A bill currently being drafted by the Indonesian government is giving
hope that foreign buyers, could soon own
properties in the country.
Existing rules that allow foreigners to occupy a building or land for 25 years are now being
revised and awaiting approval from the House of Representatives and the
Coordinating Economic Ministry.
Agus Sumargiarto, Deputy for Area Development at the Public Housing Ministry, said foreign buyers need to
comply with strict requirements to own a property. These include having
a business in Indonesia and limiting the sale of the property to just
the government.
However, the bill could break the country’s law
on land titles, which is why the National Land Agency (BPN) and the
House are carefully handling the issue.
As such, wealth
management firm Religare is sceptical whether foreign property ownership will
ever be possible, considering “the complicated issue involving the land
title (agrarian issue) remains unsolved”. Moreover, more than 95
percent of condo buyers in Indonesia are locals, hence developers are
content with the existing law.
“Foreign ownership of condos could
benefit the high-end segment where Indonesian property could then be
compared to similar products in the ASEAN region (Indonesian luxury
condos remain at approximately 1/10th of Singapore and half of Kuala
Lumpur). We would not put much hope on this issue being solved anytime
soon,” Religare added.
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories email romesh@allproperty.com.sg
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