Govt urged to lift ban on foreigners owning homes

Abdul Khalik, The Jakarta Post, Jakarta

It may still be a long and winding road for foreign nationals to be permitted to legally own property in the country, but the idea has apparently gained support from legal experts.

Noted legal expert Frans H. Winarta said that it was the right time for Indonesia to allow foreigners to have property rights, especially apartments or condominiums, to help boost the country's property sales and economic activity as foreign investors would feel welcomed.

"We have nothing to lose by allowing foreigners to own apartments or condominiums as the apartment or condominium building will be owned by many people, and it doesn't include the land on which the building is built," he told The Jakarta Post.

Frans argued that the only reason Indonesia prohibited foreigners from owning property was the excessive fear of foreigners, who had in the past occupied the country for hundreds of years.

He said that Indonesia could not compete with other countries, such as China, Thailand or Singapore because the country had an outdated legal system, especially on property laws.

Frans called on the government to amend the property law to enable Indonesia to compete with other countries in attracting more foreign investment.

"The improvement of the property law to allow the ownership of apartments or condominiums, would surely attract more foreign investment as foreign businesspeople could have more certainty over their property, and investment here," Frans said.

Law No. 5/1960 on land rules that only Indonesian citizens have property rights over land and any kind of buildings, including apartments and condominiums. A foreigner is only allowed to use a building or land for a maximum of 25 years.

To be able to stay or open an office in Indonesia, most foreign businesspeople rent apartments or other property.

Many foreigners married to Indonesians or those who simply want to retire in the country have long complained that they cannot buy and own apartments or houses here.

Developers and property analysts had in the past proposed to the government to allow foreigners to buy and own apartments in order to help the property business in Indonesia.

Panangian Simanungkalit of the Center for Indonesian Property Studies (CIPS), for instance, argued that there was no reason for the government to prohibit foreigners from owning apartments as other countries such as China, Thailand and Singapore have long allowed foreigners to own apartments and condominiums.

As an illustration, he said that if only 1 percent of the around five million foreign tourists and businesspeople who came to Indonesia every year bought apartments, the country could earn hundreds of trillions of rupiah.

Noted lawyer and lecturer at the University of Indonesia Luhut M. Pangaribuan said that Indonesia had no choice but to upgrade its legal system, including its property law, to be able to compete with other countries in the era of globalization.

"Indonesia has to amend the law to be able to compete. Giving the right to foreigners to buy and own an apartment or condominium will add to Indonesia's legal certainty. It is just a building that is shared with many people, and we are not talking about a foreigner's right to buy and own vast amounts of land here," he told the Post.