Buying a House

[azrielariel]

Short version is we're thinking about moving there and buying a place. Buy as in right of ownership. My wife and I are both U.S. citizens but our two children, aged 4 and 6 are dual citizens of U.S. and Indonesia. Her idea was to place the house under her mother's name with our two children as co-owners. After doing some research it appears there is no age restriction on the owner of property. So, in my opinion there is no need to have the mother involved, or is there? I'm already aware this situation will only last as long as the children hold dual status which is limited to when they turn 17. That gives us 11 years in paradise.

I want to avoid a potential problem if the mother passes and her siblings who are all Indonesian decide they want to take it as part of the family inheritance. The father is already passed. Under her plan it seems to me that the mother would still have at least one third up for grabs by the siblings if there were so inclined. Is there a way to do this or should I resign myself to a long term lease. I'd like to keep the peace with everyone and avoid a potential problem down the road.

 

[Davita]

Hi azrielariel and welcome to the forum.

Freehold land in Indonesia (Hak Milik) can only be owned by an Indonesian citizen. Your children, of dual-citizenship, therefore cannot own Hak Milik land. If they ever revert to single Indonesian citizenship...they can.

Your mother-in-law can own the property but it will be titled in her name and will belong to her even if you paid for it. There can be a trusting understanding that it's yours and it can state, in the deeds (Akta Pernyataan), that she permits you guys to live there for free in perpetuity.

If the M-i-L passes your wife could inherit but, unless she changes back to WNI, she will have to dispose of the Hak Milik property within one year.

Most foreigners prefer to purchase the 'right to use' (Hak Pakai) property, which is a lease recorded in the land office in the foreigner's name. It can then be sub-leased, mortgaged or resold. If an Indonesian wishes to buy later it can be reverted to Hak Milik...for a fee!

 

[azrielariel]

So, only a 100% died in the wool Indonesian not tainted by a foreign nationality can own freehold. Oh well, so much for that idea.

I guess that leaves us with just leasing which is ok by me. We've looked at properties all over and the overwhelming majority where we can do a long term lease for many years is in Bali. We've been there a few times and I absolutely love it. It's quiet, peaceful, and hot with plenty of humidity. My kind of weather. Most of her family lives in the Jakarta area and I haven't seen much there where we can get a long term deal. Didn't really look very much but we're limited to the on-line listings which I suspect are limited as well. Then again, maybe living on a different island away from the inlaws isn't such a bad idea

It probably just takes a some looking once we have boots on the ground but eventually something will come up. From what I've read property seems to move very slowly in terms of sales and things are very negotiable.

 

[Bad_azz]

I would advise you to visit & rent for a year before committing to a long term lease, that way it gives you plenty of time to look at places & areas that might suit you.
I am curious as to what visas you intend / hope to have for this long term life here though. Also with young children, you need to consider what schooling you want for them & the availability / price of decent schooling in the area you choose. (I am sure you have already considered this).

 

[azrielariel]

I'll have a retirement visa and from what I've read before she will to or it will be some other version where she gets some variant of her nationality back and can sponsor me. I can't remember the details right now and I know one is cheaper than the other but either way is ok. I had it explained already and having chemo brain I forget things quite readily.

With the two children we'll need to get them in an international school which from what I've seen isn't cheap but one must do what one must do. I'm a little on the young side to be calling it quits so I can't very well make the little ones suffer for what life tossed my way. Going there in the past it was a much slower pace life style and to me peaceful. Just what the doctor ordered. I don't need to work anymore so why not.

The last couple times we were there we stayed at her mother's house which is in the Jakarta area. I agree that it might be a good idea to test the waters and neighborhood in a particular area before committing a large amount to a place that ends up being something we don't want.

 

[Bad_azz]

If you intend to make a permanent life here for you & the kids, there are other good & cheaper options than International schools.
Again, that will depend on where you choose to settle.

 

[azrielariel]

I suppose it does matter where we end up. I'm assuming for the moment that our two little ones will eventually want to come back. The idea is to give them a better than average chance at success here getting into a good college. Whether the wife and I come back or not is debatable. It depends on how our time there goes.

The school thing needs looked into some more because it doesn't necessarily correlate one to one the amount paid versus what you get. Paying nearly $2000 a month per child for a private school is kind of steep and likely exorbitant especially in a foreign country where the average income is under $400 a month. I'll need to look a little closer.

 

[Davita]

You say the kids are now 4 and 6. I would think that at that age the life experience/knowledge you are providing, plus any language skills, by coming to live in Indonesia and the travel I'm sure you will take them on, will far outweigh their long-term education needs to fit into the USA college system.
I'd suggest you have a few years to figure something out for the latter.
Take the plunge....I feel sure you won't regret but listen to B_A's advice, and others, to guide you past the pitfalls.....and be wary. Indonesians can be pretty adept at separating you from your money.

 

[azrielariel]

I'm more than aware of how they will try for a "Bule" price. It's expected I supposed. With incomes being what they are and anyone sporting a ghostly appearance it's going to garner attention of presumed wealth.

My routine is to always dress and act like I have nothing. I do that here. Salespeople in general will try to get you if they think you can pay more than the bottom price. No button shirts and no expensive looking watches. Jeans, a t-shirt, and a cheap local watch. Works wonders to get just one glance and nothing more. Flash it and you'll lose it.

I haven't looked in depth at the school thing but I suspect a lot of that price is nothing more than prestige. Bragging points for a parent to show off with. In this case their mother. I don't care about that because I've already learned that once you get past a certain price the value given for money paid drops off.

 

[Bad_azz]

Religion pays a part- for example if you are Christian but not a strong practitioner, I know of a couple of decent schools in Jakarta, that aren't overly bible bashing. & charge about 1million IDR a month.
Other places I have no idea about other than Bandung- there is a very good school, or two there. Or so I am told.

The thing is you need to balance the whole education thing with the lifestyle- so again where you will live does enter strongly into the equation- not just for school traavelling distance, but also quality of life for your kids, who they will play with, how they will integrate into the local community. Obviously if they attend a local school they will make friends nearby to hang out with ... & all that jazz.

 

[Jaime C]

We had our daughter in a Catholic preschool in Bandung, which I thought was mostly fine. The monthly fees were $50-60 a month for 3 hours a day. There were an enrollment fee and some other nonsense fees, but nothing too bad.

English and other languages are often taught as second languages in higher grades.

 

[waarmstrong]

Pick a school first. Then arrange for housing w/i a reasonable commute, timewise. I suggest you rent or lease so you are not tied down once the need to be near school passes. If you wish your kids to be conversant with their mom's culture & language, the sooner you move, the better.

 

[azrielariel]

We're pretty much committed to renting a place. I've already looked at the possible outcomes of purchase and it would create a financial moral hazard with inheritance and so forth. I agree, we should find a suitable school and build circles from there outward for the home. Transportation there is very slow and what makes it worse is two crumb crunchers who do anything and everything to be late.

 

[waarmstrong]

“Sufficient unto the day is one baby. As long as you are in your right mind don’t you ever pray for twins. Twins amount to a permanent riot. And there ain’t any real difference between triplets and an insurrection.” Mark Twain