In yet another twist, Jokowi’s administration, through Agrarian Minister, Ferry Mursyidan Baldan, said that it will ease the ownership restriction of Indonesia property imposed upon foreigners.
“The regulation will include details on ownership periods, requirements, and rights and obligations of expatriates who will be granted the right to purchase and own property in Indonesia,” the minister reportedly said after revealing that his department is in the process of cooking up new regulation.
Under the new regulation, expats can “own” a property under the “hak pakai” or right to use title. This is in no way a “hak milik” or freehold title, but it’s the second best one. The catch is that it only allows expat to own luxury property with minimum IDR 5 Billion price tag.
The good thing about this new right to use is that it’s permanent. The titleholder can trade the ownership through transaction or pass it to his/her children. It doesn’t require the title to be renewed like leasehold property does.
controversial recent news coming from Jokowi’s office — the latest of which is his intention to make KITAS obsolete — this news is met with mixed reactions.
Fear for catastrophic economic bubble is one. Many assumed it will lead to heavy speculation. Price hike, spatial de-zoning etc will follow as a result. They suggested that the new regulation aims for specific regions instead of all cities in Indonesia. Its implementation should be limited to cities that rely heavily on trade and tourism.
The regulation is set to be implemented no sooner than the end of 2015. Many things can happen during that time. For expats eyeing to acquire property here, it’s still too soon to call for a celebration.
This is the second time Jokowi puts the limelight on Indonesia property. Earlier this year, the Finance Minister, Bambang Brodjonegoro, said that expats can only own residential property worth at least IDR 5 Billion–which translates to $350,000 in today’s currency. For some, this benchmark is still pretentiously high, and as such won’t have any influence over the market.
Many hoped that the regulation will end the confusions and whatnot surrounding property ownership in Indonesia. If it’s played right, the new regulation can lead to property boom, investors will come flocking in for a piece of property, or likewise, it can lead to property bubble that no one wants instead.
In the meantime, before becoming a property owner in Indonesia, you can always rent one of Bedforest great vacation rentals in Bali, Lombok and elsewhere… (or list your property if you own/manage one)