Upcoming changes to home ownership laws?

nd_eric_77

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This sounds like good news for the expat community and could give a desperately needed boost to the economy, but it could also result in a surge of investment purchases inflating the hell out of property prices in Jabodetabek & Bali.
 

Helpful Herbert

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It will make very little difference. Foreigners are not allowed, by constitution, to buy land. So all they can do is increase the lease terms on apartments. They can't do anything that would actually allow a foreigner to be the sole owner of even 1 metre of land, unless they change the constitution first.
[reading the article, it only says that something MAY be passed, so let's wait and see what, if anything, the new law is, before considering it further].
 

scouser59

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Imho property here in the majority is in general , junk construction ,unless you get it for "next to nowt" the constant heavy maintenance costs make it a nightmare . I lived in much better solid construction places in such wonderful countries like somalia and eritrea to name 2.
 

snpark

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Yep doesn't change my views It's a renters market not a buyers. Better to keep cash in the bank and use the interest to pay rent.
If you can rent a $300,000 apartment for 15jt a month why would you buy one? It's never going to go up in value and it's a nightmare to sell. To who? Plus the uncertainty of rules laws and welcome of foreigners here. Better to rent Unless you are married and buy the land and build your own solid western style house with plumbing electrics lights etc etc and not some Balinese open plan style living which is just a con to not furnish it or build walls. Lol
 

Helpful Herbert

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Also the service charges on a $300,000 apartment can be 5jt a month, depending on the block, so definitely not a good value option.
 

macvert

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Not to mention the neighbours you may have to contend with & their plastic burning, barking dogs at all hours,, loud motorbikes & the human insinkerator next door.
At least when you're renting you have the option to gtf outta there., Man oh man, if I'd bought the place I'm renting now with sfa prospect of selling,, I reckon I;d contemplate jumping off a cliff.
 

Nimbus

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It will make very little difference. Foreigners are not allowed, by constitution, to buy land. So all they can do is increase the lease terms on apartments. They can't do anything that would actually allow a foreigner to be the sole owner of even 1 metre of land, unless they change the constitution first.
[reading the article, it only says that something MAY be passed, so let's wait and see what, if anything, the new law is, before considering it further].
That is not true. Indonesian constitution does not specifically prohibit ownership of land by noncitizens. Article 33 section 3 says (loosely translated): “Earth, water, and natural riches contained therein are controlled by the state to increase people’s prosperity.”

The state can pass any law governing ownership of land by citizens and noncitizens, as long as it doesn’t run counter to “people’s prosperity” in general.

It is the Law no. 5 of 1960 that prohibits ownership by noncitizens. They can change the law without running afoul of the constitution.
 

centurion

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Nimbus

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I think the law has a real chance of passing this time, when you look at the other participants of the Webinar.

“...Mr James Riady of the Lippo Group, Mr Muktar Widjaja of the Sinar Mas Group and Mr Sugianto Kusuma of Agung Sedayu group.”

These are konglomerats holding humongous amount of property. Covid makes them sit on a lot of stagnant assets, and I bet they’re willing to grease a lot of hands to get the law passed. Note that they promote the seminar in Singapore, hoping to entice wealthy Singaporeans to buy. Still, the law is not gonna be exclusive to Singaporeans, so you can reap the benefit too.

Once again in Indonesia, where reason fails, greed prevails.
 

atlantis

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I think the law has a real chance of passing this time, when you look at the other participants of the Webinar.
It is the Law no. 5 of 1960 that prohibits ownership by noncitizens. They can change the law without running afoul of the constitution.
50 laws or amendments are included in the prolegnas 2020-2024. NONE of them include a rewriting or an amendment of UU 5/1960.

Therefore, the only way to pass an amendment to UU 5/1960 would be through a PerPU, which means that if a consortium wants to grease hands to a change in the Land Law, the hand to be greased are the one of the Top Man of the State first. Still if a PerPU is passed by Pak Presiden, the greasing job wouldn't end here because the PerPU has to be accepted or rejected by the DPR at the next DPR session.

On the Prolegnas topic: If 50 laws are indeed included in the prolegnas 2020-2024, only 1 so far has been passed (an amendment on the mining law if I recall correctly), 2 are on the step of Pembahasan, 3 are on the step of Penetapan Usul, 4 are on the step of Harmonisasi, 1 is on the step of Penyusunan... and 39 are left untouched by our beloved DPR. :sneaky:

Considering the above, I am confident that akhir bln Agustus I won't have my name on a SHM. Please note that I have said "akhir bln Agustus" without stating a particular year.

On the PerPU topic: It would be too long to explain what a PerPU exactly is but let's say it's a government regulation decided and signed by the President which has value of Law (and therefore which could initiate a change in UU 5/1960) when the nation face a COMPELLING URGENCY (ex: disaster,...etc). So, definitely the C19 crisis could be a starter for a PerPU. Now, does anyone seriously believe that passing a PerPU which says that the Nation urgently requires the help of foreigners through foreign investment and that allowing foreigners to get pieces of the Nation land is THE way for the Nation to go through this disaster, is something the Nation would accept easily? Would be a great gift for the Nationalists zealots and I wouldn't be surprised if it would be the first PerPU ever rejected by the DPRs who would see a super gift to boost their status of saviors of the Nation.


The only thing which may happen imho is another twist through a PerMen (which can only help to implement witout modifying UU) of some sort. A new leasehold twist. SHM titles will remain WNI only goodies. I don't say it can't be an improvement. Just saying it won't have anything to do with SHM.
 

Helpful Herbert

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Yes, they'll try and increase the lease terms on apartments to 60 or 90 years. And after all the big problem Riady and co. have is that no-one wants to buy their new-build apartments at the moment, so that is probably their aim, to make them a bit more attractive to foreigners.
 

centurion

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No smart money would invest in any "titles" created by a PerMen. What comes with a Permen can go with a new PerMen.
 

[email protected]

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If they even changed the leasehold system here, it would be wonderful if it was based on the leasehold system in the Australian Capital Territory where the crown (government) owns the land and the buyer leases it for 99 years. Despite being a lease, the land becomes a tradable commodity just like freehold land but overall ownership remains with the crown.

A simple system but wont happen here!
 

snpark

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You can do that here, how do you think foreigners sell apartments to other foreigners, you sell the balance of the lease, only here the lease is only 25 years for "land" usually

In Dubai the leasehold for land and apartments is 99 years but the building construction warranty and insurance is for 25 years only due to sand and wind erosion, so basically at least once every 25 years you have to rebuild your own house because it has fallen down or burnt down if it's an apartment

In fact after only a few years you will already have severe structural damage and erosion to your fancy $2mill villa
 

atlantis

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Yes, they'll try and increase the lease terms on apartments to 60 or 90 years.
It would be wonderful if it was based on the leasehold system in the Australian Capital Territory where the crown (government) owns the land and the buyer leases it for 99 years.
A similar very long leasehold was included in the the first version of the Investment law of 2007. It was granting a 35 years old lease and an extension of 25 years IN ADVANCE on a leasehold so that it became 60 years up front. An association of farmers won the challenge in MK, if I remember well, arguing that the granting of 60 years in adance was unconstitutional due to the fact that it was reducing the principle of control by the State as defined in art. 33 (3) UUD 1945. MK cancelled the pasal and reverted it to what UU 5/1960 grants.
 

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