Property Terms You Need to Know!

Before we dive into the world of property, whether it is for business, investing, or buying a home for the first time—it is good for us to know some important terms in the world of property. Let us take a look at the following property terms!

 

A

Allotment

The design that is used in an area based on certain functions, for example, housing, industry, trade, offices, and others.

Amortization

Debt reduction works by paying the debt regularly by the same amount. With amortization, debt payments consist of principal and interest payments. 

Anami

This common apartment is in the class between a flat and a commercial apartment or condominium.

Anchor tenant

An anchor tenant is sometimes called draw tenant, key tenant, prime tenant, or lead tenant. Anchor tenants is a well-known business in commercial real estate that rents office space in a building.

Annuity Rest

Calculation of effective interest charging with an annual period. The interest paid is based on the remaining principal from the previous month, the interest decreases according to the loan balance. If the debtor pays more to reduce the principal of the credit, the debtor will automatically get a reduction in the interest expense where the repayment time will end sooner than the tenor (instalment period).

Architect

An expert of design and construction, whose responsibility is to create a design of a building.

B

Backlog

The gap between the number of housing needs and the number of housing availability.

BBN (Bea Balik Nama)

Or Transfer Customs. This fee is required in changing the ownership name of a property.

BP Tapera (Badan Pengelola Tabungan Perumahan Rakyat)

The Public Housing Savings Management Agency is an institution that helps to manage public finances to be able to own their own home.

BPHTB (Bea Perolehan Hak Atas Tanah dan Bangunan)

Tax on Acquisition of Rights to Land and Buildings is a tax imposed on property buyers (land, houses, apartments, shophouses, etc.).

BPN (Badan Pertanahan Nasional)

The National Land Agency has a duty to carry out land registration in order to guarantee legal certainty, one of which is to produce land certificates.

Broker

The third-party or person who bridges the buyer/investor and the seller. Property brokers benefit from the agreed commission results.

Bubble properties

A term used to describe conditions where property prices in an area are increasing due to increased demand and speculation. This price increase is likened to an expanding air bubble.

C

Cashback

A form of offer where the buyer gets a cash refund when purchasing a property from a marketing developer promotion.

Capital Gain

The amount of profit from the sale of the property, compared to the price when purchased.

Cash Flow

Cash flow is the money that is moving (flowing) in and out of a certain period.

Civil Engineering

Work with the task of planning strength and how to save buildings as well as on the management of construction operations.

Cluster

A residential environment where there are several house buildings that have the same concept, shape, and size that are made exclusive. Clusters are usually equipped with one gate system facilities.

Co-broking

Cooperation in the sale of property from two or more property agents.

Collateral

Collateral is submitted by the customer (the debtor) to the bank in order to get credit or financing. These assets will later belong to the bank if the borrower fails to pay the instalments.

Condotel

A hotel-condo is a property project that is built like an apartment to rent like a hotel. Later, investors will not have to bother looking for tenants, because the hotel management will take care of it.

Cost and Fee

A term that refers to the contracting system when building a property. This system is based on profit sharing, where prices can follow or can change as long as the project is not finished.

Coupling

Two houses were built in a row with one design, separated by only one wall and only using one roof. Usually used in middle to lower housing class.

Cut and fill

A process that is done by experts to level the ground. The process itself is to dredge one part of the hilly land, then use the land to fill other parts to make it level.

D

Decision on Appeal

A decision issued by a tax court regarding a dispute experienced by a tax bearer.

Deed of sale & purchase

A Deed of Sale and Purchase is a deed that states that there has been a transfer of ownership rights over an asset and is legally valid due to the sale and purchase activity.

Demand

The number of requests regarding a type of property in a certain period of time.

Developer

Companies or individuals engaged in the property business, where they are developers or builders and marketers of the property itself, both large and small scale housing.

Down Payment

The payment is made at the beginning of the purchase, while the rest will be paid later. Usually associated as a sign of someone’s seriousness in buying or renting a property.

E

Earlybird

Purchasing a property the first time the property is offered and marketed by the developer. Developers usually offer prices that are still cheap below the original selling price. However, buying as early birds means that we as buyers must be patient in waiting for the property to be ready for habitation.

Escrow

A neutral intermediary agency between the seller and the buyer with the task of handing a deposit, signing the Sale and Purchase Binding Agreement until the handover of the Deed of sale & purchase. Escrow duties in Indonesia are carried out by a notary.

F

Fixed Cost and Fee

One of the cooperation systems carried out by contractors and customers, the price system set is based on the initial agreement and does not change, unless the change is made by the property owner.

Fixed interest 

A fixed-rate interest rate has a fixed amount of rate every month until the loan tenor is over. 

Floating rate

Interest rates with different amounts, the determination of this interest rate are based on the Bank of Indonesia.

G

Girik/letter C

Information on proof of control over land but not proof of ownership of land rights from the sub-district or village head. Evidenced by the payment of tax on land.

Groundbreaking

Excavation of the base of the building, as the initial stage of property development. 

GSB (Garis Sempadan Bangunan)

Building Boundary Line, which is the outer boundary line of the property to be erected.

GSJ (Garis Sempadan Jalan)

Road Boundary, the front boundary of the building fence with the road that has been defined in the city plan.

H

Handover (turnkey)

Handover of units from developers to buyers. Also, the process of giving and handing over the property key from the seller to the buyer at a predetermined time.

HGB (Hak Guna Bangunan)

With HGB or Hak Guna Bangunan, you only buy the permits to use state-owned land for a certain period of time.

HGU (Hak Guna Usaha)

Business Use Rights are rights given to a person to carry out livestock, fishery, and plantation activities on state land. HGU can be used for residential construction, business activities can be carried out on the land.

Housing Finance Liquidity Facility

Is a program implemented by the Ministry of Public Works and Public Housing, with this program, Low-Income Communities (MBR) can borrow mortgages at affordable interest rates.

HPL (Hak Pengelolaan Lahan)

Or the right to manage land, namely the right to control and cultivate land or land owned by the state, the right owner can also hand over to a third party to jointly cultivate the land.

I

IMB (Izin Membangun Bangunan)

A building permit is a legal product provided to individuals or legal entities as the basis for implementing property development activities.

Income Tax (Pajak Perolehan penghasilan)

Income Tax, namely tax imposed on tax subjects related to income received in the tax period.

Indent

Purchasing system by ordering in advance, where the buyer must wait until the property purchased is ready for occupancy.

Investors

Property buyers with the motivation to seek profit, and not for a place where they will be living in. Usually, property investors will benefit from property that is rented out or resold. 

IPB (Izin Pengelolaan Bangunan)

Building Use Permit. Namely, a permit given to individuals or legal entities after the property construction is completed in accordance with the IMB and has met the requirements for the function of building equipment.

K

Kanto

The shop office is a building that is made up of more than one floor, this building also has two different functions, one floor as an office and one as a shop.

KDB (Koefisien Dasar Bangunan)

Basic Building Coefficient is the percentage ratio between the total area that can be built from the available area.

KLB (Koefisien Lantai Bangunan)

The Building Floor Coefficient is the percentage ratio between the floor area that can and may be built with the available area. KLB is usually applied to tall buildings because the value can be seen in how many total floors can be made.

KMB (Kelayakan Menggunakan Bangunan)

The Feasibility of Using a Building can also be referred to as a Certificate of Acceptability of Function (SLF), which is a permit granted by the Local Government to a building that has just been built. This permit is given after first checking the condition of the building whether it is really suitable for use.

KPA (Kredit Pemilikan Apartemen)

The consumer credit provided by banks and has a special purpose, namely for the purchase of an apartment.

KPR (Kredit Pemilikan Rumah)

Homeownership loans are loans that are used to buy a house or for other consumptive needs with collateral in the form of a house to be purchased.

KPR (Kredit Pemilikan Rumah) Informal

An Informal KPR is a credit scheme provided by banks for non-formal workers such as entrepreneurs.

L

Lease Rights

Or Hak Sewa is the rights granted from landowners to tenants within a certain period.

Loan

Funds provided by the bank to customers with a certain amount of interest, which must be paid in instalments within a specified time.

Loss transaction

A term commonly used by property investors, this term refers to a miscalculation when buying property, investors do not take into account the costs of BPHTB taxes, pay brokers, notaries and others. 

LTV

Loan to Value. That is the ratio between the credit value to the guarantee at the beginning of the loan distribution.

M

Masterplan

Long-term development plans and frameworks of an existing project in an area.

Mixed-used Development

A state property project that combines several functions at once into one environment such as residential, commercial, and office space.

N

Negotiator

The third stage officer with the task of negotiating with the owner regarding the price and way of handing over and reporting to the investor/buyer concerned.

Nice property

It is a property of good value and is profitable from all points of view such as location, property price growth, and so on. 

NJOP (Nilai Jual Objek Pajak)

Selling Value of Tax Object, which is the lowest price for a property. NJOP is also interpreted as the basic value of tax imposition on PBB (Pajak Bumi dan Bangunan) which is determined by the state.

Notary / Pejabat Pembuat Akta Tanah (Land Deed Making Official)

Public officials who have the authority to make authentic deeds regarding certain legal actions regarding land rights or property rights over flat units to be submitted to BPN (Badan Pertahanan Nasional)

NPWP (Nomor Pokok Wajib Pajak)

Tax ID number. NPWP functions as a person’s identity in terms of tax obligations and rights.

NUP (Nomor Urut Pemesanan)

Order Sequence Number is a serial number given to prospective buyers, to select a house or apartment unit for a newly launched property.

O

Occupancy

The rental rate for units in an apartment, hotel, office, or shop.

Owner

Owner of a property.

P

PBB (Pajak Bumi dan Bangunan)

Land and Building Tax is a State Tax that is imposed on land and/or building a material tax, meaning that the tax payable is determined by the condition of the object. Namely, land and/or buildings.

Prime Lending Rate (Suku Bunga Dasar Kredit or SBDK)

The Prime Lending Rate is the lowest interest rate or the base interest rate used as the basis for calculating a credit. The prime lending rate itself is determined by the Bank of Indonesia.

Property agent

Or a real estate agent is a licensed professional who represents buyers or sellers in real estate transactions. Whether it is for selling or buying a property.

Property boom

A situation where a type of property is experiencing a surge in demand or a condition where there is a high increase in property investment activity. The property boom has also influenced the increase in the price of one type of property that is being sought after.

Public facilities

Is a facility that can be used by the general public that includes roads, public transportation, waterways, bridges, bus stops, public lighting equipment, electricity networks, sidewalks, landfills, and so on.

PPJB (Perjanjian Pengikatan Jual Beli)

A sale and purchase agreement is an initial agreement between the seller and the buyer of a property. PPJB is underhanded and does not involve a notary or PPAT.

PPN (Pajak Pertambahan Nilai)

Value Added Tax is a tax imposed by the government on a sale and purchase transaction and applies to all types of sale and purchase, whether carried out by individuals or entities.

Primary market

New property sold to the first owner. 

Property Crash

A situation where property prices rise sharply or fall rapidly along with the economic situation.

Prosperous

Areas where there may be benefits if property investment is made.

R

RAB (Rencana Anggaran Biaya)

The Cost Budget Plan is a detailed calculation of the costs required for a construction project, including the cost of employee wages and other detailed matters.

Ready Stock

Property projects (houses, apartments, shop houses, etc.) that are sold are already built and ready for use.

Recession

The condition when the purchasing power of property objects decreases.

Refinancing (Refinancing)

Steps that are taken by someone to rearrange, change, or replace the existing mortgage financing structure with a recalculation system for the property that has been purchased. This is done in order to obtain a smaller interest rate or instalment amount, as well as a longer period.

Rukan

Home-office is a building that is made up of more than one floor, at the bottom of this building usually functions as an office.

Ruko

A shophouse is a building that is usually made of more than one floor or story, at the bottom, it is usually used for business and the top is used as a residence.

Rusunami

Owned Simple Flats. Often referred to as ‘Subsidized Apartments’.

Rusunawa

Simple Rental Flats.

S

Social Facilities

Facilities made by the government or private parties to be used by the general public in a residential area. For example, health centres, clinics, schools, places of worship, markets, recreation areas, playgrounds, sports venues, multipurpose rooms, graveyards, etc.

Scout

Property location observer officers are tasked with finding land/property, collecting data in the field, and reporting the results to the surveyor.

Secondary Market

Property that was once used is then resold.

Service charge

Additional costs that must be incurred by owners or tenants of a property every month (usually charged to owners or tenants of apartments, offices, and other commercial properties) for services provided by the manager. Service charges are usually calculated per square meter, based on the units owned.

SHGB (Sertifikat Hak Guna Bangunan)

Building Use Rights Certificate is the authority to cultivate the land, but the land does not belong to the owner of the building erected on it. The land is given by the government or a party to be used for up to 30 years and can be extended back up to a maximum of 20 years.

SHM (Sertifikat Hak Milik)

Ownership Certificate is proof of legal ownership of a property or is a statement of legality regarding someone’s ownership of one property including house, land, or shophouse.  Ownership certificate is also widely recognized by the public as the highest legality of ownership. Because with the ownership certificate, it means there will be no more interference from other people other than those whose names are written in the letter.

Sinking fund

Commonly referred to as maintenance costs are costs incurred by tenants of property (apartment, office, or other commercial property) and paid to the manager. The funds are issued by the owner or tenant of the property for the maintenance of damaged public facilities, for example, if one time the elevator is damaged or the water installation needs repair.

SIPPT (Surat Izin Penunjukan Penggunaan Tanah)

Land Use Appointment Permit. Is a permit from the governor to use the land for buildings with land area ownership of 5,000 m2 or more.

Site plan

A drawing or plan map (usually in a two-dimensional form) contains the development plan on a plot of land, building, or area. This drawing is made in great detail complete with main roads, sewers, electricity, public facilities, and social facilities.

SIUP (Surat Izin Usaha Perdagangan)

Trading Business License is a letter given by local officials to entrepreneurs to carry out a business.

SKK (Surat Keputusan Keberatan)

The decision on Objection letter, namely the decision letter on an objection to the Assessment Letter for Acquisition of Rights on Land and Building Underpaid, Notice of Fee for Acquisition of Rights on Land and Building for Additional Underpaid, Decision on Acquisition Fee for Land and Building Overpayment, or Assessment of Customs Acquisition of Zero Land and Building Rights submitted by the Taxpayer.

SKP (Surat Keputusan Pembetulan)

Correction Decree, namely a decision letter to correct typographical errors, calculations, and/or errors in the application of the taxation tax provisions contained in the Assignment of Fees for the Acquisition of Rights on Land and Building Underpaid, Decree on Acquisition of Rights on Land and Building Underpaid Additional, Decree Fees for Acquisition of Rights on Land and Buildings are overpayment, a Letter of Tax on Acquisition of Rights on Land and Buildings is Zero or Claims for Acquisition of Rights on Land and Buildings.

SMF

Secondary Mortgage Facility, which is an institution that provides loans to banks providing mortgages with the mortgage guarantee itself. This system aims to overcome the lack of funds in the framework of housing loans for the community, which are channelled through the KPR granting bank.

SMM

Secondary Mortgage Market or secondary housing financing is a company created to buy a homeownership credit (KPR) from a creditor bank, which is then packaged in debt securities which are then sold to investors such as insurance companies or individual investors.

SOHO

Small Office Home Office, which is a type of property that combines residential functions with a business/office area to support residents’ business/business activities. In contrast to shophouses, SOHOs are built in an environment not far from urban business centres.

Speculators

An act of buying property for profit without carefully considering the risks that will be faced.

SPOP (Surat Pemberitahuan Objek Pajak)

Tax Object Return. Namely, a means for taxpayers to register tax objects that will be used as the basis for calculating the land and building tax (PBB) owed.

SPPT (Surat Pemberitahuan Pajak Terutang)

Tax Returns Payable. Namely the decree of the head of the KPP regarding the payable tax that must be paid in one tax year.

Strata title

Ownership rights to apartment units or apartments which are also joint ownership of a building complex and consist of exclusive rights to private space as well as shared rights in public spaces (eg gardens, swimming pools, etc.).

Sunrise property

A term used to describe property located in an area that has the potential to develop in the next five years. This bright potential is indicated by a growth rate above the average increase in land or infrastructure development in the area.

Sunset property

A term used to describe a property that has a less profitable investment value. This is indicated by the small population and undeveloped land prices.

Superblock

An independent city area that combines residential areas, office areas, trade areas, recreation areas, and others.

Supply

Availability of the number of pieces of property available to meet requests or demands from customers. It can also be an activity to meet the number of property needs that are targeted by customers.

Surveyor

A second stage officer in charge of directly reviewing the location of the property, confirming the data received from the Scout, meeting with the owner, and checking the validity of the certificate at the Notary/BPT/District/Local Government.

T

TDP (Tanda Daftar Perusahaan)

Company Registration Certificate, which is given by the government to companies whose registration has been validated.

Tenor

The agreed duration or period for making loan repayments or credit instalments. For example five years, ten years, and so on.

Top-up

Increase the credit limit on the loan.

Toppings off

Mounting the roof of the building as a symbol of the end of the construction process.

Turn Over

Projected payback time for an investment.

U

Urban

Areas that function as urban settlements, government, social, and business services.

Y

Yield

The profit is calculated from the property’s rental value per year compared to the property price. The yield range per year differs from each type of property.

 

 

Now that we have understood the terms that are often used in property—Head on to our article about all of the important documents you need in homeownership!