How Foreigners Can Buy Property in Indonesia: Rules and Step-by-Step Guide

Foreigners buying property in Indonesia with legal documents and property certificates — How Foreigners Can Buy Property in Indonesia

Property Purchase Procedure by Foreign Nationals

Choose the Appropriate Property

Make sure the property meets the criteria allowed for foreign nationals.

Consult with Legal Experts

Consult with a lawyer or notary experienced in foreign national property transactions.

Prepare Documents

The required documents include:

KITAS.
Original passport and photocopy.
NPWP (if any).
Statement letter stating that you do not own other properties in Indonesia.

Transaction Process

Negotiate the price with the seller.
Sign the sale and purchase agreement in front of the Land Deed Official (PPAT).

Benefits of Buying Property in Indonesia for Foreign Nationals

Long-Term Investment

Property in Indonesia has significant potential for value appreciation.

Comfortable Place to Live

Owning your own home provides comfort and security.

Business Opportunities

Properties can be rented out or developed for commercial purposes.

Tips for Foreigners Buying Property in Indonesia

Understand Local Regulations

Some areas have additional rules regarding property ownership by foreign nationals.

Use Professional Services

Use the services of a lawyer or property consultant to ensure the transaction complies with the law.

Pay Attention to Taxes and Other Costs

Understand tax obligations such as Income Tax (PPh), Land and Building Transfer Fee (BPHTB), and notary fees.

Additional Costs for Foreigners buying property in Indonesia

To calculate the total cost of buying property in Indonesia as a foreign national, consider these factors:

Property Price

Ensure the property aligns with the price limits set for foreign buyers, which vary by region and property type (house or apartment). For example, in DKI Jakarta, the minimum price for a house is IDR 10 billion, and for an apartment, it is IDR 3 billion.

Taxes

Value Added Tax (VAT): Generally, 12% of the property value.
Luxury Goods Sales Tax (if applicable): This applies to very high-end properties.
Buyer’s Stamp Duty (BPHTB): Usually around 5% of the property value after a certain deduction.
Income Tax (PPh): This is typically the seller’s responsibility, but it’s good to be aware of it.

Legal and Notary Fees

These cover the cost of the land deed official (PPAT), legal advice, and document preparation. These fees can vary but budget for around 1% to 2.5% of the property value.

KITAS (Limited Stay Permit Card)

This is a mandatory requirement for foreign nationals. The cost of obtaining and renewing a KITAS should be factored in.

Renewal of Right to Use (Hak Pakai) Title

The “Hak Pakai” title is granted for a specific period (e.g., 30 years, with extensions possible up to 80 years). Factor in the costs associated with extending or renewing this right.

Maintenance and Management Fees

If buying an apartment, there may be ongoing maintenance and management fees.

Buying property in Indonesia as a foreign national requires a deep understanding of the applicable rules and procedures. By following this guide, foreign nationals can buy a house or apartment in Indonesia legally and safely.