Translation from English

Friday, June 26, 2015

Jakarta Post- Foreigners Can Now Own Flats

Business

Jokowi OKs plan for foreigners
to own flats

Satria Sambijantoro, Grace D. Amianti and Nadya Natahadibrata, The Jakarta Post, Jakarta | Business | Thu, June 25 2015, 8:32 AM
Business News
The government is close to finalizing a regulation that would allow foreigners to own apartments after President Joko “Jokowi” Widodo approved the proposal, top government officials have said.

The President has agreed in principle to the idea of allowing foreigners to own Indonesian residential assets to boost the attractiveness of the local property sector, Teten Masduki, a member of the President’s communications team, said in a recent statement.

Coordinating Economic Minister Sofyan Djalil confirmed on Wednesday that the new regulation would be issued after it had been finalized in the upcoming two or three Cabinet meetings.

Sofyan insisted that the regulation, which would allow foreigners to own a flat with a value of more than Rp 5 billion (US$375,000), would not trigger a price bubble in the property sector, as it was specifically targeted at, and limited to, the luxury-apartment market.

“The regulation will be identical to the existing one allowing foreign companies to lease [commercial] space up to 30 years. However, the new one covers not only foreign companies, but foreign individuals,” Tourism Minister Arief Yahya explained on Wednesday.

“The new proposal will be good for investment and capital flow into Indonesia, as well as our tourism industry,” he said.

The Indonesian government currently bans foreigners from purchasing property in Indonesia, although many do so through their Indonesian spouses or other citizens.

Foreigners are allowed to purchase strata title-type properties, which include “right to use” buildings only — excluding land — through a building ownership certificate (SKBG) for a 25-year period with the opportunity to extend.

InvestmentCoordinating Board (BKPM) chairman Franky Sibarani said that he had suggested the ownership period be extended to a 50-year period, with an option of two 15-year extensions.

Foreign ownership of apartments, he suggested, could be loosened in special economic zones (KEK) to attract more expatriates to boost the local economy there.

“Many foreigners in fact own property assets in regions by using other [local] persons. We must acknowledge that such a loophole exists,” he argued. According to developers, the property sector has seen sluggish demand in the past year on the back of a slowing economy, which decelerated to 4.7 percent in the first quarter this year, the slowest level in five years.

To revive economic growth and resuscitate the property sector, Bank Indonesia (BI) on Wednesday relaxed its loan-to-value (LTV) ratio, with local consumers now allowed to buy houses with smaller deposits.

The loosening of foreign ownership of property assets would apply only to high-rise apartments, not landed houses, and there might be different regulations for Indonesian and foreign property owners, said Syarif Burhanuddin, the Public Works and Public Housing Ministry’s director general of housing.

“We welcome the opening up [of the property market] to foreigners. The potential impact is huge: developers will benefit and our economy will grow,” Syarif said.
       
Paper Edition | Page: 13

Post Your Say

Selected comments will be published in the Readers’ Forum page of our print newspaper.
44 comments

Newest | Oldest | Top Comments
AnimisticGod
AnimisticGod
For goodness sake...jakarta, hot, too hot , too polluted..
Try The southern part of EU, winter is mild, foods excellent, infrastructure no complain, PRIVACY guaranteed, safe, pollution almost non existent, women wow , and EU has a culture-diversity, No noise from mosques, once a week or if somebody died, whom the bell tolls from the church...wine and beers , and tranquility...and is almost as expensive as living in Jakarta... 
tempodulu
tempodulu
Yet another blunt policy. Consider: apartments selling for more than Rp5bn can only be found in Jakarta. That rules out property ownership everywhere else in Indonesia. In Jakarta, there are a maximum of 20,000 working expats (probably far less). Let’s say 10% want to live in a very expensive apartment – most would prefer to rent a landed house obviously and most expats are only in Indonesia on a temporary basis.. That gives a number of 2,000 expats. Of this number what percentage would actually want to purchase a Rp5 bn apartment given it is only a short 25yr lease - meaning property rights are extremely weak? I’d say 10 percent max. This leaves you with a potential market of 200 apartments maximum – and that’s probably a huge over-estimate. If you have Rp5bn then invest it elsewhere (i.e. Australia, Singapore or Malaysia where foreign investors are actually given rights) and pay rent. That way you can sleep at night.
WilberforceArgo
WilberforceArgo
For Legal Property Investment & Opinion, Please kindly contact us WILBERFORCE ARGO (021) 29941769 for Jakarta,
Or Investment Property In Batam at WILBERFORCE ARGO (0778)460384/460188
Thanks
xsimaging
xsimaging
Give me dirt or you get nothing from me. Renting is still the most feasable way to aford a home where you scratch where it itches. Get out of Jakarta and the living is easy. My rent for a year is less then a home of the same size in Jakarta goes for per month. I also have privacy.
brucelee4444
brucelee4444
What fool foreign investor would buy Indonesian residential property now. The national government is flaky and Widildo's orders are routinely ignored. There is nothing stopping an overzealous and corrupt local housing official sticking his hand out for cash when the property is bought and sold. And the government via the banks will enforce currency exchange controls on overseas transfers out. 
TheJerman
TheJerman
Jakarta property - especially newly developed 'luxury' condos are a big scam that only ennrich the richest of the country at the expense of the upper-middle class who buy those apartments in belief of a never-ending rise in value. However, what nobody seems to understand in this country is that only 'quality' van be the fundament for true value - everything else is a bubble that will burst at some point.

Who of you went recently to one og Jakarta's residential towers? At least 1 third of apartments are empty - if not even more... Nobody is willing to pay those unjustified high rent prices for this crap quality of building material used. Further, who should live in all these luxury apartments?? The Top 10% of the city already own already at least 3 properties and the amount of well-earning expats is shrinking thanks to new KITAS regulations...

So as consequence there is no yielding of investment due to rental payments on the way - all that property investors can hope for is an increase in property value and then sell at a higher price somewhen in the future. 

And here comes the issue...
SiangMalam
SiangMalam
It is because you need the money inflow, President, and it's because your construction industry is coming to a halt soon....
MMXV
MMXV
Good limitations to prevent pricing out the property mkt out of indo affordability. Such as the case w hongkong w influx of moneyed chinese buyers pricing out local hk ers
weilim88
weilim88
Indonesian property laws concerning foreigners investing in property in Indonesia is complicated.  Anyone with a KITAP can own any type of apartment, or you can do it through a PMA. What this new law does is allow non-resident foreigners to own apartments.

How does compare with other countries in Asia.  China and Hong Kong no one owns freehold, not even locals. In Singapore, only Singaporean can hold freehold.  In the Philippines and Thailand, its the same as Indonesia.  Only Japan allows foreigners to hold freehold. So what Indonesians are doing is nothing special.

Abdul Malik1
Abdul Malik1
- f you’re wondering whether you can buy property as an expat, the answer is yes – you can buy property in Hong Kong. Other than the additional fee of Buyer Stamp Duty, expats generally have similar rights and regulations as local residents. However, there are certain factors that expats need to pay more attention to when buying property in a foreign land. Here is a checklist on all you need to know in buying Hong Kong property:

Buyer Stamp Duty

One major difference that expats need to look out for is the Buyer Stamp Duty (BSD), where non-Hong Kong Permanent Residents are required to pay an extra 15% of the market value of the property within 30 days of the chargeable document. However, if the residential property is jointly acquired with a Hong Kong Permanent who is a close relative, you will not be required to pay the BSD.

Mortgage

In terms of mortgage, both locals and expats are eligible for the 90% Mortgage Insurance Program (MIP), which means that homebuyers only have to pay 10% of the property price as down payment. If the property value is below HK$4 million, the maximum loan to value (LTV) Ratio is 90%, but if the property value is rated at or above HK$4.5 million to HK$6 million, the maximum LTV Ratio is 80%. It is important to note that the MIP is only available to applicants whose principal income derives from Hong Kong. Therefore, only expats residing in Hong Kong for the long run would benefit from this program.
Abdul Malik1
Abdul Malik1
- Singapore is the same...i can transfer money today and have the keys besok....its real easy....
doing that here is impossible...
weilim88
weilim88
  
In Hong Kong ALL property is leasehold 9with one notable exception).  The only difference is you are treated equally as locals.  But at the end you can't own freehold.  In Indonesia you can hold leasehold if you have a KITAP (long term residency).. What this policy allows non-resident foreigners to own leasehold over a certain value.
In Singapore, foreigners can't own freehold
stproperty.sg/articles-property/singapore-property-news/for-2m-you-can-get-a-freehold-landed-home/a/115197

"In Singapore, foreigners are generally not allowed to buy landed homes. As such, prices and demand for landed properties are less volatile and speculative," said PropNex chief executive Mohamed Ismail."
 But at the end of the day, whether you are in HK, Singapore and Indonesia you can't own freehold.  The Apartment that you own is not really yours you are just leasing, that is why I am saying, that applies to all Asian countries outside Japan. So even places like Singapore have along way to go compared to the West.
Indonesian real estate isn't that different from many in Asia qith regards to freehold for foreigners. That is what I am saying. 


 
Djerak
Djerak
Freehold in Germany in 1939 is now worth. Or what about Vietnam, Myanmar, Cambodia.
How much is freehold in Iraq, Syria or Palastine worth.
With the tick of a clock rules change all over the world
weilim88
weilim88

Have you ever lived in a Communist country? Why do some many rich Mainland Chinese buy property in the West?  One rich Chinese said the following "I don't own anything in China, its all owned by the state: If you look at the other posters here, they are complaining why can;'t foreigners hold freehold.so its not just me.
Djerak
Djerak
@weilim88 There are plenty countries less than 100 yrs old. The freehold is only as good as the government in power as many who have had gone to live under nationalistic rule have unfortunately discovered.
I'd suggest allowing foreigners to own partial shares in properties valued at least at Rp 5 Billion. This vastly increases the size of the market and helps keep the standard up.
Some foreign investors might only want a 5% share.
weilim88
weilim88

I still think its better than leasehold.  If you have a 50 year old leasehold.  The other government at the end of the lease can take control of the property and he is perfectly with its legal means to do so.  Freehold is still better .Just say if the government nationalize the property, then that government is overthrown in 50 years, if its owners a 50 year leasehold its gone.  But if its freehold there is a still chance to get it back. Look at Cuba, some exiles are attempting to get their property back.
Foreigners can own one leasehold property (apartment) already via Foreign owner companies and if they have a KITAP (5 year residency)  or Retirement Visa of any value . Foreign companies can lease commercial property.
- See more at: http://www.thejakartapost.com/news/2015/06/25/jokowi-oks-plan-foreigners-own-flats.html#sthash.G9M3Z5S2.dpuf
Posted by at

No comments:

Post a Comment

Please leave a comment-- or suggestions, particularly of topics and places you'd like to see covered

Subscribe to: Post Comments (Atom)