Indonesia Expat

Tax Amnesty is Spurring Locals to Shop for Overseas Property

Helix House

Big players in the local property sector agree that tax amnesty is actually attracting overseas property developers to target the Indonesian market. Indonesia’s property sector is still considered unstable for the time being, some experts say. Helix Home America LLC is one of them. It is also a foreign property developer sizing up potential buyers in the archipelago.

The short and simple version of the story is that Indonesia’s tax amnesty policy makes it easier for locals to own – and report ownership of – various kinds of assets without being penalized or skinned alive financially. This includes overseas property.

Helix Home America is a company that sells landed houses in Chicago, Indianapolis and Detroit. Now, the business is targeting Indonesian buyers, aiming to hit 30 property sales per month from Indonesians.

Helix Homes America’s Chief Marketing Officer (CMO) for Asia Pacific Hans Herwin explained that the prices of the houses will vary, ranging from US$65,000 to US$150,000 per unit with 9.25 percent of yields per year.

“If you want to converse it, with the average of Rp.600 million (US$45,000) to Rp.800 million (US$60,000), consumers can have a house there with land areas of around 300 square metres,” said the CMO, as quoted by Bisnis Indonesia.

He added that Helix is not only selling homes at more affordable prices than those offered by other foreign developers, but it is also allowing Indonesians to buy property for the purpose of investment in America. As such, it’s cooperating with a number of guaranteed insurance companies.

He believes that this will be a good alternative for investors, as there is still no other local developer that can offer the same service of providing direct insurance from the insurance companies. Apart from that, Helix also provides other services such as protection of assets and net worth, minimization of US tax, amnesty for annual tax and submissions, revaluation of property tax and the opening of bank accounts in the US.

According to Liputan 6, CEO of Helix Joe Nelson also said he’s optimistic that there will be Indonesian investors who are interested in putting their money into US property. He did suggest a few reasons why locals might be interested:

“Indonesia’s tax regulations also give sufficient room for its people to seek global investment opportunities, creating more chances for foreign developers to promote their business to Indonesian nationals.”

Other than Helix, one foreign property developer that also seems interested in promoting its business in Indonesia is Australia’s Crown Group. This company built a representative office in Jakarta. Crown targets to pull in Rp.450 billion (US$33,774,930) from Indonesian buyers for a “waterfall” project in Sydney.

There is also Malaysian developer M101 Holdings Sdn. Bhd. which targets more than US$22 million in sales from Indonesians for its third project called “M101 Skywheel” in Kuala Lumpur.

Addressing the trend, Executive Director of the Indonesian Property Study Center Panangian Simanungkalit said the rise of foreign property developers pitching to rich Indonesians is normal. But then again, out of all the wealthy investors of Indonesia, only five percent are accustomed to buying foreign products.

He added, “This is mainly because they [Indonesian investors] have business relationships. For instance, they have a branch office in the US. Other than that, it’s more likely due to the psychological factors. Perhaps they used to live there or they plan to send their kids there for school.”

See: Indonesia Just Made It Easier To Invest In Property, No More Double Taxation On REIT Trading

Image credits: Investor Daily

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