📖 Approx. 5 min ／ Updated 2026.08.23
When the land and building of a clinic are personally owned by the director, a real estate transaction separate from the medical corporation arises during an M&A. This article explains how to structure real estate by ownership type, tax optimization, and the CentralMedience Group’s real estate collaboration framework.
1. Why Real Estate Becomes an Issue in Medical Institution M&A
In business succession and M&A for medical institutions, the handling of land and buildings where outpatient facilities, clinics, or hospitals are located has a major impact on the transaction price and scheme design. Practical operations vary significantly depending on combinations such as whether the target of the transfer is the “medical corporation itself” or “business only,” whether the land and buildings are “owned by the medical corporation” or “personally owned by the director,” and whether they are “owned” or “leased.”
According to the Ministry of Health, Labour and Welfare’s Dynamic Survey of Medical Facilities and fixed asset tax valuation data, it is not uncommon for the real estate value of a medical institution to account for 30% to 70% of the total transaction consideration. In other words, misjudging the valuation or handling of real estate can lead to a difference of tens of millions of yen in the transfer price.
2. Key Issues in Medical M&A Involving Real Estate
- Structuring Ownership Types: Medical corporation-owned / Director personally-owned / Leased property / Relatives’ corporation-owned, etc.
- Fair Valuation of Real Estate: Combination of road-side land prices, income capitalization method, sales comparison approach, and cost approach
- Handling Mortgages and Collateral: Scheduling loan payoff, cancellation of registration, and setting up new collateral
- Transfer of Lease Agreements: Consent from the lessor, execution of new contracts, and restoration clauses
- Real Estate Taxation: Capital gains tax, registration and license tax, real estate acquisition tax, and fixed asset tax adjustment
- Verification of Use, Building Coverage Ratio, and Floor Area Ratio: Feasibility of continuing use as a medical facility
- Evaluation of Building Aging: Seismic resistance, reserve funds for repairs, and history of major renovations
3. Structuring Patterns for Personally Owned Real Estate During M&A
For clinic land and buildings personally owned by the director, options are chosen from the following during an M&A:
- ① Sale to the corporation prior to M&A (triggers individual capital gains tax / separate taxation)
- ② Sale to the buyer (new director personally) (commonly combined with buyer financing)
- ③ Continuation of lease agreement with the new director (real estate remains personally owned by the former director)
- ④ Transfer concurrent with incorporation (when there is sufficient time)
4. Why a Collaborative Real Estate Framework Is Crucial
In medical institution M&A, issues concerning the Medical Care Act, tax law, and real estate law are intricately intertwined. Errors in real estate transactions can reduce the transfer price by tens of millions of yen, resulting in an irreversible loss for the seller.
Collaboration with a suitable real estate firm is essential; however, outsourcing to external parties often leads to information gaps, ambiguous responsibilities, and increased stress for the seller. The CentralMedience Group offers a dedicated medical M&A team (M&A Medical) × real estate sales specialists × a network of certified tax accountants and judicial scriveners, delivering seamless, one-stop succession support.
Frequently Asked Questions
Q. Real estate ownership is mixed between the medical corporation and the director personally. Is it possible to structure this?
A. Yes, it is possible. From structuring ownership types prior to M&A (individual to corporation or corporation to individual) to simultaneous processing during the transfer, tax accountants and real estate specialists from the CentralMedience Group will design the optimal scheme.
Q. Can a leased clinic also be transferred?
A. Yes, it is possible. Our group’s dedicated real estate team provides full support, including obtaining lessor consent and executing contracts with the new tenant.
Q. Can you accurately value real estate for regional medical institutions?
A. Yes. We have extensive experience in valuing regional properties and provide realistic valuations by combining the income capitalization method and cost approach, even in areas with few comparable sales.
Q. Can you also provide loan referrals for buyers?
A. Yes. Utilizing our group’s financial institution network, we can support the buyer’s fundraising as well.
Q. Can we request only a valuation of the land and building?
A. Yes. We also handle standalone appraisals that do not assume an M&A. Please feel free to contact us.
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- Complete Guide to Hospital and Medical Corporation Business Succession | From Successor Shortages to Success Cases: Practical Medical M&A
- How to Proceed with Medical M&A and Hospital Succession | 6 Steps from Consultation to Closing Explained with Case Studies
- Complete Guide to Tax Schemes for Medical Corporation M&A | Key Issues for Tax Accountants and CPAs
- Complete Guide to Clinic Sales and Transfers | Price Ranges, Process, and Cautions Explained by Medical M&A Experts
CENTRAL MEDIENCE GROUP
Peace of mind even when real estate is involved.
Completed entirely through in-group collaboration.
Medical M&A Advisory × Real Estate Sales Specialists × Tax Accountant and Judicial Scrivener Network.
One-stop succession support made possible by the CentralMedience Group.