Indonesian apartment, housing situation

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Important Point in Contract

Precautions for Contract

The form of the contract is

  1. Buy or rent.
  2. Whether the other party of the contract is an individual or a corporation.
  3. In the case of rent, direct or sublease.
  4. There are four categories: short-term and long-term. In any case, listen carefully to the advice of a real estate professional before making a contract and be careful not to get into trouble later.

  • Contract

    Generally, properties rented to foreigners have standard contracts in English and Indonesian. However, when contracting with an individual owner, it is important to thoroughly check the contents of the contract. In any case, make sure you understand the contract before signing it. In Indonesia, the contract period for rental housing is generally one year. We may also sign a two- to three-year contract to reduce rent. However, in the future, there may be situations in which you have to cancel the contract unexpectedly due to a sudden return order. Please note that no refund will be given if you cancel the contract in the middle of the contract period. In that case, it is often the case that the successor will take over or sublease, but it is advisable to confirm in advance whether sublease is possible according to the contract terms.

  • Method of Payment

    In Indonesia, rental housing is usually prepaid in a lump sum for the rent and management fee for the contract period. The payment currency was still generally US $, but from June 2015, rupiah payment became the mainstream. Payment studies vary depending on the contract period and the presence or absence of taxes (PPN, PPH).

  • Property Confirmation

    It is important to thoroughly check the condition of the property before making a contract. The state is not just the appearance, but the water supply and the electrical system are important points. You should carefully check the water quality (if the piping is old, rust will appear and the water will be muddy), water leakage, water pressure, capacity of the water heater, air conditioner operating status (noise of the outdoor unit), etc. price. The surrounding facilities and management status are also important checkpoints. For example, the surrounding environment often differs (traffic congestion, noise, etc.) between daytime and evening. Check in advance so that you won't regret it once you start living. For furnished properties, it is important to always check the equipment list with the actual item. It is also a good idea to take a picture with a digital camera before moving in. In the case of subleasing, it is also necessary to confirm the original contract and the remaining period.

  • Tax Confirmation

    VAT (value added tax) of 10% will be added to rental contracts for lease-only apartments and serviced apartments. This may be included in the rent, but it may be added separately, so be careful when making a contract. In addition, in the case of a contract to rent an owner (individual) property in the name of a company (corporation), the borrower is usually obliged to bear the tax (PPH = income tax). The owner receives the withholding rent. In this case, the owner needs to notify the borrower of the NPWP (Personal Tax Number). In rare cases, the rent is collected including tax, the tax is paid by the owner, and the tax payment certificate is sent to the borrower. In any case, be sure to check when making a contract.

PT. CASATELLA ASIAPRIMA