Why are Apartment Purchases by Foreigners in Indonesia Still Low?

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By:

Team of Hukumindo

Previously, the www.hukumindo.com platform has talk about "Term and Conditions for Foreign Citizens to Buy an Apartments in Indonesia", "Is Foreign Citizens Permitted to Buy an Apartments in Indonesia?", you may read also "Variety of Apartment Ownership Rights in Indonesia" and on this occasion we will discuss about 'Why are Apartment Purchases by Foreigners in Indonesia Still Low?'.

The government has allowed property ownership such as apartments for foreign nationals (foreigners). However, the realization of purchases from foreigners is still minimal. According to the Research Colliers Indonesia, foreigners are still reluctant to buy apartment dwellings in Indonesia are two factors, namely regulatory issues and buyer motivation.[1]

"Actually, the foreign ownership regulations that have been issued are sufficient, but with the employment creation law, it should be more interesting. But it doesn't change much. Why? We can see that apartment sales to foreigners are not growing". According to Research Colliers Indonesia, property ownership regulations in Indonesia cannot be as free as Singapore. There, foreigners easily own property if they have money, so there is a lot of interest in buying. "There is no obligation to visit the apartment or have to work there. It makes people more comfortable," Research Colliers Indonesia explained. In addition, many foreigners in Indonesia are not motivated because they only work for 2 - 3 years. So they are not interested in buying property, even though there are apartments with better prices and quality.[2]

"If you buy it, you will have to sell it again, if you no longer work here, this creates problems, as long as there is a rental option, they will rent it. Except for people who have businesses here. Even then, the population is not large. The market is not large," said Research Colliers Indonesia. For information, the Government issues regulations for foreign ownership property through Government Regulation (PP) Number: 18 of 2021 concerning Management Rights of Land Rights, Flat Units, and Land Registration. Where it is written in article 69, foreigners can own a residential house that has immigration documents in accordance with statutory provisions.[3]

Occupancy that can be owned by foreigners is a landed house, right of use or right of ownership based on an agreement for granting use rights over property rights with the official deed of the land deed. Or flats built on state land parcels, right of use or right of building on state land, land with management rights, and land with property rights. Even though in Article 72 there are limits given to property ownership for foreigners, such as the minimum price, land area, amount, and designation.[4] 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. "WNA Ogah Beli Apartemen di Indonesia, Kenapa?", www.cnbcindonesia.com., diakses pada tanggal 17 Agustus 2022, https://www.cnbcindonesia.com/news/20220105141212-4-304814/wna-ogah-beli-apartemen-di-indonesia-kenapa

2. Ibid.

3. Ibid.

4. Ibid.