Indonesia's property sales growth is expected to accelerate this year to 10-12 % this year and new amendments to ownership regulations could impact your situation! This month is filled with property news. Before we get into that we would like to take the time to wish you a happy and prosperous 2016! We hope to be at your service as we have continued to be in the last 10+ years. With that out of the way let’s get into the more interesting part: On Monday 18th of January, Eddy Hussy, the chairman of property industry group “Realestate Indonesia (REI), stated that Indonesia’s property sales growth is expected to accelerate to 10-12 % from 7-8 % last year. Hussy told reporters in Jakarta that the improvement in economic growth, the implementation of government stimulus packages, combined with infrastructure development will help rise sales the year.
Indonesia's property sales growth is expected to accelerate this year to 10-12 % this year and new amendments to ownership regulations could impact your situation!
This month is filled with property news. Before we get into that we would like to take the time to wish you a happy and prosperous 2016! We hope to be at your service as we have continued to be in the last 10+ years. With that out of the way let’s get into the more interesting part:
On Monday 18th of January, Eddy Hussy, the chairman of property industry group “Realestate Indonesia (REI), stated that Indonesia’s property sales growth is expected to accelerate to 10-12 % from 7-8 % last year. Hussy told reporters in Jakarta that the improvement in economic growth, the implementation of government stimulus packages, combined with infrastructure development will help rise sales the year.
Reuters stated on the 18th of January, that the Indonesian economy is forecast to grow around 5.2 percent in 2016. Latest data showed it grew 4.7 percent in the third quarter of 2015, it’s slowest since 2009.
The government has been introducing stimulus packages to boost the economy, including relaxing rules on house ownership permits for foreigners.
Hussy also said he hoped the central bank will further lower policy interest rates to ease borrowing costs for property buyers. Bank Indonesia last week cut rates for the first time in 11 months to support growth.
Other big news this month is that on the 25th of December, President Joko Widodo signed a Government Regulation (Peraturan Pemerintah, PP) on foreign home ownership in Indonesia. The president’s decision to sign the PP was to address the previously ambiguous regulations on the matter of foreign property ownership in Indonesia.
PP No. 103 of 2015 defines foreigners residing in Indonesia as those who do not hold an Indonesian citizenship and who contribute to the country through business, working, or investing in the country.
As stated in the PP, “Orang Asing dapat memiliki rumah untuk tempat tinggal atau hunian dengan Hak Pakai.” This translates to: foreigners can own a house with the Right of Use (Hak Pakai). In this statement, ‘Orang Asing’ relates to foreigners who hold residency permits in Indonesia.
If a foreigner owning property with the Right to Use were to die in Indonesia, the PP states that their house or residence can be inherited to a foreign heir, who must also own a residency permit.
The PP also states that Indonesians married to foreigners have the right to land ownership just as other Indonesians do.
Property which foreigners are now allowed to own are (a) Rumah Tunggal di atas Tanah (houses): (1) Right of Use; or (2) Right of Use over Hak Milik (Right of Ownership); (b) Sarusun (Satuan Rumah Susun)Apartments.
According to the PP, foreigners are allowed to own property for a period of 30 years, which can be extended for another 20 years. The PP mentions the right to renew after extension for a maximum period of 30 years.
PP No. 103 of 2015 also states that if the foreign owner, or foreign inheritor, of a property is no longer residing in Indonesia, they must either release or pass on their property within one year to a qualifying party. Failure to comply within the one-year time frame will result in the government taking control of the property.
Further details on the release or transfer of rights of foreign home ownership, according to the PP, are arranged by the ministry and head of agency in the agrarian sector. The PP effectively applies since the moment it was announced by the Minister of Law Yasonna H. Laoly on 28 December 2015. Source: http://setkab.go.id/terbitkan-pp-pemerintah-resmi-izinkan-orang-asing-miliki-rumah-tempat-tinggal-di-indonesia
Even though this new regulation is not the one we were expecting, it does gives signal that the new government is starting to consider that foreign buyers are an important aspect on the market. Recently there were several conferences held in Jakarta, regarding how to accommodate foreign ownership, and we hope the better end for foreign ownership. Should everything go to our expectations, it could mean that there are real game changers ahead of us. Of course, as always, we will inform you of any updates.
If you need more in depth information on how new regulations could open up opportunities for you (i.e. when you are married to an Indonesian citizen) or how they could otherwise impact you, please feel free to send us an email: info@ubudproperty.com or call us at: 62 361 970 888 or +62 361 980 880 and we’d be happy to help you.
