Selling Property in Indonesia to Foreign Buyers

Buying a home in Indonesia as an orang asing (literally “alien” or “foreigner”) is simpler than ever before.


For a long time, foreigners looking to acquire property in the Indonesia were stymied by a plethora of laws that made it nearly impossible for them to do so.


In 2015, President Joko ‘Jokowi’ Widodo, who was re-elected this year to a second five-year term, began implementing reforms that relaxed permission requirements for foreign enterprises and households.

The Indonesia Real Estate Association (REI) and the Indonesian government released a handbook for foreigners looking to purchase real estate in Indonesia in November of 2018.


Although the rule has been in effect for a while, Indonesia’s coordinating minister of economic affairs, Darmin Nasution, stated in a statement for REI that there is “a need to optimise the execution of the policy addressing ownership for foreigners.”

Get ready for the annual PropertyGuru Indonesia Property Awards by brushing up on the ins and outs of buying real estate on any of Indonesia’s 17,508 islands.


1. Everyone is welcome

The ability to purchase real estate in Indonesia is now available to holders of all visa categories. Permanent Residence Permits, Diplomatic Permits, Limited Stay Permits, Service Permits, and even Visitor Permits are all types of permits that allow the holder to purchase real estate.

Visitors from visa-waiver nations, such as those in the Association of Southeast Asian Nations, can simply apply for a visa upon arrival in Indonesia.


2. Fight for your (land) rights

Government Regulation No. 103 of 2015 on Residential Ownership for Foreigners was signed by the Jokowi government a few years ago, enabling foreigners with permanent residence in Indonesia to own landed properties with lease terms of up to 80 years. The Right to Use (hak pakai) title gives orang asians ownership of residential land for 30 years with the option to renew for another 20 years. After the first 30-year term of a Hak pakai expires, it can be renewed for a further 30 years.

However, there is one catch: foreigners may only purchase a single plot of property that is no more than 2,000 square metres in size.


3. If the price is right

Buyers from outside of Indonesia can take advantage of the hak pakai system, but only if they are willing to pay beyond the area’s minimal price. As an illustration, the minimum price for a landed residence in Jakarta is IDR10 billion (USD667,000), but in Bali and Yogyakarta, the minimum price is just IDR5 billion.

The minimum purchase price for a Right to Use title flat in Jakarta is IDR3 billion, and in Bali it is IDR2 billion. Yogyakarta’s Right-to-Use condos start at around IDR1 billion.


4. A generational usage privilege

The advantages of hak pakai outweigh its drawbacks. Anyone who has a valid work visa, student visa, or permanent resident card can inherit a Right to Use. If the land is sold to an Indonesian citizen or permanent resident, the title will revert to hak guna bangunan (HGB), or Right to Build.


5. Unlimited number of apartments on offer

A cap on the number of apartments that an orang asing may own has not been set by the government. Multiple apartment buildings constructed on property having a Right to Use title or converted from strata title to Right to Use are available for purchase by foreign nationals.


6. Important Legal Information

There are five main sorts of taxes that non-resident foreigners must pay when purchasing a landed property or apartment. Super luxury tax of 5% is imposed on properties priced over IDR5 billion, luxury sales tax of 20% is imposed on homes priced over IDR20 billion, VAT of 10% is imposed, and a continuous property tax is imposed on all properties. On the other side, sellers are subject to a 2.5% exit tax.

According to Soelaeman Soemawinata, president of the Indonesia Real Estate Association, Indonesia has fully opened its doors to international enterprises and residents with the implementation of deregulation programmes beginning in 2015.

The Indonesia Real Estate Association has high hopes that opening the country’s real estate market to international investors will have a significant impact on the country’s overall economy. These factors make this an excellent time to invest in Indonesia, and the real estate market in particular stands to benefit greatly. Sell Property in Indonesia to Overseas Buyers


Compare listings

Translate ┬╗
%d bloggers like this: