Owning a house in Indonesia is no longer just a dream for foreigners. The Indonesian government has opened great opportunities for foreigners who intend to acquire residential properties in the country, whether for personal residence or long-term investment purposes. However, it is important to note that property ownership by foreigners in Indonesia is subject to strict and complex legal regulations. Therefore, it is important for foreigners to thoroughly understand the applicable legal provisions before proceeding with any property purchase transaction.
Here are several key regulations governing property ownership by foreigners in Indonesia:
Government Regulation (PP) No. 103 of 2015 on Ownership of Residential Houses or Dwellings by Foreigners Residing in Indonesia
Government Regulation (PP) No. 18 of 2021 concerning Management Rights, Land Rights, Condominium Units, and Land Registration
Ministerial Regulation (Permen) of the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN) No. 18 of 2021 regarding Procedures for Determining Management Rights and Land Rights
These regulations outline in detail the procedures, requirements, and limitations for foreign ownership of houses or apartments in Indonesia. One of the key provisions is stated in Article 2, Paragraph (2) of PP No. 103 of 2015, "Foreigners who may own a house or dwelling in Indonesia are those who hold a residence permit in accordance with statutory regulations."
This indicates that possessing a Limited Stay Permit Card (KITAS) or a Permanent Stay Permit Card (KITAP) is a fundamental requirement for foreigners wishing to own property in Indonesia.
In addition to having a valid residence permit, foreigners must also comply with property eligibility requirements as outlined in Article 185 of Ministerial Regulation ATR/BPN No. 18 of 2021, as follows:
For landed houses, the property must be located on:
Land under Right to Use (Hak Pakai) on state land;
Land under Right to Use on:
Freehold land (Hak Milik) through a notarial agreement (PPAT deed);
Management Rights (Hak Pengelolaan) through a land utilization agreement with the rights holder.
For condominium units (apartments), the building must be constructed on:
Right to Use or Right to Build (HGB) on state land;
Right to Use or HGB on Management Rights land;
Right to Use or HGB on Freehold land.
Further, Article 186 of Permen No. 18 of 2021 specifies the types of property that foreigners may own, including:
Landed houses categorized as luxury homes according to prevailing regulations;
Only one plot of land per individual or family;
A maximum land size of 2,000 square meters.
As for condominium units, foreigners are allowed to own commercial units only, not those categorized as subsidized or state-owned housing.
There are also specific ownership time limits for foreigners, as outlined in Article 6, Paragraphs (1) to (3) of PP No. 103 of 2015, which state:
The Right to Use is granted for an initial period of 30 years;
It can be extended for an additional 20 years;
After that, it may be renewed for another 30 years.
In total, foreign nationals may enjoy property rights in Indonesia for up to 80 years, provided they continue to meet the residence permit requirements (KITAS/KITAP).
Another crucial requirement is the minimum property value threshold, as set by the Ministry of ATR/BPN, which stipulates:
Jakarta: Minimum price for a landed house or apartment is IDR 3 billion;
Bali and Bandung: Minimum price ranges from IDR 2 billion to IDR 2.5 billion;
Other regions (e.g., East Java or Sumatra): Lower minimums may apply, but generally above IDR 1 billion.
The property purchase procedure for foreigners is generally similar to that for Indonesian citizens but involves additional checks, especially concerning the legality of the residence permit and land rights. Below is a general overview of the property purchase process for foreigners:
Select a property that meets legal requirements (with Right to Use/HGB and above the minimum price).
Draft a Sale and Purchase Agreement (PPJB) before a licensed notary (PPAT).
Settle applicable taxes and fees (e.g., BPHTB).
Obtain a certificate of Right to Use/HGB in the foreign buyer’s name.
Register the property at the local land office (BPN).
It is important to note that this entire process must be supervised by a licensed notary, and ideally facilitated by a reputable and experienced property agent to ensure compliance with all legal regulations.
With over 20 years of experience in the Indonesian real estate market, Ray White Indonesia is ready to assist you in realizing your dream of owning property in Indonesia. We ensure that every transaction is conducted legally, efficiently, and securely.
Contact Ray White Indonesia today and find your dream property through a smooth and reliable process.