subject: Indonesian Property: Rules To Purchasing [print this page] Incorporated with almost 13, 500 island and 33 provinces, the Republic of Indonesia stomachs the 4th largest population in the world. With ample land and inhabitants accompanied by globalization, its assured that the Indonesian property market will flourish.
Prior to the 1960 Indonesia Agrarian Law, as a foreigner, you are denied rights to purchase Indonesia property. The land and all that it holds can only be owned by an Indonesian citizen or the government of course. Towards the millennium however, the 1996/No 5 and No 41 allows a foreigner to own apartments and other units that arent ground units. The unit exclusively belonged to the purchaser exclusively whilst the land beneath was still the developers property. The downside here was that the owner was only allowed to lease it for 70 years and he or she was supposed to renew the lease every 25 years.
The regulation on property isnt clear and still has several loopholes and ambiguities, favouring foreigners. If you prefer to own the apartment for longer than the 70 year lease period, the purchaser may sign a Convertible Lease Agreement with the apartment property office. This agreement generally implies that the emptor can legally purchase the unit but the title and deed will be under the name of the developer or by your choice, an Indonesian friend. Just to serve as a reminder, be sure to request for your Hak Pakai, the rights to use the land from the developer. Do not purchase the unit if youre not given a Hak Pakai and all in all, the Convertible Lease Agreement can proof to be very risky.
If you find purchasing land more satisfactory, as a foreigner, it is possible to grease ones palm but again, the conditions are dubious. The foreigner must first reach discernment with an Indonesian citizen, preferably a very trusted friend and must be witnessed by a first degree officer. The agreement will dub the Indonesian and the legal owner and the foreigner the rightful owner. This is not a guaranteed transaction and many have lost money due to the change of hearts by their Indonesia partners.
The safest way I presume to own Indonesian property would be to have a direct relative that is an Indonesian. No questions will be asked and youll be bound to no regulation but Indonesia relatives dont come along every day.
by: VanessaJean
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