Real estate investment with stable income is also popular among civil servants.Moreover, in the case of civil servants, because they are socially stable, they have high attributes and can easily receive loans from banks, making it easy to start investing in real estate.However, since Article 15, Paragraph 2 of the Constitution stipulates that ``all public servants are servants of the whole country and not a part of it'', civil servants are normally prohibited from doing side jobs.This time, we will explain the points that do not violate the side business regulations when public servants invest in real estate.
table of contents
- 1 Reasons why side jobs are prohibited and provisions under the National Public Service Law and Local Public Service Law
- 2 The extent to which public officials are permitted to invest in real estate
- 3 Points to note when public servants invest in real estate
- 4 When permission is obtained, when permission is easily obtained
- 5 Summary
Reasons why side jobs are prohibited and provisions under the National Public Service Law and Local Public Service Law
The reason why public servants are prohibited from doing side jobs is because the law stipulates three principles: "prohibition of acts that damage trust, confidentiality, and duty of devotion to duties."Civil servants may not belong to profit-making organizations and engage in profit-making activities, but exceptions are made with the permission of the Prime Minister and the head of the government agency that has jurisdiction over his or her employees.
Below are the provisions of Articles 103 and 104 of the National Public Service Law that apply to national public servants, and Article 38 of the Local Public Service Law.
・Article 103 of the National Public Service Law Separation from private companies
Employees shall concurrently serve as officers, advisors, or councilors of companies or other organizations that aim to operate commercial, industrial, financial, or other profit-oriented private enterprises (hereinafter referred to as profit-making enterprises), should not run a business.
National Civil Service Law
・Article 104 of the National Public Service Law Restrictions on involvement in other businesses or clerical work
Even if an employee receives remuneration and serves as an officer, advisor, or councilor of a business organization other than a profit-making enterprise, or engages in any other business, or performs clerical work, the Prime Minister and the agency with jurisdiction over the employee Requires long-term permission.
National Civil Service Law
・Local Public Service Law Article 38 Restrictions on engagement in profit-making companies, etc.
Article 38 Employees shall, without permission from the appointer, be an officer of a company or other organization that aims to operate a private enterprise for profit In an organization, it is prohibited to hold a position specified by local government regulations), run a private enterprise for profit, or engage in any business or office work for remuneration.
Local Civil Service Act
The extent to which public officials are permitted to invest in real estate
The permitted range is that there are less than 5 rooms in 10 buildings, annual rental income is 500 million yen or less, and the property is not built for purposes other than rental.According to the National Personnel Authority (personnel management of national civil servants), there are certain standards for civil servants to invest in real estate without violating them, and within those standards, it is said that they do not conflict with the side business regulations.If it exceeds this, it is necessary to obtain permission from the head of the competent authority.
A certain standard that violates the side job regulations if exceeded
(1) If the rental of real estate falls under any of the following
Operation of National Personnel Authority Rule XNUMX-XNUMX (Secondary employment with executives, etc. of profit-making companies)
(b) Regarding the rental of independent houses, the number of independent houses shall be XNUMX or more.
(b) With respect to the rental of buildings other than independent houses, the number of independently partitioned parts that can be rented shall be XNUMX rooms or more.
(c) With regard to land lease, the number of lease contracts shall be XNUMX or more.
(d) The real estate pertaining to the rental shall be equipped with facilities for amusement gatherings, games, etc. such as theaters, movie theaters, and golf driving ranges.
(e) The leased building is used for specific business such as an inn or hotel.
(2) If the parking lot rental falls under any of the following:
(a) The parking lot is a building or a parking lot equipped with mechanical equipment.
(b) The number of parking spaces shall be XNUMX or more.
Points to note when public servants invest in real estate
According to the rules of the National Personnel Authority
“Ensure that there is no hindrance to the performance of duties by entrusting the management work such as recruitment of tenants, collection of rent, maintenance and management of real estate to the business operator.”
There is.In other words, there is a point of view that it should be done within the range that does not interfere with the performance of duties, so it is considered that performing real estate management by yourself will interfere with the main business.It is safer to outsource real estate management operations to a real estate company.
Also, as shown below, the National Personnel Authority rules set the annual rent income limit at 500 million yen.
“(3) The amount of rental income related to the rental of real estate or parking lots (if they are rented together, the total amount of rental income related to these rentals) is XNUMX million yen or more per year. if there is”
If you do it in your own name, you will need to obtain a separate permission if it exceeds this, but if it is a family or corporate name, it is not limited.If you use your wife as a corporate representative and operate it under that name, of course, it does not conflict with the Civil Service Act.However, as family income will increase, income tax and resident tax will increase, so we will have to make a trial calculation of the tax and how to get it.
When permission is obtained, when permission is easily obtained
If you want to invest in real estate beyond a certain standard, it is necessary to report to the head of the department you belong to and obtain permission from the government agency / government office, and prepare and submit the following documents.
- Self-employed concurrent business approval application (real estate rental related) *Reference:National Personnel Authority Application for Approval of Self-employed/Concurrent Business (Related to Leasing of Real Estate, etc.)
- Consignment contract for real estate management
- Property overview
- List of lending terms (rent roll)
etc.
In addition, if the real estate acquired is inherited from parents, it can be said that it is easy to be recognized even if it is a public employee.
Summary
Civil servants are basically prohibited from doing side jobs because of the three principles of prohibition of acts that damage credibility, confidentiality, and duty of devotion.Failure to do so will result in disciplinary action, including dismissal, suspension, pay cuts, and reprimand.However, it is possible to invest in real estate within a certain range, so be sure to know the points to be aware of and make a proper real estate investment.
At Rich Road Co., Ltd., we will consistently support all aspects of investment real estate, from complete beginners to experienced people, from a wide range of real estate selection, loan consultations, post-purchase management, and renovations.
