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

IKNPOS.ID - Foreigners buying property in Indonesia can be an attractive investment opportunity. However, property ownership rules for Foreigners buying property in Indonesia are quite strict and governed by various government regulations. This article will discuss in detail the rules, requirements, and steps that must be followed by foreign nationals who want to buy a house in Indonesia. Legal Basis for Property Ownership by Foreigners Property ownership by foreign nationals in Indonesia is regulated by several regulations, including: Government Regulation (PP) No. 103 of 2015 Regulates the ownership of residential houses by foreign nationals domiciled in Indonesia. Foreign nationals must have a Limited Stay Permit Card (KITAS) as a main requirement. PP No. 18 of 2021 Regulates management rights, land rights, and condominium units. Explains the types of properties that foreign nationals are allowed to own. Regulation of the Minister of Agrarian Affairs No. 18 of 2021 Regulates the procedures for determining management rights and land rights. Explains the criteria for properties that foreign nationals are allowed to buy. Criteria that Foreigners Buying Property in Indonesia Foreign nationals cannot buy all types of properties in Indonesia. Here are the permitted property criteria: Landed House Must be built on land with Right of Use (Hak Pakai) or Building Use Right (Hak Guna Bangunan/HGB). Maximum land area of 2,000 square meters. May only be owned by one person or one family. Condominium (Apartment) Must be built on land with Right of Use or HGB. Only apartments with a commercial category may be owned by foreign nationals. Terms and Regulations for Foreigners Buying Property Have a KITAS KITAS is an absolute requirement for foreign nationals who want to buy property in Indonesia. KITAS must be renewed every 2 years. Right of Use Time Limit The right to use property by foreign nationals is valid for a maximum of 80 years (30 years + 20 years extension + 30 years renewal). Property Price Limit The price of property that foreign nationals are allowed to buy varies depending on the location. These regulations are stated in the Ministerial Decree No. 1241/SK-HK/IX/2022 concerning Acquisition and Prices of Residential Houses/Residences for Foreigners, namely: Landed House Price Limits DKI Jakarta: IDR 10 billion Banten: IDR 5 billion West Java: IDR 5 billion Central Java: IDR 3 billion Special Region of Yogyakarta: IDR 5 billion East Java: IDR 5 billion Bali: IDR 5 billion NTB: IDR 3 billion North Sumatra: IDR 3 billion East Kalimantan: IDR 2 billion South Sulawesi: IDR 2 billion Other regions or provinces: IDR 1 billion Condominium Price Limits DKI Jakarta: IDR 3 billion Banten: IDR 2 billion West Java: IDR 1 billion Special Region of Yogyakarta: IDR 1 billion East Java: IDR 1.5 billion Bali: IDR 2 billion NTB: IDR 1 billion North Sumatra: IDR 1 billion East Kalimantan: IDR 1 billion South Sulawesi: IDR 1 billion Other regions or provinces: IDR 750 million (Price limits are subject to change at any time) [caption id="attachment_24452" align="alignnone" width="1200"] How Foreigners Can Buy Property in Indonesia[/caption] 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. Make sure to always follow the latest regulatory developments so that the purchase process runs smoothly. With this article, foreign nationals can understand the steps needed to buy property in Indonesia legally and efficiently. [caption id="attachment_24453" align="alignnone" width="1200"] How Foreigners Can Buy Property in Indonesia[/caption]

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