Monday, March 12, 2012

Foreign home ownership in Indonesia now a possibility

Foreigners may be allowed to own property (limited to condominiums) in Indonesia, if the government green-lights a new regulation to be implemented in May this year.

Indonesian land ownership laws have long prevented its property market from being open to foreigners. Currently, a foreigner may lease a property for 25 years and can extend his lease for additional periods of 25 years and 20 years (70 years altogether).

The impending regulation plans to change the situation by simply giving foreigners the right to apply for the purchase of a Building Ownership Certificate (SKBG), which is totally separate from land rights. It also plans to determine which cities will allow foreign home ownership. At the moment, Bali, B atan and Jakarta have been short-listed.

“They can own apartment units under the SKBG without having the land,” said Pangihutan Marpaung, the deputy on formal housing at the Public Housing Ministry, adding that foreigners could hold SKBGs for 60 years and may be able to extend their lease by another 60 years, making condominium ownership in Indonesia more competitive than in Singapore, which permits only 90 years of ownership. Also, unlike the right to lease, the SKBG can be transferred and traded.

The regulation will, however, introduce its own restrictions. Non-nationals will not be allowed to participate in condominium resident associations, which, by law, can manage condominiums and present residence-related matters to the government and property developers.

The regulation will also restrict how many units in any one condominium tower can be owned by foreigners. Pangihutan said the ministry is contemplating a maximum of 40 percent foreign ownership per condo tower.

View the original article here

Source From Property Guru

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