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Opening Up: Foreigners Can Now Own Property in Indonesia with Just a Passport
In many countries, owning property as a foreigner can be a bit of a bureaucratic challenge, but Indonesia seems to be changing the game.

Opening Up: Foreigners Can Now Own Property in Indonesia with Just a Passport

November 2023

Have you ever thought about owning a place in Indonesia? It's such a beautiful country, and now that it's easier for foreigners to own property, we might see some interesting shifts in the real estate landscape. That's a game-changer!

In many countries, owning property as a foreigner can be a bit of a bureaucratic challenge, but Indonesia seems to be changing the game. Recent developments suggest that foreigners can now own property in Indonesia without the need for a complicated process—just a passport might be enough. It's a move that could potentially attract more foreign investors and individuals looking to own a slice of Indonesian real estate. This has positive implications for the property market and the overall appeal of Indonesia as a destination for international property ownership.


Here are the step-by-step terms and conditions you must know before owning property in Indonesia with only a passport.

While we don't have real-time information, the general process for foreigners owning property in Indonesia typically involves the following steps. Keep in mind that these might be subject to change, and it's always wise to consult legal experts such as Moores Rowland for the most accurate and up-to-date information:

  • Check Eligibility: Ensure that you meet any eligibility criteria set by the Indonesian government for foreign property ownership.
     
  • Choose the Right Property: Select the property you want to buy. There may be restrictions on the type of property foreigners can own, so it's crucial to be aware of these limitations.
     
  • Engage a Notary: Indonesian property transactions usually involve a notary. Engage a qualified notary to handle the legal aspects of the property transfer.
     
  • Draft and Sign Agreement: Work with the notary to draft a sale and purchase agreement. Once both parties agree, sign the agreement.
     
  • Pay Taxes and Fees: Fulfill any tax obligations and pay the required fees associated with the property transfer. This may include acquisition tax and other government-imposed levies.
     
  • Approval from Land Agency: Seek approval from the National Land Agency (Badan Pertanahan Nasional or BPN). They will validate the transfer and update the land registry.
     
  • Receive the 'Hak Pakai' Certificate: As a foreigner, you may receive a "Right to Use" certificate (Hak Pakai). This grants you the right to use the land but doesn't imply ownership in the conventional sense.
     
  • Stay Informed: Indonesia’s property laws and regulations often change, so it's crucial to stay informed about any updates or amendments that might affect foreign property ownership.

Remember, these steps are a general guide, and the specific requirements can vary based on factors such as the type of property, location, and current legal provisions. Always consult with legal professionals who specialize in Indonesian real estate to ensure a smooth and lawful acquisition process.
 

The minimum prices for landed houses that foreigners can buy are as follows:

  • DKI Jakarta: Rp5 billion
  • Banten: Rp5 billion
  • West Java: Rp5 billion
  • Central Java: Rp5 billion
  • East Java: Rp5 billion
  • Special Region of Yogyakarta: Rp5 billion
  • Bali: Rp5 billion
  • West Nusa Tenggara: Rp3 billion
  • North Sumatra: Rp2 billion
  • East Kalimantan: Rp2 billion
  • South Sulawesi: Rp2 billion
  • Riau Archipelago: Rp2 billion
  • Other regions or provinces: Rp1 billion

Moreover, the minimum prices for flats that can be purchased by foreigners are as follows:

  • DKI Jakarta: Rp3 billion
  • Banten: Rp2 billion
  • West Java: Rp2 billion
  • Central Java: Rp2 billion
  • East Java: Rp2 billion
  • Bali: Rp2 billion
  • Special Region of Yogyakarta: Rp2 billion
  • Other regions or provinces: Rp1 billion

Aside from pricing, there is a maximum measurement of land. Residential ownership for foreigners is limited to a maximum of 2,000 m2.
Source: https://indonesiaexpat.id/  
 

Taxes apply to property ownership only with a passport in Indonesia.

Ministerial Regulation (Permen) ATR/BPN Number 18 of 2021 concerning Procedures for Implementing Management Rights and Land Rights regulates, among other things, the policies surrounding foreign nationals' ownership of residential real estate. The employment creation provisions of Law (UU) Number 11 of 2020's Article 142 and Article 182 letter b are derived in ATR/BPN Ministerial Regulation No. 18/2021.


Other regulations that have been issued are Ministerial Decree ATR/KBPN No.1241/SK-HK.02/IX/2022 Year 2022 Acquisition and Prices for Foreigners’ Residential/Dwelling Houses.

When it comes to property ownership in Indonesia, taxes play a significant role. While the specifics can change, here are some common taxes associated with property ownership:
Source: https://bisnisindonesia.id/

  • Acquisition Tax (BPHTB - Bea Perolehan Hak atas Tanah dan Bangunan): This tax is levied on the transfer of property rights. The rate can vary depending on the location and the type of property.
     
  • Land and Building Tax (PBB - Pajak Bumi dan Bangunan): This is an annual tax on the value of land and buildings. The rate is determined by the government and is based on the property's assessed value.
     
  • Income Tax on Rental Income: If you plan to earn rental income from the property, you may be subject to income tax. The rate can vary, and it's important to report your rental income to the tax authorities.
     
  • Value Added Tax (VAT): VAT may apply to the sale of new properties. However, it's crucial to check whether there are any exemptions or reduced rates for specific types of property.
     
  • Luxury Goods Sales Tax (PPnBM - Pajak Penjualan Barang Mewah): This tax may apply to the sale of luxury properties, and the rate can vary based on the property's value.
     

It's important to note that tax regulations can change, and different regions in Indonesia may have specific rules. Additionally, the application of taxes may be influenced by factors such as the property's value, type, and usage.

Before making any property transactions, it's highly advisable to consult with a local tax professional or legal advisor such as Moores Rowland who can provide up-to-date and accurate information based on your specific situation and the latest Indonesian tax laws. Please get in touch with us for additional details on our services including tax advisory: contact-Jakarta@moores-rowland.com or contact-Bali@moores-rowland.com.

 

**By: Stefani W. Anggraeni — Marketing Communications & Social Media Specialist