Foreigners eligible for Land Title for up to 90 years<\/p>\n
Real estate demand and prices in Bali are about to increase
\ndramatically thanks to changes in the law governing land sales,
\naccording to a real estate columnist for a Bali newspaper.<\/p>\n
The columnist, Lawrence Bellefontaine, says that the changes
\nbecame apparent recently with the successful completion of a land
\ntitle for a foreign buyer of real estate in Bali.<\/p>\n
Lawrence said the changes coincided with the news that one of
\nthe regions major overseas banks was now prepared to lend money
\nto Indonesians, and probably eventually to foreigners for Bali
\nhome and land purchases.<\/p>\n
The source of information on the foreign title is one of
\nBali's leading property legal firms. The firm says it has
\ncompleted transferring a Bali land title to a foreign national
\nwithout utilizing the nominee program, thereby eliminating
\ncomplicated documents and reliance on an Indonesian nominee.
\n A representative of the firm told Lawrence that foreigners were
\nnow eligible for Hak Pakai Title, which provides for the right to
\nuse the land from the government with a set term and renewal for
\nup to 90 years, providing the foreign buyer meets certain
\nrequirements.<\/p>\n
These requirements stipulate that the prospective foreign
\nbuyer must be seen as a contributor to national development, i.e.
\nhave economic interests in Indonesia through investments.
\n Ownership of houses or land is limited to one house erected on
\none plot of land.<\/p>\n
The land agreement provides for fixed terms for renewal of the
\nagreement within the 90-year period and the foreigner must apply
\nfor these renewals a maximum of two years before the expiry date
\nof each of the terms.
\n Lawrence recommends payment three years ahead of time, to be
\nsafe. There are unconfirmed reports, however, that it is possible
\nto prepay the extensions for 90 years. The foreigner must then
\npay a small fee for renewal.
\n The steps to obtain a Hak Pakai are as follows:<\/p>\n
* Set up a "Jual-Beli (Sales)" transaction with a notary.<\/p>\n
* Pay a buyer tax -- 5 percent of the transaction value (which
\nis normal with any land sale in Indonesia).<\/p>\n
* Pay a formal fee (government fee) of Rp 10,000,000 (for less
\nthan 100 m2) and Rp 15,000,000 (more than 100 m2).<\/p>\n
* Pay set-up fees of approximately 2 percent of purchase
\nprice, including notary fee.<\/p>\n
* The Hak Pakai certificate in the foreign buyer's name should
\nbe issued within four to six months.<\/p>\n
In laymen's terms this means foreigners can now have the right
\nto use the land without an Indonesian partner for up to 90 years.<\/p>\n
At any time the foreign purchaser can convert back to a Hak
\nMilik and sell to an Indonesian at the current market price.
\nTherefore the new owner will be enjoying appreciation similar to
\nHak Milik properties.
\n Lawrence estimates that 90 percent of potential Bali real
\nestate buyers have not bought property in the past because they
\ncould not enjoy benefits similar to outright ownership. Now they
\ncan.
\n Lawrence stresses that although his information is from a very
\nreliable source, anyone wishing to purchase property under this
\ntitle should seek out an attorney who is knowledgeable about this
\nlaw and who will review the terms and conditions of the Hak Pakai
\n(Right of Use) land title with them.<\/p>\n
Lawrence says that a recent change in the lending policies of
\na major international bank is also enormously encouraging to the
\naverage buyer.
\n Using other people's money is the most exciting and most
\nprofitable way of buying real estate. The bank's new approach
\nwill come as heaven-sent news to Bali real estate investors who
\nhave already been earning extremely handsome returns through full
\ncash purchases.<\/p>\n
He says that the bank in question has already begun lending
\nmoney to purchase properties in Jakarta and is now starting to
\nlend money in Bali.<\/p>\n
The interest rates are substantially higher than in most
\ncountries primarily because the bank faces substantially more
\nrisk, especially since the loans are made and repaid in rupiah.
\nThe bank hopes to have euro and US dollar loans "in the near
\nfuture".
\n The loans offered by the bank include;
\n * Housing loans (first mortgage with installment payment scheme
\nand home refinancing (second mortgage).
\n * Home refinancing (second mortgage with
\ninstallment\/revolving\/overdraft)
\n * Currency: Rupiah
\n * Maximum loan amount: Rp 2 billion
\nLoan amounts up to 80 percent of the house value, 70 percent of
\napartment and 70 percent for house-shop-office.
\n * Terms include: House 1 - 20 years, Apartment 1 - 10 years,
\nHouse-Shop-Office 1 - 10 years.<\/p>\n
Lawrence plugged the high interest rates and terms of the
\nloans into a cash flow scenario model for a typical three bedroom
\nluxury freehold beachfront villa complex in Bali that he has just
\nstarted developing.<\/p>\n
He took as an example a borrower seeking to purchase a large
\nbeachfront luxurious villa worth $421,000. Now he or she would
\nonly have to invest $221,000 instead of $421,000. The balance
\nwould be financed by the bank for 15 years.<\/p>\n
If the villa appreciated at an average of 8 percent per annum
\n(a conservative figure at present), after deducting all expenses
\nthe owner would walk away with an average net return of 37.8
\npercent per year while enjoying the villa for 50 percent of the
\ntime.
\n Lawrence says that when foreigners realize that they can
\npurchase Bali properties for as much as 70 percent less than
\nsimilar properties in their own countries and now do not need a
\nnominee with bank financing, the sky is the limit on demand and
\nprices.
\n He will be lecturing on these developments and on the Balinese
\nreal estate market at a series of seminars in Asia and Australia
\nover the next few months.<\/p>\n
One of the free seminars will be held at the Jogjakarta Hyatt
\nHotel, Yogyakarta, on Sept. 23 from 6:30 p.m. to 7:30 p.m., and
\non Sept. 24 from 10 a.m. to 11 a.m. -- PT BALI real estate agent<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/foreigners-eligible-for-land-title-for-up-to-90-years-1447899208",
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"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
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