How can you own your bungalow under Indonesian Law
First it is impossible for a foreigner to own land in Indonesia. There is a chance that in the future this will change. The government has taken a more and more flexible point of view on this matter. In the mean time you will have to use a contract that is strong enough to give you the legal protection you need for your property. The advantage of this contract is that you don't have to pay the 5% handling tax. Another advantage of this contract is the simple adjustments needed in the contract when you want to buy a bungalow with other persons.
In Indonesia the land has to be registered in the name of an Indonesia citizen. In this case it will be Mr. I Putu Angga Yasa with whom we have already done business with for several years, and he has long proven to be 100% trust worthy. But this doesn't mean anything to you, we understand that. We offer you a legal construction that will give you the best legal protection.
The contract is made out of 4 parts that contain the agreements for cooperation. According to Indonesian law there has to be a balance between the two parties. I Putu Angga Yasa will give you his services and for that you will honour him in payments. You will pay him Rp. 150.000,-a month for his legal protection of your property, calculated based on a rate of Rp. 15.000,- or approximately 10,00 Euro. In this way you have created the balance according to the Indonesian law.
Contracts
The 4 parts of the contracts contain the following :
Contract 1 Describes that the Western will supply the money to the Indonesian citizen in order to buy the land and the house on the land. The Indonesian citizen will give out of free will the land and house to the Western citizen so he can use the house as his home. The Indonesian citizen is owner and so he has his part of the responsibility for the care of the property. All post that is connected with the land and house will come through him to you, as will the bills for electricity and water supply directed to him. For this he will receive payments as described above. On top of that he will also receive 5% of the extra profit made on top of the marketprice, when you decide to sell your property. Further on it says that the Indonesian citizen has given you his permission for selling, renting, and possibly making changes to the bungalow, the arrangements in the contract that have to be made in case of your property being inherited and that the cost for water, electric, and property taxes (about? 20 Euro a year) will be the responsibility of the Western citizen.
Click here to see contract 1
Contract 2 This part describes in detail the arrangement when you want to sell your property and that the Indonesian counterpart fully give his/her permission to sell the property.
Click here to see contract 2
Contract 3 Here it says clearly that the Western citizen may lease or rent out the property.
Click here to see contract 3
Contract 4 This part describes when it is possible for the Western citizen to become owner of a property that the Indonesian counterpart will have to abide by his duty to help you / cooperate with you to make that happen. Also in case there is a change in the law that would effect you in a negative way, the contract of agreements with your Indonesian counterpart will be changed into a lease contract for a long period of 50 years with the right and option to prolong/ extend it. If you at any time decide to stop your contract with I Putu Angga Yasa, and cooperate with another counterpart, this can be done. Under these conditions it is your duty to pay his losses, namely his monthly payments for the period of 25 years at once that in 25 x 12,50 x 12 = 3.750,- Calculated based on a rate of the Euro of Rp. 14.000. You also will protect yourself in this way to the chance of more costs, relating to the percentage of extra profit made by selling the property as these can not be higher than the price you pay when stopping the contract!
Click here to see contract 4
