BISNIS INDONESIA

Jakarta, 1 August 2008: Indonesia Government will establish property ownership policy for foreign citizens by the end of this year or beginning of 2009 at the latest, after studying the proposal of Central Leadership Board of Indonesian Real-estate Association (DPP REI).

 

State Minister of Public Housing (Menpera) M. Yusuf Asy'ari said that he will co-ordinate with National Land Agency (Badan Pertanahan Nasional - BPN) to study the draft of property ownership policy for foreigners, so that regulation can be put in place.

According to him, the role of BPN is crucial in determining the policy because the regulations emphasize more on building use permit for foreigners.

''Hopefully, by the end of this year we can complete this study to establish the regulation, hence early next year it can be carried out. An evaluation team has been established," he said to Bisnis after opening the coordination meeting of Civil Servants Housing Savings this week.

Menpera Asy'ari explained that in principal foreign citizens will only be able to utilize maximum 70 years of right-to-use title and will not get certificate of ownership.
 
Promoting the Investment
 
He said that there are still misperceptions from some groups since they are worried those foreigners will control strategic sector in Indonesia. This plan, he said, exactly will promote investment in property sector.

Acquisition of property products both apartment and also commercial property by foreign citizens will increase and at the end will stimulate economy growth.
 
''In principle I support this regulation as it will increase sales in property sector." he said.

Menpera said that there are several points to be specifically discussed, for instance clauses on foreign citizens which are allowed to buy property in Indonesia, then minimum limit of product or the price of property which can be purchased by foreigners.

DPP REI in the early of July 2008 said that they have submitted property acquisition proposal for foreign citizen and institution to BPN and Menpera.

F. Teguh Satria, Chairman of DPP REI said that the regulation must be introduced as soon as possible, in order to stimulate the property sector in Indonesia.

This regulation draft proposed by REI is a revision of Government Regulation (PP) No. 41/1996. In the regulation it is mentioned that foreign citizen can purchase property product for 25 years, then it can be extended to 25 years and can be re-extended to 20 years.
 
"We believe that it would be more effective to combine them to 70 years," he said at that time.
 
License of property acquisition is not only for foreign citizen, but also for institution who would like to invest, as practiced in World property market.