SBY Indicating Positive Signal on Foreign Property Ownership

JAKARTA: President Susilo Bambang Yudhoyono pointed out a positive signal over foreign property ownership policy in Indonesia.

The President said the request from the Association of Indonesia Real-Estate Companies (REI) has to be quickly responded by the Ministry of Public Housing in order to developing effective policy or regulation to manage the foreign property ownership.

“There is a statement saying that foreign ownership will take over people’s authority over their motherland. They even think the Government has abandoned their interests. The Government and REI do not have any bad intention over this issue as we will be prioritizing our national interests. Then the related parties have to develop pro-people-policies and regulations,” the President said in the 2012 national working meeting of REI, Wednesday (12/5).

According to him, Indonesia should be smart in catching up opportunities in fast growing property industry.

“The Government must be pro-business and pro-investment because this Country needs a sustained and strong economic growth. When the economy grows, it will create more jobs and revenues, so that we could drain up the revenue back into the State Budget, used for funding the construction projects. Therefore, it could be translated as a pro-people movement,” the president said.

The Chairman of the Central Advisory Board (DPP) of REI Setyo Maharso said the developers are still hoping the Government will soon issue a revision of Government Regulation No.41/1996 on Housing and Residential Living for Expatriates as part of the mandate of Law No.20/2011 on the public apartment.

According to him, the revision will facilitate foreigners to buy property in Indonesia, provide ease of residence permits, legal certainty, inheritance rights, and more.

“We can’t deny the fact that domestic business players are only acting as spectator while foreign ones are looking for buyer, sucking up income from Indonesian consumers,” Maharso says.

He explains the property industry in Indonesia can’t be contested against those in neighboring country unless the government regulation supports the foreigners to own properties in Indonesia.

“The property prices in Indonesia are much cheaper than those in neighboring countries. On the other hand, the state can also earn income from sales tax, annual tax, investor’s expenses, employment, and others,” he says.

Previously, Head of Research and Development for National Defense Agency (BPN) Maharani says foreigners may only have the rights of building.

According to the Government Regulation No.41/1996, foreigners are allowed to use as long as 25 years, extendable for 20 years, and updateable for the next 25 years.

“The rights can’t be given directly for 70 or 90 years since each request must be evaluated whether it’s feasible or not, the rights for 70 straight years violates the Basic Agrarian Law,” she says.

Setyo Maharso says Indonesian Real Estate Developers Association has prepared a blueprint of concept and aim of real estate development in Indonesia three months ago.

He added, the blueprint is expected to be part of REI to push real estate sector to grow beyond the other sectors. “Indonesian deserve to get decent house and we would like to contribute” he said.

Setyo explained blueprint and real estate development plan describe the existing data and compare it with the data of the neighboring countries to find and solve housing problems in Indonesia.

“At the end of the day, we are expected to build house for everyone, therefore the Government should make proper regulation regarding this matter, since proper housing regulation will boost economic growth considering the economic growth sustained by real estate industry,” he said.

The Vice Chairman DPP REI Handaka Santosa said the contribution from Real Estate sector to the economic growth is relatively huge, however its role is less understood by all parties.

Real estate sector such as residential, shopping centers and office buildings are the samples that support economic growth, those sectors are involving heavy and light equipment industries, as well as house-hold industry. There are many industries will develop fast when  real estate sector grow significantly,” he said. (t03/t07/t08/dpr/msw)