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Foreign property ownership: Get it right or get rid of it
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To realize the government’s promise to facilitate ownership of real estate by foreigners, in late 2015 the government issued a regulation replacing the 1996 law on the subject. (Shutterstock/File)
P
romulgations on various regulations to help foreigners own property in Indonesia are not making life easier for either developers or foreigners. Instead, new confusion emerges.
Central Statistics Agency (BPS) data show that 1.11 million foreign tourists came to Indonesia last December, 1.03 million in January 2017 and 957,580 in February 2017. On average, 1.03 million foreign tourists come here monthly.
If only 10 percent of them were interested in purchasing condominiums units in Indonesia and 10 percent of the interested tourists followed through on the idea, foreigners would buy 10,320 condominium units every month. Not a bad number.
To realize the government’s promise to facilitate ownership of real estate by foreigners, in late 2015 the government issued a regulation replacing the 1996 law on the subject.
This regulation was issued to support development in Indonesia and cooperation with friendly countries and to increase the number of foreigners working and doing business in Indonesia. Thus the government sees the importance of a policy to provide legal certainty for foreigners and to facilitate services and licensing to acquire land rights and residence. Unfortunately, its consequence is contradictory.
The 2015 regulation states every foreigner having obtained a domicile permit can own a residence in Indonesia. Interestingly, a domicile permit includes a visiting permit.
This makes a huge difference, since it means that a foreigner does not have to stay in Indonesia to buy a residence. It also means that a foreigner does not have to obtain a temporary stay permit (KITAS) or a stay permit (KITAP) to buy a residence in Indonesia.
