Govt says foreigners can buy homes
Govt says foreigners can buy homes
JAKARTA (JP): The government has pledged to eliminate
bureaucratic barriers in the sale of property to foreigners in a
bid to help revive the country's sluggish property market.
State Minister of Land Affairs Hasan Basri Durin reiterated on
Tuesday that foreign nationals were entitled to own properties in
the country as stated in a 1996 government regulation.
"Selling properties to foreigners is a way to raise foreign
exchange earnings and to help our ailing property industry,
Therefore foreigners must face no barriers from buying property
here," Durin told a property forum.
Durin said government regulation No 41, 1996, allowed
foreigners with legal permits to stay in the country to buy
property.
However, since the law was enacted in 1996, followed by
several implementation guidelines issued by the Office of the
State Minister of Land Affairs as well as by the Office of the
State Minister of Housing in 1997, the law had not been
successfully implemented, he said.
"The regulation exists, but not many people are aware of it,"
he said.
According to government regulation 41 in 1996, foreign
nationals with permanent stay permits and those who regularly or
seasonally visit the country on business trips are allowed to own
one property in the country.
The regulation cites that, during their stay in Indonesia, the
foreigners must "give benefits to the nation's development ...
(and help boost) the economic growth and/or create jobs".
These include those who conduct businesses or who invest in
the country, and those who are involved in improving people's
welfare, or in education, religion, science and technology, law,
politics, communication and mass media, defense and security.
Each foreigners is permitted to buy either a home, a
condominium, or an apartment unit.
They can only purchase homes larger than 70 square meters with
adjoining land of no smaller than 200 square meters. If buying an
apartment it must be no smaller than 54 sq m.
The houses or apartments must not be in low-cost projects
subsidized by the government.
Durin, however, acknowledged that many potential foreign
buyers were hampered by bureaucratic procedures regarding the
title of the property.
The regulation cites that the foreigners can obtain property
complete with a land-use rights (the rights to use) certificate.
There are four other land titles existing in the country: the
ownership land title, the building-use title (the rights to
build), the business property title and the lease title.
In Indonesia, most property owners hold the building-use
title, instead of land-use title, he said.
Before a foreigner can make a purchase, the property owner
must switch the property's building-use title to the land-use
title so that the sales can take place, the process of which
could take about six months time.
This often discouraged the buyers to purchase the property, he
said.
During said the property owners and local buyers still prefer
to hold building-use certificate instead of the land-use title,
although the differences between the two are very small.
Land-use title is good for 25 years, after which it can be
extended for 20 more years. The title can be renewed for another
25 years, so that in total, property owners can have 70-years of
land-use title.
Building-use titles are effective for 30 years and can be
extended for another 20 years, after which they can be renewed
for another 30 years.
However, holders of building-use title can eventually convert
their land titles to ownership title while holders of land-use
title can only be switched to building-use title.
The property sector is among the worst-hit by the prolonged
economic turmoil.
The rupiah's loss of 70 percent of its value against the U.S.
dollar since August last year had diminished people's buying
power, slowing down property sales, as well as inflating much of
the property developers' offshore loans. (das)