The Cost of Agricultural Land Conversion（農地転用 or 農転） and Points to Consider When Building a New House!
For people who are wondering, I want to convert my farmland into residential use!, we will now focus on the costs related to agricultural land conversion.
What is the market rate for the cost of the application and who will pay for it? and other basic points, and if you are building a new building on farmland, be careful not to overlook costs other than those associated with the application.
Other scheduling considerations related to agricultural land conversion will also be presented.
Let me summarize the main points of this article at the beginning.
- Agricultural land conversion (or noten, 農転, abbreviation in Japanese) is the process of converting agricultural land into residential land or other land that can be used to build houses
- The cost of purchasing and applying for farmland is approximately ¥200,000 and up, while the cost of converting one's own farmland to build a house is approximately ¥100,000 and up
- When agricultural land is purchased for construction, the cost of the application is often borne by the builder as a necessary expense
- The key point to note is "costs other than application for conversion to agricultural land," which should be taken into account in advance for land development, ground improvement, and construction to bring in lifelines (water, sewer, electricity, and gas).
- The second point to note, besides the cost, is the time required to apply for conversion to agricultural land.
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1.Application fee is approximately 100,000 yen and up
- 1-1.Approximately ¥100,000 for converting one's own land to agricultural land (Agricultural Land Act, Article 4)
- 1-2.Approximately 200,000 yen and up for purchasing farmland and converting it to agricultural land (Agricultural Land Act, Article 5)
- 1-3.Costs are generally borne by the architect
- 1-4.Request to an administrative scrivener is recommended
- 1-5.Other costs may apply
- 2.The classification of agricultural land almost always determines whether it can or cannot be agricultural land conversion
- 3.Consultation and submission of documents to the municipal agricultural committee is required
- 4.Agricultural land conversion takes time
- 5.Summary
1. Application fee is approximately 100,000 yen and up
The first cost of concern is approximately 100,000 yen to several hundred thousand yen (administrative scrivener's fee) to prepare the documents for application, etc., although it varies depending on various circumstances.
Let's take a look at the cost for each pattern.
1-1. Approximately 100,000 yen for converting one's own land to agricultural land (Agricultural Land Act, Article 4)
The first case is when you own agricultural land and wish to change the land title in order to construct a house or other building on the land. Depending on the type of agricultural land, it is not that difficult if it is the type of land that can be converted to agricultural land.
The average application fee is about 100,000 yen. The application itself to the Committee for Agriculture is free of charge, but the costs here are mainly the necessary expenses for ordering the registry, etc., and the fees charged to the administrative scrivener.
1-2. Approximately 200,000 yen and up for purchasing farmland and converting it to agricultural land (Agricultural Land Act, Article 5)
If you purchase land that was originally farmland and build a new building, etc., it falls under Article 5 of the Agricultural Land Law. As with the above, there is no charge for the application itself, but again, there is a cost to prepare the necessary documents for the application.
Compared to converting one's own land to agricultural land, the cost is higher, as it requires registration of ownership transfer, etc.
The cost should be approximately 200,000 yen or more.
1-3. Costs are generally borne by the architect
Next, who pays for the conversion of farmland to new construction?
Generally, the buyer (builder's side) pays.
Although there is no legal rule that either the seller or the buyer bears the cost, it is common for the buyer to bear the cost of registering the transfer of ownership of the land as a necessary expense.
Therefore, the cost of agricultural land conversion is positioned in the same way, and although it is common in the world for the buyer to bear the cost, it is possible to negotiate with them.
1-4. Requests to an administrative scrivener is recommended
The procedure itself can be done by gathering all the necessary application documents at the Committee for Agriculture at the city hall, but because of the difficulty of gathering the various documents, it is best to leave the process to an administrative scrivener with strong expertise in real estate, such as agricultural land conversion. If the administrative scrivener is rooted in the local community, he or she will be able to arrange the necessary documents, and there are even firms that are familiar with the situation of the Committee for Agriculture.
In addition, since an application for agricultural land conversion is filed once a month, if the application is not accepted due to incomplete documentation, etc., you will have to wait until the next month's application. Since construction cannot begin until the agricultural land conversion is completed, this will affect the timing of the start of construction, etc., so please consult with an experienced administrative scrivener or architect.
1-5. Other costs may apply
The cost of the application for agricultural land conversion itself ranges from about 100,000 yen to several hundred thousand yen, but various costs other than application may be incurred when actually building a new house or other structure. Rather, the market price of the costs here can be in the millions of yen in some cases. Consult with your architect or real estate agent in advance about the costs other than the application, as well as the procedures for converting the land to agricultural land.
◆Application for development permission
There is a rule that requires prior notification and permission from the prefectural governor for large-scale residential land development in an urbanization zone that basically changes the land zone nature, such as conversion from agricultural use to residential use, by more than 1,000 square meters.
◆Grading / Ground improvement, etc.
Market price: 1 million yen to several million yen
Since the land was originally farmland, you have to examine whether the land suitable for building? The survey must be conducted to determine if the land is suitable for building. Remember that, depending on the shape of the land, it is often necessary to build retaining walls (walls to support the land or to prevent soil from flowing into neighboring land) or to improve the ground.
Water, sewage, and electricity supply
*Market price of costs: several hundred thousand yen and up
To build a house, water, sewer, and electricity are required at a minimum.
In the case of agricultural land, it can be assumed that there are no lifelines for living, so "incidental construction" costs other than the cost of the building itself can be expected to be significantly higher. In the extreme case of land with no lifelines, the cost could be 10 million yen or more.
◆Gas supply
It will also be necessary to run a gas line if necessary. Since the number of all-electric houses has been increasing in recent years, gas is no longer essential, and it is also possible to operate with propane gas.
2. The classification of agricultural land almost always determines whether it can or cannot be agricultural land conversion
Then, there are some agricultural lands that can be target of agricultural land conversion and others that cannot be converted in the first place.
Let's look at the types of agricultural land and whether or not it can be converted.
However, agricultural land that is already in an urbanization zone or falls under an exception to the Agricultural Land Act can be legally converted to residential land without having to apply for a conversion permit.
2-1. Agricultural land that can be converted to build a house is "Type 2 agricultural land" and "Type 3 agricultural land"
There are five categories of agricultural land: "agricultural land in agricultural use zones," "Class A agricultural land," "Class 1 agricultural land," "Class 2 agricultural land," and "Class 3 agricultural land.
First, there are two types of farmland that can be converted to residential land: "Type 2 agricultural land" and "Type 3 agricultural land". Both types of farmland are often located in areas that are expected to become urbanized in the near future and are within 500 meters of a train station. They are also farmland cultivated by individuals rather than farmers, and are located within an urbanization zone.
2-2. Some farmland cannot be converted to build a house in principle
There are three types of agricultural land for which agricultural land conversion is not permitted in principle: "Agricultural land in agricultural use zones", "Class A agricultural land", and "Class 1 agricultural land".
Basically, it refers to agricultural land that has a high capacity for crop production and is owned by farmers. In principle, conversion to agricultural land is not allowed in these areas.
Exceptional cases of permission may be granted for building facilities for agriculture (processing, sales, etc.) or for facilities related to the promotion of agriculture in the area. In both cases, it is difficult to build a house in that compound independently, and it seems that there are no exceptional cases and take years to be permitted, but they are very rare.
3. Consultation and submission of documents to the municipal agricultural committee is required
The municipal committee for agriculture serves as the contact point, but final approval is required from the prefectural governor.
3-1. Meaning of agricultural land conversion
Originally, the purpose of this system was to maintain Japan's agricultural productivity and to secure a certain amount of farmland.
Therefore, in principle, some agricultural land is not permitted to be converted from agricultural land to residential land, etc. Check the classification of agricultural land as described in Chapter 2.
3-2. Committee for Agriculture is the point of contact
Applications for conversion of agricultural land are submitted to the Committee for Agriculture with the documents designated by each municipality.
If you want to build a house in an urbanization control area, the Board of Agriculture will provide consultation services.
3-3. Documents required for agricultural land conversion
- Application form designated by each municipality
- Certificate of residence
- Certified copy of the registration of the relevant farmland
- Cadastral map
- Photographs and maps (if necessary)
- Owner's written consent (in case of Article 5), etc.
Other documents designated by each municipality are also required, so please check the website or the Committee for Agriculture for these as well.
3-4. Documents required for new construction
In addition, if there are plans for new construction, the following documents are also required
- Blueprint
- Funding plan
- Certificate of balance issued by financial institution
- Mortgage loan decision letter, etc.
Other documents specified by each municipality will be required. You will be evaluated on your intention to build a new house and whether or not you have the financial resources to do so.
It will also take some time to get all the documents together, since you will need to have an architect draw up blueprints, estimates, and financial plans.
4. Agricultural land conversion takes time
In addition to costs and documentation, be sure to check the schedule as well.
If you are planning to build a new building, submit the application in consultation with your architect, taking into account the timing of the start and completion of construction, as the conversion of agricultural land is an early stage of the process.
4-1. 1 week to several months for approval if in an urbanized area
Many municipalities close applications on a monthly basis, so be sure to check the closing date set by each Committee for Agriculture.
Depending on the municipality, you may receive a response as early as a week after the deadline, or as late as several months. It is a good idea to ask in advance how long it will take to receive approval from the Committee for Agriculture.
Urbanized areas are generally approved.
4-2. Several months or more, depending on the urbanization control area or agricultural land classification
Urbanization control zones are basically areas where urbanization is inhibited, so it is difficult to obtain approval.
Applications for permission to convert agricultural land are submitted to the prefectural government via the Committee for Agriculture, and a decision on whether or not approval is granted will come in a few months or so after the monthly deadline.
It is also safe to assume that agricultural land conversion takes time, as it can take up to one year for complex cases.
4-3. Sometimes it's not even approved
Of course, there are cases where approval may not be granted.
In the worst case scenario, it may take up to a year to obtain approval, and the project may not be approved in the end.So make sure to consider this and depending on the classification of the farmland, etc., it may be advisable to discuss alternatives with the architect.
5. Summary
In summary, the cost of agricultural land conversion itself ranges from about 100,000 yen to several hundred thousand yen at the highest, and is not that expensive in the financial planning of house construction.
However, depending on the area, circumstances, and shape of the land, problems can arise in various aspects, so it is important to consult with the architect carefully. Many architects who have been working in the area for a long time know how the Committee for Agriculture works, so please consult with a japanese-architects.com first-class architect for a free consultation, including the overall schedule and financial plan for the house construction.
