Foreign Property Ownership Proposed to Be 70 Years
Wednesday, 11 October, 2006 | 12:33 WIBTempo Interactive
, Jakarta: The Public Housing Ministry has proposed that foreign parties’ right of use on properties in Indonesia be extended from the current 25 years to 70 years.
The extended period is regarded as already sufficient enough to attract foreign parties’ interest in investing in the property sector in Indonesia.
M. Yusuf Asy'ari, the State Minister for Public Housing, said this extension would require an amendment to the State Decree No.5/1960 on Agrarian Matters.
However, the amendment process can be put to one side if the extension is already needed as soon as possible.
“The way for this to be done is by giving automatic extensions,” he told Tempo.
Yusuf acknowledged that the Public Housing Department still had limited authority as regards the foreign parties’ right of use extension.
The authorized party to follow up on the proposed extension is the National Land Agency (BPN).
The idea of extending foreign parties’ right of use was previously mentioned by Lukman Punomosidhi, Head of the Central Indonesian Real Estate Developers Association (REI).
“Not necessarily 99 years like in Singapore, 60 years is enough,” he said.
Lukman emphasized that foreign ownership of property in Indonesia would be extremely beneficial, in terms of attracting investment and foreign exchange as also creating job opportunities.
According to his calculations, potential foreign investment would be US$5 billion.