Rights of Use on Property

Oct 11th, 2006, in Business & Economy, by

It is proposed that non-Indonesians be able to have right of use over land for up to 70 years.

Presently foreigners have rights of use on real estate for a maximum of 25 years but today, 11th October, the minister for Housing M. Yusuf Asy’ari proposed that this period be extended to 70 years, as a method of attracting foreign investment in the property sector.

The minister said that in order to bring about the change Law Number 5 of 1960 would have to be amended, but, if it were wished, the amendment process could be bypassed by the means of granting automatic extensions to the current 25 year licenses.

However he admitted that his own department was limited in what it could do directly to bring about the change, the authority largely resting with the National Land Board.

Yusuf received support for the idea from the head of Real Estate Indonesia, Lukman Purnomosidhi, who recommended that the maximum period be set at 60 years. Lukman went on to say that relaxing the rules on foreign ownership, or more correctly rights of use, of property would prove a great boon to the economy and create many new jobs. He estimated the potential value of foreign real estate investment at $5 billion. He mentioned that neighbouring Singapore had right of use terms of up to 99 years for non-citizens.


March 25th 2007.

The government is currently proposing a regulation to be included in the draft bill on investment which would allow foreign businesses to own properties if they make direct investments in Indonesia.

The current draft bill will guarantee that foreign businesses can have a HGU (Land Title for Construction Purposes) for 50 years extendable to another 30 years. In the possible new law foreign individuals could also own title for 45 years and could be extended for another 25 years, provided they make a (separate) investment in the country. antara

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