Easy-to-understand explanation of the abolition/reduction of Special Case No. 4 | Are properties for private lodging also subject?

What is Special Case No. 4? Cases Eligible for Exemption from Examination

 [What is Special Case No. 4?] Review of Current Laws

“Examination Exemption System (so-called ‘Special Case No. 4’)” is…

Based on Article 6-4 of the Building Standards Act, for small-scale buildings such as wooden houses subject to building confirmation (buildings falling under Article 6, Paragraph 1, Item 4 of the Building Standards Act), when a registered architect designs, the examination of structural regulations, etc., is omitted.

From Ministry of Land, Infrastructure, Transport and Tourism, Housing Bureau, Building Guidance Division (https://www.mlit.go.jp/common/001500388.pdf)

This special case aims to expedite building procedures, and is an important factor supporting rapid opening, especially for new uses such as private lodging. Therefore, private lodging investors, etc., can benefit from advantages such as simplification of procedures. However, in the April 2025 revision, the scope of application of the special case is scheduled to be reduced.

Why is the examination omitted? Check the conditions of Building No. 4.

The examination omission under Special Case No. 4 applies when the building scale is small and the purpose of use is clear. Building No. 4 includes houses and private lodgings with a total floor area of 300㎡ or less, and is limited to facilities mainly used for residential purposes. The omitted examination is mainly an examination based on the Building Standards Act, and administrative procedures are streamlined by avoiding excessive procedures. However, the omitted scope is limited, and it is premised that legal standards are met.

Changes from April 2025 | What is the reduction of Special Case No. 4?

Easy-to-understand explanation! Changes to Special Case No. 4.

In April 2025, the conventional classification of buildings called “Building No. 4” will be abolished, and will be newly classified into “New Building No. 2” and “New Building No. 3.” As a result, the conventional examination omission system will apply only to New Building No. 3, and other buildings will be excluded from the examination omission. Specifically, a typical two-story house with a general size will be classified as New Building No. 2, and will not be able to use the examination omission system. Building confirmation will be required not only for new construction, but also for work such as expansion, remodeling, major repairs, and remodeling.

This change requires sufficient advance preparation, especially for businesses that intend to open private lodging or small-scale accommodation facilities, as the time and cost for procedures and preparations may increase.

Why does it change? Revision of the Building Energy Efficiency Act.

The reduction of Special Case No. 4 is mainly based on the revision of the Building Energy Efficiency Act. This revision aims to counter global warming and improve energy efficiency, and strict energy-saving standards will be introduced, especially for newly built buildings. As a result, buildings will be required to be designed with an emphasis on energy efficiency, rather than simply being a “place to live.”

In particular, for New Building No. 2, it will be necessary to submit documents related to structure and energy saving at the time of confirmation application. In addition, when carrying out expansion or remodeling, compliance with energy-saving standards is required, so it is important to take measures at the design stage.

[Must-see for private lodging investors] Building classification checklist

To prepare for the April 2025 changes, private lodging investors and facility owners need to check whether their buildings comply with the new standards. Below is a checklist to determine if you meet the post-change criteria:

Confirmation of Building Scale and Structure

Is it a single-story or two-story or more?

• Single-story (one-story): Highly likely to be classified as a New Building No. 3.
  → Proceed to confirmation of site area
• Two-story or more: Classified as a New Building No. 2, excluded from the examination exemption system.

Confirmation of Site Area

• Buildings with a total floor area of 200㎡ or less: Classified as a New Building No. 3.
  
• Buildings with a total floor area exceeding 200㎡: Classified as a New Building No. 2, excluded from the examination exemption system
  

Wooden or steel frame construction?

Whether it is wooden or not will not be a classification standard after April 2025.

Compliance with Energy Saving Standards (New Building No. 2)

• In the case of new construction
  
  • Check if energy saving standards are met (insulation performance, efficiency of heating and cooling equipment, etc.).
• In the case of extensions and renovations
  
  • Check if the extended or renovated part complies with the new energy saving standards. In particular, the introduction or renovation of energy-saving equipment is required.

Check these items and understand how the buildings you plan to build or currently own will be classified!

[Attention to winter construction in Niseko and Furano!] Impact of Special Case No. 4 reduction

Disadvantages of Special Case No. 4 reduction

• Increase in design and construction costs
  → Design and construction costs will rise due to the mandatory structural calculation, and the investment recovery period may be prolonged.
  
• Increase in the effort and time of confirmation application
  → Building confirmation, which had been simplified, will be tightened, and it will take time to obtain permission. Schedule management until opening is important.
  
• Raising the hurdle for property selection
  → The number of properties that can be operated as private lodgings at low cost will decrease, and the difficulty of new entry will increase.

[For those considering private lodging investment in Niseko and Furano] Impact in Hokkaido

Resort areas in Hokkaido, such as Niseko and Furano, are very popular among private lodging investors, but there are also unique impacts due to the cold climate.

Risks of winter construction due to prolonged construction period
→ As mentioned earlier, due to the reduction of Special Case No. 4, the procedures for confirmation applications and structural calculations will increase, which may delay the start of construction. As a result, construction will overlap with winter, causing a decrease in work efficiency and additional costs due to snow accumulation and freezing.

Increase in heating cost burden unique to cold regions
→ In addition to the need for heating operation in winter due to construction delays, equipment investment to strengthen cold resistance performance will also increase, raising both initial and running costs. Private lodging investment in cold regions requires recalculation of the yield rate, taking into account the increased investment amount due to the reduction of Special Case No. 4.

To address these issues, it is effective to consult with real estate companies specializing in areas such as Niseko and Furano. JANKEN’s article introduces recommended real estate companies in Niseko and Furano. Please take a look at this as well.

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Introducing Recommended Real Estate Companies in Furano! A Guide for Purchasing Real Estate and Villas!

Introducing Recommended Real Estate Companies in Niseko and Kutchan! Ideal for Purchasing Villas and Staff Rooms!

Advantages of Special Case No. 4 Reduction

On the other hand, there are also advantages to the reduction of Special Case No. 4.

Improved building safety
→ Seismic resistance and durability are ensured by making structural calculations mandatory, reducing the risk in the event of a disaster.

Optimization of building standards
→ Appropriate inspections are carried out even for small-scale buildings, increasing the number of high-quality buildings and leading to an increase in market value.

Increased reliability of investment properties
→ It will become a facility that private lodging users can feel safe in, and long-term customer attraction and improvement in evaluation can be expected.

Summary: Measures to succeed in private lodging investment after the reduction of Special Case No. 4

Understand the impact of the reduction of Special Case No. 4 and make a planned building plan!

Due to the reduction of Special Case No. 4, it is inevitable that the effort of confirmation application, extension of construction period, and cost increase will occur. Especially in cold regions of Hokkaido, it is necessary to consider the risks of winter construction and the impact of heating costs. To succeed, early design and application preparation, building plans for cold regions, and reconfirmation of financial plans are important. By understanding changes in the market environment and making careful plans, highly profitable private lodging operations can be realized.

If you’re considering renovating or remodeling a vacation rental property in Hokkaido, leave it to JANKEN. With over 500 successful vacation rental operations, we will design a space that maximizes your revenue.

Leave private lodging investment in Niseko and Furano to JANKEN

JANKEN is a professional in private lodging investment in Hokkaido, including Niseko and Furano. By cooperating with local real estate companies and construction companies, we will support the success of private lodging investment even after the reduction of Special Case No. 4 with prompt and accurate support. Consultation in foreign languages is also possible, so please feel free to contact us first!