It is no secret that there are specific challenges for foreigners who want to buy a property in Indonesia. Navigating the avenue of property purchases in Indonesia can be daunting. However, there is no shortcut. You must understand the process as one of the crucial steps of how to buy property as a foreigner in Indonesia.
In that case, this guide will walk you through the essential steps, legal considerations, and expert tips to ensure a smooth and successful property purchase in this captivating archipelago.
Before delving into how to buy property as a foreigner in Indonesia, understanding the legal landscape should be your key focus. The government regulation on land rights, introduced in 2021, simplified the process for foreigners to purchase property in Indonesia.
With the updated regulations, foreigners only need to provide immigration documents like a passport or visa. This change feels significant because the previous regulation required foreigners to have long-stay (KITAS) or permanent-stay (KITAP) permits to own property in Indonesia.
Currently, the foreign property market in Indonesia tends to focus on areas with ample job opportunities and popular tourist destinations. This market can be divided into two main segments:
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As a foreigner finding how to buy property in Indonesia, you must know. Provinces with significant populations and popular tourist attractions typically have higher floor prices than less-visited areas.
| Region | IDR (billion) | USD |
| Jakarta | 5 | 330,000 |
| Banten | 5 | 330,000 |
| West Java | 5 | 330,000 |
| Central Java | 5 | 330,000 |
| East Java | 5 | 330,000 |
| Yogyakarta | 5 | 330,000 |
| Bali | 5 | 330,000 |
| West Nusa Tenggara | 3 | 198,000 |
| North Sumatra | 2 | 132,000 |
| East Kalimantan | 2 | 132,000 |
| South Sulawesi | 2 | 132,000 |
| Riau Island | 2 | 132,000 |
| Other Provinces | 1 | 66,000 |
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| Region | IDR (billion) | USD |
| Jakarta | 3 | 198,000 |
| Banten | 2 | 132,000 |
| West Java | 2 | 132,000 |
| Central Java | 2 | 132,000 |
| East Java | 2 | 132,000 |
| Yogyakarta | 2 | 132,000 |
| Bali | 2 | 132,000 |
| Other Provinces | 1 | 66,000 |
The prices shown in US dollars are determined from official rupiah prices, calculated using the exchange rate on August 9, 2023, and rounded to the nearest thousand.
There are several types of property ownership in Indonesia, according to the applicable laws and regulations; those are:
You can use your land without expiration if you have the Ownership Right (Hak Milik). However, only Indonesians can buy this right because it is the highest land ownership authority under Indonesian law.
With the Right to Build (HGB), you can build on land you do not own. This right lasts 30 years and can be extended up to 20 years. It is granted to companies under Indonesian law and to Indonesian nationals.
The Right to Cultivate (Hak Guna Usaha) allows you to use the land for farming, raising animals, and fishing, but the government controls the land. For Indonesian companies, it is valid for 35 years; for individuals, it can be used for 25 years, with the option to extend for another 25 years.
If you have the Right to Use (Hak Pakai), you can use land owned by the State or someone else for gathering goods. Foreigners, Indonesian nationals, local businesses, and businesses with local and foreign ownership can obtain it.
The Leasehold Right (Hak Sewa) lets you use someone else's land for a specific time by paying rent according to your lease agreement.
These permits allow you to clear land that is not yours and gather materials and goods from the forest on that land.
Read more: 8 complete guides for foreigners buying property in Bali
Now, we're discussing the proper way to buy property in Indonesia. Several steps should be considered before deciding to buy property in Indonesia; among others are:
Having a PT PMA allows foreigners to buy or rent property in Indonesia. The process can be complex, and many people use local agencies to simplify this process.
An experienced real estate agent can save you time and effort. They have access to various property listings, help with negotiations, and protect your interests.
Depending on your budget and preferences, you can find properties in the city center, near businesses, or in residential areas.
Ensuring two essential documents are necessary for legal reasons: the Certificate of Property and the Building Approval.
Due diligence is essential to avoid legal issues. You can verify land ownership licenses and review the contract.
The SPA is a legal document outlining buyer and seller obligations. It must be signed in front of a notary. The down payment usually reaches 10-30% of the total price.
Transfer ownership from the seller to you in front of a notary. Pay the Transfer Tax (BPHTB) on time to proceed.
The notary will transfer ownership once payments and taxes are settled.
With the simplified process, foreigners willing to own property in Indonesia are no longer required to prepare complex documents.
With such facilitation, any foreign individual or entity that aims to invest in Indonesia's property can seek help from Ascentium Indonesia, which offers land and property ownership and a business license.