Buying a Property

Indonesia, with its thriving economy and stunning landscapes, offers a compelling destination for foreigners looking to invest in property. The country’s real estate market presents a lucrative opportunity for property value appreciation, making it an attractive investment. For those seeking a picturesque location for retirement or vacation homes, Indonesia’s diverse attractions and vibrant culture provide an ideal backdrop. While full ownership is not available to foreigners, the leasehold system in Indonesia allows for long-term leases, offering a secure way to enjoy land use without the complexities of outright ownership. Additionally, condominiums can be owned under the “Hak Pakai” title, which provides a clear legal framework for foreigners. This, coupled with the potential for rental income, especially in tourist hotspots, makes purchasing property in Indonesia a potentially profitable venture. Moreover, for business-minded individuals, establishing a local entity can facilitate property ownership and offer opportunities for business expansion. By investing in Indonesian real estate, foreigners have the chance to participate in the country’s economic growth and enjoy the benefits it brings

Here are some steps to follow to buy a property in indonesia:

1. Once you and the seller have agreed on a price, you must sign an Offer/Acceptance Letter – at this point, you should also submit a 3% down payment.

2. After two weeks, the Sale Agreement will be signed, and the remaining deposit amount (7%) will be paid over the next three months.

3. The purchase agreement is stamped and the purchase price is verified at the Stamp Office. The buyer is then required to pay stamp duty (up to 3 percent of the price).

4. The property’s ownership change must be registered with the Land Office Registry.

It’s important to note that Indonesia has specific regulations for foreign property ownership. For instance, foreigners can only purchase leasehold property, and the property must meet a minimum value threshold. Eligibility criteria include having a valid visa and a Taxpayer Identification Number (NPWP), and foreigners are limited to owning one plot of land with a maximum size of 2,000 m².

Additionally, recent changes under Government Regulation 18 of 2021 (GR 18/2021) have relaxed some restrictions, allowing foreigners to own apartments and landed houses in certain economic zones, provided the properties meet the minimum price set by the province

Yes, foreigners can buy apartments in Indonesia, but there are specific regulations they must follow. According to Indonesian law, full ownership of land (Hak Milik) is exclusive to Indonesian citizens. However, foreigners are allowed to own property under a leasehold arrangement or through the “Hak Pakai” title for apartments.

The Government Regulation Number 18 of 2021, which is a derivative of the Job Creation Law, states that foreigners can own flats or apartments in Indonesia if they have a permit in accordance with the provisions of laws and regulations. This means that foreigners who have an official immigration permit and meet certain criteria can own residential properties such as apartments.

It’s important to note that there may be restrictions on the type of apartments that can be owned by foreigners, such as a minimum price threshold, and the property must be located in certain areas or economic zones. Additionally, the process of purchasing property as a foreigner in Indonesia typically involves verifying the purchase agreement at the Stamp Office and registering the change of ownership with the Land Office Registry

Prepare funds equal to 3% to 5% of the purchase price to pay legal expenses and stamp duty. Legal expenses comprise the lawyer’s professional fee and any disbursements. They will bill you the entire amount when you complete the Loan Agreement.

Real estate buyers in Indonesia are protected by various provisions and regulations established under Indonesian law. One significant aspect of this protection involves the requirement for a clear and legally binding Real Estate Purchase Agreement. This agreement outlines the terms and conditions of the property transaction, providing buyers with a formal document to safeguard their interests and rights. Indonesian law also requires sellers to provide accurate information about the property’s legal status, ownership history, and any encumbrances or defects that may affect its value or use. Additionally, buyers have recourse to legal remedies in the event of disputes or breaches of contract, including the right to seek compensation or specific performance through the Indonesian court system.