it is important to know the floor-area ratio and the building-coverage ratio of your real estate property

When it comes to real estate property, both residential and commercial, the urban landscape in Japan is divided in different zones. According to the zones, it is decided what should be the floor-area ratio and building-coverage ratio of your real estate property in Japan.

As outlined by the Ministry of Land, Infrastructure and Transport, there can be 1-12 possible zone designations and according to the zone designation, you may have your floor-area ratio and building-coverage ratio. These are as following:

  1. Category I exclusively low-rise residential zone: These are primarily low-rise residential buildings. These low-rise buildings may include, apart from residential buildings, small shops and offices and elementary/junior high school buildings.
  2. Category II exclusively low-rise residential zone: This is also for low-rise residential buildings, small shop buildings and elementary/junior school buildings where floor-area is permitted up to 150 m².
  3. Category I medium/high-rise oriented residential zone: Medium to high residential buildings. This area can have hospitals and university buildings. It can also have shop buildings. The buildings can have a floor-area of up to 500 m².
  4. Category II medium/high-rise oriented residential zone: This zone can have medium to high residential buildings. It can also have hospitals and university buildings. It can have shops. The floor area can be up to 1500 m².
  5. Category I residential zone: Normally to protect the residential environment, the floor area in this zone is permitted up to 3000 m².
  6. Category II residential zone: The floor area is same as that of category I above, but karaoke boxes are permitted in building size restrictions are not applicable in this zone.
  7. Quasi-residential zone: Vehicle-related road facilities are available. In addition to the facilities available to the zone mentioned above, theaters, restaurants, stores and other establishments of entertainment can be built. 10,000 m² of floor area can be constructed. There can also be warehouses.
  8. Neighborhood commercial zone: This sort of neighborhood accommodates daily shopping activities and hence, allows construction is based on that. The floor-area is the same as quasi-residential zone. Additionally, auto-repair shops with areas up to 300 m² can be constructed.
  9. Commercial zone: Banks, cinemas and department stores can be constructed in the zones. The permitted floor-space is same as the neighborhood commercial zone but the difference is that along with other constructions, public bath houses can also be constructed.
  10. Quasi-industrial zone: Light industrial and service facilities can be built in this zone. Along with the permissions granted to the “Commercial zone” industries and businesses that can cause possible danger to the environment are sometimes also allowed within this quasi-industrial zone.
  11. Industrial zone: This is specifically designated for factories. Although some residences and shops can be constructed within this zone, schools, hospitals and hotels are not allowed.
  12. Exclusively industrial zone: Just for factories and industries. Non-factory constructions are not allowed.

It is important to have some knowledge about these zones because what zone your property lies in can have an impact on your floor-area ratio and building-coverage ratio.

Even if you are going to buy an apartment, it’s better to have these facts with you, because you are going to spend lots of money in owning a property in Japan. You should know what you are really going to buy.