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Indonesia r.e
Real estate in IndonesiaMarket of real estate of Indonesia Indonesia – the biggest island state in the world. According to the last data, its structure includes 18 108 islands from which about 1000 have resident population. The country was stretched on islands of the Malay Archipelago (Big and the Lesser Sunda Isles), the Moluccas and the western part of the lake New Guinea which were extended along the equator. Extreme western and east points of the country are divided by about 5150 km, and extreme northern and southern – 1931 km. The total area of a land of Indonesia makes 1919,4 thousand sq.km, and water areas – 7,9 mln sq.km. Largest of islands – New Guinea (829 thousand sq.km, from them fall to the share of the province of Papua 421,9 thousand sq.km), Kalimantan (734 thousand sq.km, belong to Indonesia 539,5 thousand sq.km), Sumatra (473,6 thousand sq.km), Sulawesi (189,2 thousand sq.km) and Java (126,5 thousand sq.km). Other islands of Indonesia on the area considerably concede listed, and the majority belongs to Small Zondsky and to the Moluccas. Indonesia is on a joint of two tectonic zones, at its territory the increased seismicity and an intensive volcanism (over 500 volcanoes, from them more than 220 – operating) are observed. Indonesia – the developing industrial and agrarian country with multistructure economy and the world's largest exporter of raw materials. Strategy of development of economy is based on five-year plans. Recently Indonesia endures the real construction boom. Over all country – beginning from the central regions of the capital of Jakarta and finishing the most remote corners – there is an active building of condominiums, office buildings, shopping centers, houses of complex appointment and even the whole areas. In stock market the real estate segment significantly advances a common market that is also connected with the economic growth and decrease in interest rates. Thanks to it, declared real estate prices only rose. There is such feeling that Indonesia breaks every day all new records by number of start of construction projects, but actually most part of these projects not that other as a cunning advertizing course. Actually the prices of residential real estate in Indonesia in 2007 grew only by 5,40% and fell to 1,24% in real terms (an index of primary real estate). In comparison with 2007 indicators of 2006 were a little higher: the nominal rise in prices in 2006 made 6,60%, and actual – 0,52%. The price index on real estate in real terms still remains at level, is about 50% lower than record indicators of 1994. The market of small private real estate differs from the market of large real estate. Since 2000 the small-sized real estate grew in price more than for 90% (in nominal terms) whereas large real estate objects rose in price only no more than for 40%. In real terms since 1994 the price index on residential real estate almost steadily fell, and the most considerable recession fell on the period from 1998 to 1999. During the period from 1999 to 2003 the price index on real estate in Indonesia grew by 13,6% in real terms. But after a turn of technogenic and natural disasters sharply I undermined begun there was an economic revival of the country. Pushed by a global rise in prices for oil, a consumer price index in Indonesia in 2005 I grew by 10,5%. Taking into account real estate price inflation in Indonesia in 2005 fell actually to 8,4%. Election in 2004 of Susilo Bambang Yudkhoyono the president of Indonesia as a whole became a favorable factor for stability return in the country in spite of the fact that many show discontent with that fact that its active anti-corruption position during election campaign didn't bring any serious positive changes in this sphere. The taxation in Indonesia From the faces which aren't citizens of the country, the tax on the income received in Indonesia is raised. Married couples pay a joint tax. The persons which aren't citizens of the country, pay a tax from housing delivery in rent on a final tax rate of 20% from total income. Agreements on the double taxation between Indonesia and other countries can reduce the tax size to 10%. All expenses connected with rent, aren't deductible from the income. Property transfer in Indonesia is subject to the taxation. The tax on a gain of the capital is raised in a uniform size of 20% from the total selling cost of real estate or from estimated cost for a real estate tax, depending on what cost is higher. Value added tax is raised from total income from rent of 10%. The local companies belonging to individual entrepreneurs, not being citizens of Indonesia, are assessed with a tax on the total income received in Indonesia, in a uniform size of 20%. The foreign companies are assessed with a tax on a capital gain in a uniform size of 20% from the total selling cost of real estate. The gain of the capital received by the local companies, is assessed with standard corporate income tax. Really incurred expenses and capital losses are thus considered. The size of a collectable real estate tax makes 0,5% from the estimated cost of real estate. The estimated cost of taxable real estate is expressed by a percentage share from the estimated fair market value of real estate Condominiums Real estate purchase in Indonesia Foreign citizens can get condominiums in Indonesia though to understand the formal legislation of Indonesia quite not easy. Foreigners also can buy the right of control of the landed property, but in this case there can be more legal difficulties, and degree of peace of mind received thus, respectively, decreases. Condominiums Questions of possession of foreigners joint inhabited property, that is condominiums, are regulated by the Governmental Law No. 41 of June, 1996. It isn't absolutely clear yet as the Law 41/1996 works, and meanwhile still any foreigner didn't receive the relevant document on the right of joint possession. In practice foreigners sign the Adjustable agreement on rent according to which the right to possession remains for the developer while rent is valid during the certain period of time. The adjustable agreement on rent says that in case basic laws and rules allow foreign citizens to own the joint property right, both the lessor, and the tenant will have to sign the document on the purchase and sale, allowing to transfer the right of possession of property to the foreign owner. Foreign citizens aren't allowed to have the earth in free possession. Nevertheless they can get rights to use the earth, but not on the property right. For foreigners in Indonesia there are three options of purchase of real estate: 1 . Through the Indonesian representative (intermediary) In Indonesia involvement of the local representative for the purpose of acquisition by the foreign buyer of the earth is widespread practice. The former owner has to transfer the right of possession of property to the local representative. To guarantee observance of the rights, the foreign buyer needs to sign three contracts with the Indonesian representative. a) The contract on the loan – in this contract is specified that the foreign buyer borrowed to the Indonesian representative the sum at a rate of the pokupochny cost of real estate. b) The irrevocable power of attorney – this document grants to the foreign buyer full authority to sell, hand over, put the earth, etc. in) the Contract on a constant right of use – this contract grants to the foreign buyer full authority of use of the earth and accommodation on this earth. 2 . Through the RMA Company company Penanaman Modal Asing (PMA) possesses "the right to the conclusion of transactions" in Indonesia. From the moment of the basis of the RMA company passed 30 years. It is possible to guarantee that it will exist 30 more years, and in case of further development of the project at the expense of additional capital investments, and 30 more years. Such company can cope for 100% the foreign citizen. The Right to construction (Hak Guna Bangunan – HGB) is provided to the RMA companies. This right allows to erect buildings on the earth and is valid within 30 years. It can be prolonged for 20 additional years, and then for 30 years. To base RMA the company, you will need the following: a) To approve the detailed business plan. b) To work in a framework макросреды, relying on foreign experts, their experience and more favorable macroeconomic conditions which are available in other countries, thereby helping Indonesia to raise the economic status. c) To bring the corresponding cash deposit in the Indonesian bank. (The sum of the deposit can vary depending on the size of the capital involved in business. ) d) To present an investment in real estate as assets of the company. This process borrows approximately from three to four months, and as soon as it will be complete, the company can give on the work permit for foreign directors (managing directors), thus in the first year of functioning of the company 3 such permissions are given. Costs of arrangement of firm make about 5000 US dollars. 3 . Through seizing on a leasehold basis. Such type of seizing is provided to the qualified foreign experts who are constantly living in Indonesia on a working visa of KITAS. Period of validity of rent makes 25 years and can be prolonged for 25 years. To receive the qualified help at the conclusion of the transaction, especially at currency exchange, it is recommended to use services of the Indonesian lawyer. All transactions connected with the earth, have to consist in that office of the Indonesian notarial management, Pejabat Pembuat Akta Tanah (PPAT) where the bought land is located. While in other countries it would be natural to bring guarantee pledge, here it isn't recommended to be done. In Indonesia there is no the law regulating activity of agencies on real estate; the legislation doesn't oblige these agencies to protect interests of the buyer and to guarantee it receiving the property right. For each copy of the document on the land agreement the stamp duty at a rate of 6000 IDR (0,64 US dollars) is raised. In total you will need two copies. In Indonesia there are registered and unregistered lands. The basic agrarian law of 1960 concerns the certain checked earth registered in local land management. The unregistered earth, Adat land, is public property. It is necessary to buy the certificate of verification of the land certificate. Full process of registration of property consists of seven procedures and about 42 days last. Rent in Indonesia In Indonesia the transactions connected with rent, consist in a free order. The prices of rent are usually declared in US dollars, but payment of rent is carried out in rupees. As a rule, the rent is brought forward for the entire period of action of the rent agreement. However now, in connection with surplus of the offer of objects of residential real estate, tenants can agree about reduction of the size of an advance payment or about monthly payment. Also tenants have the right to record an exchange rate to protect itself from rupee devaluation. Usually after three years the size of a rent is reconsidered, but, as a rule, the cost of rent increases no more than by 20% from rent cost for previous year. On account of possible unpaid receipts or repair work it is required to bring a compensated guarantee contribution in a size approximately equal to monthly cost of rent. The rights of lessors and tenants in Indonesia, especially concerning periods of validity of rent agreements and eviction conditions Periods of validity of rent usually fluctuate from one to three years. These terms depend on how the tenant and the lessor will be able to agree. As a rule, tenants can use the right of extension of term of rent. Because the most part of apartments is given to foreigners, problems with eviction, as a rule, don't arise. Visitors rent housing for that period of time which is required to them in connection with their work, and usually leave the country before the termination of term of the rent agreement. In some special cases concerning rent agreements "diplomatic article" it was possible to terminate the agreement in case of departure of the foreign tenant out of borders of Indonesia is applied. Still there is quite widespread practice when the companies rent apartments for the employees. In such cases sublease of rooms if the lessor has no anything against it is, as a rule, allowed. Support of housing in a good condition and small repair work (which cost usually doesn't exceed 100 US dollars) lay down on shoulders of the tenant. Conditions of standard rent agreements assume that more serious repair work (expenses on which exceed 100 US dollars) have to is carried out by the lessor. Tenants are recommended to agree with the lessor about a withheld contribution, usually in a size equal to a monthly rent, or of 10% from a total cost of rent which it will be able to use in case serious repair work isn't directed on satisfaction of needs of the resident. Other aspects of the agreement, such as notices of departure, are solved according to the arrangement of the parties. Still in mass media there were no mentions of the cases connected with any serious conflicts between lessors and tenants. The legislation In the legislation isn't present any special regulations on lessors and tenants. The general law concerning lands in Indonesia, is the Basic agrarian law (The law No. 5 of 1960). The right of letting (Hak Sewa) isn't subject to registration in National land agency. However in practice some local land managements allow to make record about rent in the relevant official documents concerning the earth, and/or in the certificate on the property right. Real estate of in market -> Next | |
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