Term and Conditions for Foreign Citizens to Buy an Apartments in Indonesia

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By:

Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Is Foreign Citizens Permitted to Buy an Apartments in Indonesia?", "Variety of Apartment Ownership Rights in Indonesia", you may read also "What Types of Land Ownership May Company Obtain In Indonesia?" and on this occasion we will discuss about 'Term and Conditions for Foreign Citizens to Buy an Apartments in Indonesia'.

Previously, we discussed the types of apartment ownership rights in Indonesia. From this type of ownership, it can be known about the type of right mat that is suitable for you, especially foreign nationals who want to buy an apartment in Indonesia. In addition, on previous occasions, we have also answered the basic question of whether a foreign citizen can buy an apartment in Indonesia, and the answer is 'yes', for those of you foreign nationals, you can buy an apartment in Indonesia. It's just that, from our previous two articles, there are questions that have not been completed, because of course there are terms and conditions that apply specifically to those of you foreign nationals who want to buy an apartment in Indonesia. On this occasion we are here to try to answer these questions. The following are the terms and conditions:

1. Ownership Time Limit

The conditions for purchasing foreign property in Indonesia are quite strict. There are many provisions that are applied, according to Government Regulation of the Republic of Indonesia No. 103 of 2015 concerning Ownership of Residential Houses or Occupancy by Foreigners Domiciled in Indonesia, as stated in Article 5, foreigners are given the Right of Use for the purchase of a new single house and the Right of Ownership of the condominium unit above the Right of Use for the purchase of a condominium unit for the purchase of a new unit. Referring to Permenkumham (Regulation of the Minister of Law and Human Rights) No. 23 of 2016 Article 1 paragraph 1, the requirements for buying a house for foreigners include: a). Domiciled in Indonesia; b). Not an Indonesian citizen; c). Providing benefits, doing business, working or investing in Indonesia.[1]

The foreign property ownership as referred to is: a). Single house on land (1) Right of Use or (2) Right of Use on Ownership that is controlled based on an agreement granting Right of Use over Ownership with a deed of Land Deed Maker Official (PPAT); b). A condominium unit (flat unit) which is built on a land parcel with the Right to Use. PP (Government Regulation) Number: 103/2015 states, Single Houses are given on land with Use Rights that can be owned by Foreigners given for a period of 30 (thirty) years, and can be extended for a period of 20 (twenty) years. In the event that the extension period referred to ends, the Right of Use may be renewed for a period of 30 (thirty) years.[2]

As for Single Houses on land with Right to Use (Hak Pakai) over Ownership Rights controlled under the agreement as referred to, the Right to Use is granted for an agreed period of not longer than 30 (thirty) years. The Right of Use may be extended for a maximum period of 20 (twenty) years in accordance with the agreement with the holder of the land right, and may be renewed for a maximum period of 30 (thirty) years in accordance with the agreement with the holder of the land right. Article 8 of PP (Government Regulation) Number: 103 of 2015 says: "The extension and renewal as intended is carried out as long as the Foreigner still has a residence permit in Indonesia."[3]

2. Property Must be Occupied

PP (Government Regulation) No. 103 of 2015 also stipulates that if a foreigner or heir who is a foreigner who owns a house built on a land of use rights or based on an agreement with the holder of land rights is no longer domiciled in Indonesia, within a period of one year, he is obliged to relinquish or transfer the rights to the house and land to other parties who meet the requirements.[4]

If within the period as intended (1 year) the right to property of the foreigner has not been released or transferred to another party who meets the requirements, the house (will) be auctioned off by the State, in the event that it is built on land with Right of Use on State land; and the house belongs to the holder of the right to the land concerned, in the event that the house is built on land based on the agreement as intended.[5]

3. The Basis of the Right of Ownership is the Right of Use

Foreigner property ownership has been regulated based on PP (Government Regulation) Number: 103 of 2015 article 5, but the certificate that will be used is the Right of Use, not the Right of Ownership. It is also explained in Article 6 PP (Government Regulation) No. 103 of 2015 that the certificate of use of property rights of foreigners is valid for 30 years and is extended for 20 years, then it will be renewed for 30 years. The total right to use foreign property to live in is 80 years. When the usufructuary rights have been completed, it will return to the property rights party.[6]

4. Applying for Building Use Rights (HGB) for Companies

If the foreigner's property is not a residence but a Company? Then the foreigner can apply for Building Use Rights (HGB) if he has his own PT (Company). The use of HGB on land that does not belong to him has a term of 30 years and can be extended for 20 years.[7]

5. Have a Limited Stay Permit Card (KITAS)

In accordance with what has been stipulated in PP (Government Regulation) Number: 103 of 2015, Article 2 Paragraph 2 that only foreigners who have a residence and permanent permit can buy property in Indonesia. The permit is a Limited Stay Permit Card (KITAS) issued by the Ministry of Law and Human Rights. KITAS is the main requirement for the procedure for buying foreign property. Various requirements that are not easy must be passed to obtain a KITAS, one of which is having to work in Indonesia first. KITAS can be extended for 2 years, with the overall residence permit in Indonesia not more than 6 years.[8]

6. Not all Types of Housing can be Purchased

The question arises, can foreigners buy any type of property they want? Not all types of property can be purchased by foreigners. This is stated in Article 1 Paragraph (2) and Paragraph (3) PP (Government Regulation) Number: 103 of 2015, that only single houses and flats can become the property of foreigners. Flats or condominium units are flats that have the purpose of being a place to live and are connected to public roads. While a single house is a house that has one lot and one of the walls is not built on the boundary of the lot.[9]

7. Property Can't Be Purchased from Second Hand

Keep in mind that foreign property must be purchased directly from the developer or land owner directly without intermediaries or second parties. This is in accordance with the provisions of Permendagri (Minister of Home Affairs Regulation) Number:13/2016, Article 2. This means, before buying the property you want, you as a foreign citizen need to find accurate information about a credible developer.[10]

8. Inheritable Property

As stated in Article 10 Paragraph 2 PP (Government Regulation) Number: 103 of 2015, if the foreigner does not transfer the rights to the property within 1 year, the property will be auctioned by the State or become the property of the holder of the land rights in accordance with the agreement. This regulation applies if the foreigner's property is no longer inhabited within a period of 1 year. Then the foreigner is obliged to relinquish or transfer the property rights to a qualified party. In other words, foreigner property can be inherited both to Indonesians and foreigners.[11]

9. Married to Indonesian Citizen (WNI)

A foreigner is required to marry an Indonesian in order to own property. This is done to complete the requirements for foreigners to purchase foreign property. Thus, foreign nationals have the opportunity to become Indonesian citizens. Foreign Citizens are required to list their property in the Prenuptial Agreement. The property of the foreigners listed will become the joint property (harta bersama) of the spouse.[12]

10. There is a Limit on Property Prices That Can Be Purchased by Foreign Citizens (WNA)

In accordance with Minister of ATR/Head of BPN Regulation 13/2016 and Minister of ATR/Head of BPN 29/2016, the following is the minimum (minimum) price for property purchase for Foreign Citizens in several provinces:[13]

• Minimum house price that can be purchased by foreign nationals: Jakarta 10 Billion Rupiah, Banten 5 Billion Rupiah, West Java 5 Billion Rupiah, Central Java 3 Billion Rupiah, Special Region of Yogyakarta 3 Billion Rupiah, East Java 5 Billion Rupiah, Bali 3 Billion Rupiah, West Nusa Tenggara 2 Billion Rupiah, North Sumatra 2 Billion Rupiah, East Kalimantan/Borneo 2 Billion Rupiah, South Sulawesi 2 Billion Rupiah and other areas 1 Billion Rupiah.
• Minimum apartment price that can be purchased by foreign nationals: Jakarta 5 Billion Rupiah, Banten 1 Billion Rupiah, West Java 1 Billion Rupiah, Central Java 1 Billion Rupiah, Special Region of Yogyakarta 1 Billion Rupiah, East Java 1,5 Billion Rupiah, Bali 2 Billion Rupiah, West Nusa Tenggara 1 Billion Rupiah, North Sumatra 1 Billion Rupiah, East Kalimantan/Borneo 1 Billion Rupiah, South Sulawesi 1 Billion Rupiah and other areas 750 Million Rupiah.

And if you have any legal issue with this topic, contact us then, feel free in 24 hour, we will be happy to assist you. 

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

________________

References:

1. "Ketentuan dan Prosedur Pembelian Properti Warga Negara Asing (WNA) di Indonesia", www.rumah.com., Diakses pada tanggal 12 Agustus 2022, https://www.rumah.com/panduan-properti/properti-wna-8121

2. Ibid.

3. Ibid.

4. Ibid.

5. Ibid.

6. Ibid.

7. Ibid.

8. Ibid.

9. Ibid.

10. Ibid.

11. Ibid.

12. Ibid.

13. "Ini Dia Minimal Harga Properti Untuk WNA", www.rumah.com., Diakses pada tanggal 12 Agustus 2022, https://www.rumah.com/berita-properti/2018/7/173112/ini-dia-minimal-harga-properti-untuk-wna