Can Foreigners Own Property in Indonesia? – Property is a term that describes everything that a person or business legally owns, which gives the owner certain enforceable rights over these items. Purchasing property aims to get a Return of Investment (ROI) either through rental, resale or a combination of these two factors.
The property can be owned by individuals or investors in the form of a group or a corporation.
Property has a very broad meaning in its true sense. This includes not only money (material) and other things of value that are tangible, but also includes intangible rights that are considered a source or element of income or wealth.
Basically Properties are divided into 2 types. Tangible and intangible property.
Below are examples of tangible and intangible properties :
Tangible property refers to any type of property that is generally movable (i.e., not attached to real property or land), to be touched or felt. This generally includes items such as furniture, clothing, jewelry, art, writing, or household items.
Intangible property refers to property that cannot actually be moved, touched or felt, but instead represents something of value in the form of Shares, Trademarks, securities, etc.
Before further discussion of the explanation above and based on the title listed, can foreigners own property in Indonesia?
Government policy regarding foreigners being able to buy houses and / or apartments in Indonesia is not new. This policy has existed since 2015.
In the Republic of Indonesia Government Regulation No. 103 of 2015 concerning Ownership of Residential or Residential Homes by Foreigners Domiciled in Indonesia, it is stated that “Foreigners who are domiciled in Indonesia and not Indonesian citizens whose existence provide benefits, do business, work, or invest in Indonesia” are permitted to own property in Indonesia.
This is further strengthened by the existence of the Omnibus Law or the Job Creation Law where it is increasingly clear that foreigners are allowed to invest in property in Indonesia.
In the UU Cipta Kerja, foreigners are allowed to own housing or apartment space. However, the Omnibus Law on Cipta Kerja does not change the substance of the Basic Agrarian Law, where foreigners can have Building Use Rights. UU Cipta Kerja regulates that foreigners can buy apartments, but they will not get joint land rights, but only use rights.
Property Criteria That Foreigners Can Buy in Indonesia?
Based on Article 5 of Government Regulation No.103 of 2015, Foreign Citizens (WNA) are only allowed to own property with a certificate of use rights not ownership rights.
In the next Article, namely Article 6 PP No.103 of 2015, it is explained that the certificate is valid for 30 years, then it is extended back to 20 years and will be renewed again for 30 years.
So, the length of time that a foreign nationals (WNA) can stay on the property purchased is 80 years. Even then, only use rights, not property rights. Because what is owned is only the right to use, automatically when the right has finished it will return to the owner of the property.
Regulatory Terms and Limitations Related to Foreigners Buying Property in Indonesia?
The rules regarding foreigners buying property in Indonesia can be seen in the five articles of Government Regulation Number 18 of 2021.
Article 70 regulates that Indonesian citizens (WNI) who are married to foreigners can also have land rights.
Article 71 explains that foreigners buying property in Indonesia can own a landed house with the status of use rights or use rights over ownership or management rights.
As for apartments that can be owned, the property is built on use rights or rights to build on state land, land management rights, or property rights.
The apartment is located in a special economic area, free trade and free port areas, industrial areas and other economic areas.
Article 71 also regulates foreigners buying property in Indonesia with a minimum limit on price, land area, number of parcels, and allotment.
Article 73 itself states that the rules in article 69 to article 72 will be regulated in a ministerial regulation.
What are The Requirements for a Foreigner to Buy Property in Indonesia?
1. Have a Kitas (Limited Stay Permit Card)
2. Can Only Buy Single Houses or Flats
3. Property prices range in billions
Even though they have a lot of money, foreigners buy property in Indonesia also not just property. But has been limited in price. Based on the standardization from the Indonesian government, foreign citizens (WNA) who want to buy property must comply with the set limits. Property price limits also adjust to the area to live in.
For example, for the DKI Jakarta area, the minimum price for a residential property is around 10 billion and 5 billion for an apartment property. In other areas, call it Bali, the minimum price for a house to be purchased is 3 billion and an apartment is 2 billion.
Here’s a list of the minimum property prices foreigners can buy for a single home:
- DKI Jakarta 10 billion
- Banten 5 billion
- West Java 5 billion
- Central Java 3 billion
- Yogyakarta 3 billion
- East Java 5 billion
- Bali 3 billion
- NTB 2 billion
- North Sumatra 2 billion
- East Kalimantan 2 billion
- South Sulawesi 2 billion
- Other areas 1 billion
For Apartment Units:
- DKI Jakarta 5 billion
- Banten 1 billion
- West Java 1 billion
- Central Java 1 billion
- Yogyakarta 1 billion
- East Java 1.5 billion
- Bali 2 billion
- NTB 1 billion
- North Sumatra 1 billion
- East Kalimantan 1 billion
- South Sulawesi 1 billion
- Other area 750 Million
4. Married an Indonesian
5. Property Purchased Not Second Hand
To get permission to buy property, foreign citizens (foreigners) are required to buy property directly from the developer or the owner of the land. Second party purchases cannot be made.
This is in accordance with the provisions in Article 2 of the Minister of Agrarian Affairs 13/2016:
Purchase of a single house or apartment unit as referred to in Article 1 paragraph (2), provided that it is a new purchase / new unit in the form of a new building purchased directly from the developer / land owner and is not a second hand purchase.
Purchase of a single house or apartment unit as referred to in paragraph (1), is a single house or apartment unit with a minimum price as stated in the Appendix which is an integral part of Ministerial Regulation.
Seeing the terms and conditions of foreigners buying property in Indonesia above, foreigners do have the opportunity to own property but not fully own it.