The Indonesian government plans to issue a regulation that would allow foreigners to own property in Indonesia, albeit restricted to condominiums only, with implementation effective as of May this year, a local media reported here on Monday.
In the past, efforts to open the property market to foreigners were hampered by the prohibition on land ownership, which would remain intact as demanded by existing laws.
The upcoming regulation seeks to overcome that problem by simply providing foreigners with the right to apply for the purchase of a Building Ownership Certificate (SKBG) that is completely detached from land rights.
"They can own apartment units under the SKBG without having the land," Pangihutan Marpaung, a deputy at the Public Housing Ministry, was quoted by The Jakarta Post as saying.
Pangihutan said foreigners could hold SKBGs for 60 years with the possibility of extending them by another 60 years, thus making condominium ownership in Indonesia more competitive than in Singapore, which allows 90 years of ownership.
"There is a good chance for extending the certificate for another 60 years, but we are still discussing it further," he said.
Under present rules, foreigners may lease property for 25 years that can be extended for further periods of 25 years and 20 years, or 70 years in total. Unlike the right to lease, the SKBG can change hands and can be traded.