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Bali News

Taking Out the Wash

New Rules Requiring Reporting of Property and Luxury Good Transactions in Excess of US$55,500 Dollars May Complicate Life for Foreign Property Purchasers in Bali


Bali News: Taking Out the Wash
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(2/12/2012)

Commencing in March 2012 new regulations come into force, which could have far reaching effects on Bali’s real estate and property sectors.

As reported by NusaBali, all property agents and developers will be soon be required to report every transaction in excess of Rp. 500 million (US$55,500) to the PPATK (Indonesian Financial Transaction Reports and Analysis Center/INTRAC).

INTRAC is an independent agency of the government – answerable directly to the President, established to detect and prevent criminal money-laundering transactions.

“On March 20, 2012 property agents and developers must report (transactions) to the PPTAK,” explained the vice-chairman of PPTAK, Agus Santoso.

According to Santoso, the regulation is based on Section 17 of Law Number 8 of 2010 on the Prevention and Elimination of Criminal Money Laundering. Under the rule, the party obliged to report the transaction is not the purchaser of a property, but the developer or the property agent.

“The obligation to report is contained in Section 27 of the Law that requires property transactions in excess of Rp. 500 million; whether paid in cash, non-cash means or paid for in installments,” explained Santoso who former job was as the Deputy-Director of Law at Bank Indonesia. The specific technical requirements of the regulation are set forth in PPATK Rule No. 12 of 2011.

Agus said the enforcement of the new rule is needed to monitor the purchase of land and luxury transactions that are often used to shield funds obtained through criminal activities.

Implicit in the new rule is the assumption that the government will soon require “reverse proof” from purchasers of property and luxury items that demonstrate the legally-earned financial wherewithal to make such purchases.

In Bali, these new rules may complicate the widespread use extra-legal practice of placing a business or a property in the name of a 3rd party, while also putting in place legal instruments  that allow the purchased item to be under the control by the foreign owner who financed the purchase.


© Bali Discovery Tours. Articles may be quoted and reproduced if attributed to http://www.balidiscovery.com.


 
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