Govt urged to lift ban on foreigners owning homes

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outdated legal system, especially on property laws.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.