Property

Property in Indonesia for foreigners: a simple and solid construction

It is impossible for foreigners to own land in Indonesia! Up till now that is. This may change in the near future. The government, pressured by the IMF and international politics, is taken in a more tolerant position. For the mean time, you will have to settle with a contract that is legally as strong as possible and that provides you the protection you would have from a legal property. The advantage of this construction is that you do not have to pay the customary 5% conveyance tax when selling or purchasing. Another great advantage is the pretty simple adjustment in the contract if you want to sell or purchase a villa together with other people.

In Indonesia, land has to be registered on the name of an Indonesian. For years, we have business contacts with someone who lends his name and he has proven to be 100% trustworthy. That does not do much for you - we understand that - this is why we offer you a legal construction that provides maximum security. The construction includes 4 deeds that do not only include an agreement, but also describe the cooperation. It is important for Indonesian law that there is a balance between two parties. You pay the Indonesian 200000 rupiah per month in exchange for the legal protection of your property. This way, the balance is created.

Deeds

The 4 deeds describe the following:

Deed 1 describes the fact that the Dutchman gives the Indonesian money to buy a plot with a house on it. The Indonesian voluntarily gives the pledge in permanent use to the Dutchman, who may use it as his home. The Indonesian is the owner and therefore also has to look after the property. Mail and other matters with regard to the home are sent to him and he, on his turn, will send it to the Dutchman. Electricity and water bills are also addressed to the Indonesian. He receives a payment for this, as mentioned earlier. He also receives 2.000 Euro for a possible sale. In addition, the deed states that the Indonesian gives you permission in advance to sell, rent or rebuild the villa. Arrangements for passing down the property (heirs) are made in this contract. The contract also states that costs for water, electricity and taxes with regard to the immovable property are at the expense of the Dutchman.

Deed 2 arranges the sales of the property in detail and in advance and gives the Indonesian explicit permission to sell the property to the Dutchman.

Deed 3 once again states that the Indonesian has the permission to rent the property to the Dutchman.

Deed 4 when it has become possible for the Dutchman to become owner of the property, the Indonesian is obliged to cooperate. In case laws change at the disadvantage of the Dutchman, the contract with the Indonesian will be changed into a rent contract of 25 years with an automatic extension of 25 years. After that, the contract will once again be automatically extended and so on. If you would like another Indonesian partner and annul the contract with your current partner, you will be obliged to compensate him by paying the monthly allowance over 25 years all at once. By doing so, you also preserve yourself from paying a too high conveyance of surplus value for selling the property; this amount cannot be higher than the amount you paid for the annulment of the contract!