The western Japan city of Kyoto plans to introduce a tax on empty homes and holiday houses to boost the property market amid an exodus of young people struggling to secure housing.

The new tax, the first of its kind in Japan according to the city, will target around 13,000 to 15,000 unoccupied residences in the historical city, but it will exclude traditional townhouses known as "machiya" that are popular among foreign tourists.

File photo shows a residential area in Kyoto. (Kyodo)

A draft ordinance to introduce the new tax in Kyoto was submitted Thursday to the city council. It is expected to be passed at a regular assembly session by the end of March.

Condominium prices within Kyoto are high compared to surrounding areas, with many people in their 20s and 30s choosing to move to Tokyo or neighboring prefectures, city officials said.

"Encouraging people to reside in the homes will revitalize the economy and local community, leading to cultural promotion," Kyoto Mayor Daisaku Kadokawa said at a city council meeting.

Under the envisioned plan, vacant or vacation properties will fall into one of three tax brackets based on assessed value, with floor areas to be used in calculating the amount of tax owed.

For example, a detached house around 30 years old in Kyoto's Nishikyo Ward with an assessed value of around 3 million yen ($26,000) and around 150 square meters of floor space would fall into the lowest bracket, attracting a tax bill of roughly 40,000 yen per year.

Should the internal affairs minister approve the ordinance after it is passed, the new tax will be introduced in fiscal 2026 or later. It is expected to generate around 860 million yen in revenue in its first year.

While a tax on vacation homes is already levied in the hot spring resort of Atami in Shizuoka Prefecture, the tax in Kyoto would be the first in Japan to also cover empty homes, according to the Kyoto city government.