Can Dormant Deposit Funds Pay for Buildings? The Four Conditions in the Call Guidelines

Organizations that want to build or refurbish a base of operations ask whether dormant deposit funds can cover construction costs. The public explanatory materials do not list eligible expenses, so the question cannot be settled without opening the call guidelines.

The short answer first. The dormant deposits scheme cannot pay for land. Buildings are leased as a rule, and purchase or new construction is treated as an exception. Even where the exception is granted, the grant covers at most 80% of the value assessed by a certified real estate appraiser.

Stopping at the text, however, leads to the wrong judgement. Within the conditions for the exception, the phrase "where no alternative means exists" leaves a different amount of room depending on what kind of corporation is applying. What a scheme allows is not settled by its own text alone.

The scheme as a whole is covered in the dormant deposits guide（このサイトの記事）, and the application requirements in the FY2026 application guide（このサイトの記事）. This article goes deeper on the parts that concern facilities and real estate.

The chapter on eligible expenses contains an item headed "Treatment of real estate (including projects of implementing organizations)". As the parenthesis states, the same conditions apply to implementing organizations, not only to fund distribution organizations.

Land purchase shall not be eligible for grant funding; only leasing is eligible. Buildings shall be leased as a rule. Purchase or new construction of a building shall be recognised as an exception only where it is indispensable to achieving the purpose of the project and no alternative means exists. To secure the economic reasonableness of the purchase or construction price, JANPIA shall have the property appraised by a certified real estate appraiser or equivalent, and shall grant up to 80% of that appraised value

A footnote to the same item asks applicants planning to purchase or construct a building to consult JANPIA before applying.

The conditions fall into four steps. Drawn out, the amount that survives shrinks at each step.

Land purchase is not eligible

The first sentence is the strongest. For land, "only leasing is eligible". Acquisition costs drop out in full, and no exception is offered.

If the plan is to lease land and construct on it, the rent survives this step. The building itself then meets the next condition.

Buildings are leased as a rule

For buildings too, the default is leasing. Purchase and construction sit outside that default. Misreading this puts the central column of the funding plan on an exception from the very start.

Setting out both options at the planning stage, leasing an existing facility and building a new one, makes the later explanation easier.

When the exception is granted

Purchase and construction are recognised only where two conditions hold at once.

1. It is indispensable to achieving the purpose of the project
2. No alternative means exists

The first can be argued inside the project plan. The second is harder, because it turns on facts that sit outside the plan. That is the subject of a later section.

The cap is 80% of appraised value

Even where the exception is granted, the grant is capped. JANPIA has the property appraised, and 80% of that appraised value[1] is the ceiling.

Two gaps open up here. One is the remaining 20% of the appraised value. The other is the difference where construction costs exceed the appraisal. An appraisal looks at the economic value of the building, so design supervision, site works and price escalation are not necessarily reflected in it. The self-funded share can therefore be larger than 20% of the construction cost.

Property acquired with grant funding carries a restriction on disposal. The guidelines impose a duty to manage the property with the care of a good manager during the grant period and for five years after the project ends. For buildings, however, a parenthesis extends this to the useful life of depreciable assets defined in the Corporation Tax Act.

For a reinforced concrete school building or office, that statutory useful life runs to several decades. Using, transferring, exchanging, lending or pledging the property for any purpose outside the project plan requires JANPIA's prior written consent. Where a gain arises from disposal, JANPIA may demand the return of all or part of it.

A project ends in three years; the building alone leaves an obligation lasting decades. That asymmetry can weigh more than the 80% cap.

The condition "only where no alternative means exists" is not something an applicant can satisfy through effort. What settles it is which schemes already exist around them.

Incorporated educational institutions are the clearest case. The Promotion and Mutual Aid Corporation for Private Schools of Japan runs a lending programme for the development of private school facilities and equipment. Ministry of Education materials list "construction and reconstruction of school buildings" among eligible projects. Repayment runs up to 30 years[2] at a low fixed rate, with government interest subsidies available for some projects. The same document notes that kindergartens, primary, lower and upper secondary schools and special needs schools, not only universities, can be eligible borrowers.

An incorporated educational institution building a school block therefore has a funding scheme designed for exactly that purpose. Arguing that no alternative means exists is not straightforward in that position.

The same pattern appears in other sectors. Facility development for social welfare services is covered by the welfare lending programme of the Welfare and Medical Service Agency, and hospitals and clinics by the same agency's medical lending programme. The more dedicated schemes a sector has, the narrower this phrase becomes.

This structure is not confined to dormant deposits. Conditions of the form "only where no other means is available" or "only where no other scheme applies" appear across subsidy and grant guidelines. What decides eligibility is not the applicant's commitment but the density of schemes already provided for that sector.

Separately from the text, the figures also place buildings outside what the scheme envisages.

The FY2026 guidelines set an indicative ceiling per implementing organization for each project type.

Actual figures run below those ceilings. According to Cabinet Office materials, the average planned grant per project for implementing organizations is 16.24 million yen[3]. On the fund distribution side, the average planned grant per project is 154 million yen, and that figure covers grants to several implementing organizations.

The indicative ceiling and the observed average are different quantities and should not be read together. The former says "at most this much in this type", the latter says "this is what is actually being granted on average". On either reading, the figures do not support putting the acquisition of a building at the centre of a budget.

The project period adds a further constraint. Projects run by implementing organizations last three years as a rule, and even including fund distribution organizations the scheme runs to the end of March 2030. A building is not an asset that produces its return in three years.

All of the above concerns limits, but that does not mean dormant deposit funds are useless where facilities are involved.

The purpose of the scheme is set out at the head of the guidelines. One aim is to resolve social issues that national and local government find difficult to address; the other is to develop self-reliant providers of public-interest activity and to build an environment in which they can raise funds. Asset formation is not among the aims. Reorganised around that purpose, the possible uses look like this.

Lease an existing facility, start the work, and fund the acquisition of premises separately once the results are in. In that order, dormant deposit funds are used as the scheme was designed. A three-year horizon is also workable under a lease.

Implementing organizations are further expected to secure at least 20% of total project costs over the grant period from their own or other private funds. The guidelines explain this as a mechanism to avoid creating organizations dependent on dormant deposit funding. Here too, the scheme is looking at organizational independence rather than at assets.

Some of this can be established without asking anyone. The order is as follows.

1. Find out whether your sector has a dedicated funding scheme. Incorporated educational institutions have the Promotion and Mutual Aid Corporation for Private Schools of Japan; social welfare services have the Welfare and Medical Service Agency. Where one exists, it comes before the dormant deposit exception
2. Ask whether the same outcome can be reached without owning a building. If leasing, using an existing facility, or sharing with another organization is enough, the clause does not bite
3. If a building is genuinely indispensable, consult JANPIA before applying, citing the relevant passage of the guidelines. The guidelines themselves ask for this
4. In parallel, build the project-cost side of the plan. Salaries, professional staffing and evaluation costs fit both the indicative ceilings and the three-year period

Taken in this order, the project plan survives even if the exception is refused. Built around a building, the whole plan stops on a single condition.

The guidelines do not say that a building cannot be funded. They do remove land, push buildings towards leasing, reduce purchase and construction to an exception, and cap that exception at 80% of appraised value. Once acquired, the property carries a disposal restriction for its statutory useful life.

What then decides the outcome is the phrase "where no alternative means exists". No amount of drafting moves that condition. Its width is already set by whether the applicant's sector has a scheme of its own.

Before considering an application, look at the schemes around you. That is the fastest route.

References

FY2026 Fund Distribution Organization (Grant) General Round 1 Call Guidelines — Japan Network for Public Interest Activities (JANPIA) (2026)

On the Dormant Deposits Utilization Scheme — Cabinet Office (2026)

Overview of the Lending Operations of the Promotion and Mutual Aid Corporation for Private Schools of Japan — Ministry of Education, Culture, Sports, Science and Technology (2025)

Lending (Private School Promotion Operations) — Promotion and Mutual Aid Corporation for Private Schools of Japan (2026)