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SG Uncertainty raised over foreign property ownership in Indonesia

Property Here - Thursday, August 01, 2013

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A bill currently being drafted by the Indonesian government is giving hope that foreign buyers, including Singaporean expatriates, could own properties in the country.

The existing rules which allows foreigners to occupy a building or land for 25 years is 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 if 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 ½ 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