In order to mitigate seismic damage of timber houses, application of passive control devises is demanded. The authors have developed high performance shear walls with various types of dampers, which are called “energy dissipation walls”. For the future, new design method has to be proposed to generalize passively controlled timber structures. In this paper, a method to evaluate allowable strength of shear wall is proposed. Advantage of passively controlled structure is to reduce maximum deformation, and energy dissipation walls are added to a structure so that maximum deformation angle of the structure subjected to level2 earthquake is less than target deformation. Accuracy of the method is demonstrated through a lot of non linear time history analyses.