Buying land on Flores island and building your “dream house” is something many people consider. Firstly, be aware that the Indonesian Law is very different from the Western law, including the fact that only an Indonesian citizen can own a property. Fortunately, it remains quite possible to invest safely in strict accordance with certain procedures and especially in surrounding himself with skilled lawyers and the right real estate agency.
As one of the most beautiful islands in Indonesia, Flores is the main gate of the fascinating Komodo National Park, which is one of the new 7 UNESCO natural wonders. The island of Flores attracts more and more visitors, who are seduced by the beauty and the richness of this often-unknown island. Indeed, here they can marvel at the world’s most exotic underwater life, dive with dolphins, turtles and majestic manta rays, swim in pristine lakes and waterfalls, explore traditional villages, have a rest on a pure white or pink sand beach, and discover the prehistoric Komodo dragons in its last natural habitat.
Furthermore, Flores is becoming a unique destination with a high economic growth, which offers attractive investor opportunities. Moreover, the fast development of the economy is strongly support by the government. Thanks to huge investments, there are a lot of new infrastructures, such as the Labuan Bajo's Airport, which connects the island and Bali. In addition, it will provide soon new direct flights from Singapore, Jakarta and even more from Australia. This is the reason why a lot of Indonesians and expatriates have already bought a piece of paradise in Flores.
There are four required documents:
-the first one establishes that the foreigner gives money to the Indonesian name holder to buy land and property and the Indonesian gives this land and property to the foreigner to use it, on his own free will. The document also describes that the name holder grants the foreigner permission to sell, to rent it out or to rebuild the house or property. It states that the agreement, if necessary, transfers automatically to the legal heirs, from both the foreigner and the name holder. It states that all of the property costs (electricity, water and taxes) have to be paid by the foreigner. The official 'Sertipikat' will be in the foreigners possession as well as the statement of cession, signed by the name holder. It is only with this 'Sertipikat Hak Milik' that it is possible to sell the land.
-in the 2nd document the property's selling is granted to the foreigner. The name holder gives his explicit permission to do so.
-in the 3rd document the name holder gives permission to rent out the house or property.
-the 4th document commits the name holder to co-operate, if the time ever comes that foreigners can own land and property in Indonesia, in making the foreigner being the new name holder on the 'Sertipikat'.
In case the law changes in the disadvantage of foreigners, the name holder will co-operate in changing the agreement into a lease-contract of 50 years with option for another term.
You must select the right person to “own” your property or land. This may take some time and asking around. Talk with foreigners in your area and take your time. Properties can be owned by companies, such as a PT or a PMA. A PT is an Indonesian “Limited” and a PMA is a foreign Investment company, which can be owned 100% by foreigners. The PMA property license has to be renewed every 20 or 30 years. Setting up a PT costs about 7 to 10 million rp and a PMA around 35 million rp.
Since March 2004, the following laws are in effect in Indonesia:
The government offers foreign Investors land rights that are relevant to the nature of their business. Prospective buyers of land for any purpose should consult the local government authorities on land use, planning and zoning. Based on a Presidential Decree issued in June 1996, foreigners domiciled in Indonesia are allowed to own one residential property. To meet the regulations of ownership of a house or an apartment, a foreigner must be deemed to be “beneficial to national development” and must be either:
-An Indonesian resident (permanently domiciled in Indonesia) in possession of a permanent resident permit
-A non-resident (domiciled in Indonesia only at particular times) in possession of appropriate visit and immigration stamps on his/her passport.
Ownership is limited to 25 years, and can be extended for another 25 years, which the foreigner will obtain if he that the foreigner remains an Indonesian resident or meets the status requirements.
If the foreigner departs from Indonesia, the property must be sold or transferred within one year after departure.
If the foreigner or his family does not use the house for more than 12 consecutive years, then the foreigner forfeits the “being domiciled” status, for the purpose of owning residential property.
