“ Indonesia itself has continued to grow and develop; becoming more international-oriented in the way local companies are managed. ”
One particular issue that significantly affects the sector is the tax levy of 20% on selling property valued above 10 billion IDR. This would undermine people’s interest in buying property. Moreover, there is also the regulation dictating a 5% withholding tax in buying a property valued above 5 billion IDR. Meanwhile, an ongoing debate pertains to foreign ownership of property. If the government does not carry out a radical change, property in Indonesia will remain unattractive to foreigners. The industry itself must face a number of constraints based on the current law. For example, a foreigner is only allowed to hold a Right to Use title while Indonesians generally prefer to buy property under a Building Rights on Land title, thus causing a dilemma for property developers.