On Thursday 23rd July, a cabinet minister declared that Indonesia is set to relax property rules for foreign buyers.
Foreigners will have better opportunities to own a home in Indonesia, an action that may cause a major change in the current economic slump as a result of the COVID-19 pandemic and increased unemployment.
Sofyan Djali, the Agrarian and Spatial Planning Minister, announced in a webinar, “we will have (the new property rules) ratified into law by end-August.” The laws will allow foreigners to have the same rights as local Indonesian buyers. “This is the commitment from parliament and President Joko Widodo has requested for such a timeline to be the deadline,” he said.
The webinar was attended by Indonesia’s top property tycoons including Mr. James Riady of the Lippo Group and Mr. Muktar Widjaja of the Sinar Mas Group.
The Indonesian property sector supports at least 170 industries and employs more than 30 million people. Approximately 11% of Indonesia’s population works for the Indonesian property sector.
With the effects of the COVID-19 pandemic, Indonesia’s economy has faced a slump and many individuals have been made unemployed. By changing property laws for foreigners, the government aims to generate more income for Indonesia’s economy.
“Foreigners buying homes in Indonesia are bringing in money,” said Mr. Muktar.
At the moment, foreigners are only allowed to purchase apartments in Indonesia and struggle to receive bank loans because of the 30-year leasehold titles they receive.
On the other hand, Indonesian citizens are able to buy all properties including apartments and landed homes with freehold tenure or leaseholds with guaranteed extensions.
It is not clear whether or not the relaxed property laws will allow foreigners to purchase landed houses at the moment. However, Mr. Muktar has suggested that foreigners be given access to financing support and be allowed to pledge the title of the units.
Source: Straits Times