July 26, Online
The government is currently revising a regulation that would enable foreigners to own property in Indonesia, says an official.
The regulation, Government Regulation No. 41/1996 on residential property ownership by foreigners, as of now only enables a non-national to occupy a building or land for 25 years.
“The decision on the draft bill will have to wait for approval from the House of Representatives and the Coordinating Economic Ministry,” Deputy for area development at the Public Housing Ministry Agus Sumargiarto said on Thursday, as quoted by Kontan.co.id.
To acquire property ownership rights, however, according to Agus, foreigners will have to comply with tough requirements.
For example, they would have to own a business in Indonesia and should they want to sell their property, they would only be allowed to sell it to the government.
Your comments:
Can’t they just keep it simple?
Grant rights of land/property ownership to foreign spouses married to Indonesians. Expats married for many years and residing in the country have no other intentions but to live a peaceful and productive life, to support their extended family, purchase assets and pass it on to their offspring.
Grant leasehold (99 years like in Singapore) to foreigners, who wish to invest in condominiums and luxury properties, resorts, etc.
That would eventually boost the industry, but not at the expense of the entry- and mid-level segment. It is a different target segment altogether. Minimum purchase value could be set to ensure that.
Set a profit tax or a stamp duty on real estate investment to curb speculation. Today, the tax as it is too little and there are loopholes in the way it is calculated (underdeclaring the value of the property at the notary office is common practice).
Last but not least, land prices have increased tremendously over the past seven years. I doubt expats have anything to do with this.
Bule
I hope that soon the Indonesian standard of living will be on-par with other countries. But sadly we are not yet there.
Indonesian income per capita in 2012 was equal to US$3,557 (source: World Bank). If it is divided by 12 this gives us $296. A decent monthly expense for a single worker in Jakarta is $208, leaving $88 in disposable income.
Multiply by 12 equals to $1,056. Jakarta – Sydney Air Asia ticket costs $310 (limited promo seat). Budget hotel Sydney costs $80 to $100 per night. Make it $350 for four nights, with $396 left over for meals and other expenses. Would the average Indonesians be able to go to Sydney Australia?
Would they be able to have the nominal savings required by Australian Embassy to get a visa? Would they be able to buy property in Australia?
Rio Rivai
To buy property in Indonesia is out of reach for many Europeans, even though the average income of an average European is more than that in Indonesia.
Half of Europeans cannot afford to own even a small apartment in a European suburb. They work hard for a wage that just covers the rent of their expensive but small apartment pay off their small car and eat two expensive but mediocre meals a day. The cost of living in Indonesia is lower than in other countries, meaning that the same wage does not mean the same thing in Indonesia.
Last, many services in Indonesia (e.g. hotels) practice double-standards: the rate is commonly double or more for a foreigner than for an Indonesian. I suggest foreign countries act similarly and make Indonesians pay double.
Sabar Paidjo
Issue of the day: Expatriates to get property ownership
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