A Guide to Buy Property in Indonesia for Foreigners and Expatriates

The Minister of Agrarian Affairs and Spatial Planning/Head of The National Land Agency (ATR/BPN) issued Regulation Number 29/2016.

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A Guide to Buy Property in Indonesia for Foreigners and Expatriates

RumahHokie.com (Jakarta) – Two years ago, the Government issued Government Regulation (PP) Number 103/2015 concerning Housing Ownership by Foreigners Based in Indonesia.

However, this regulation has not boosted property transactions by expatriates, because the detailed rules have not been properly socialized. This uncertainty makes property developers hesitant, not to mention the Right to Use (Hak Pakai) used by foreigners is considered less credible and not bankable.

Good news comes after The Minister of Agrarian Affairs and Spatial Planning/Head of The National Land Agency (ATR/BPN) issued Regulation Number 29/2016 on Procedures for the Granting, Release or Transfer of Right to Ownership of Residential Homes by Foreigners Based in Indonesia.

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This Ministerial Regulation is considered more explicitly positioned Right to Use. This regulation mentioned, Right to Use can be obtained if the expatriates purchase property that already has the status of Right of Ownership (Hak Milik) or Right to Build (HGB).

When the property is purchased by foreigners, then the status of ownership becomes state land and then it will be changed to Right to Use (Hak Pakai).

If the property owned by foreign citizens is sold to Indonesian citizens, then Right to Use can be changed back to Right of Ownership (Hak Milik) or Right to Build (HGB).

The notary is the party making the deed of transfer of rights, while the auction officer makes the deed of minutes of auction on Right of Ownership (Hak Milik) or Right to Build (HGB).

Duration, Size, and Price
The duration of Right to Use for a new landed house or apartment is 30 years, but can be extended 20 years, and renewed for another 30 years. So the total of duration is 80 years.

The Ministerial Regulation also mentioned the residence of foreigners can be used as collateral for the debt burdened by mortgage rights. In addition, the property can also be inherited if the owner passed away.

There are some other regulations, including the maximum size and the minimum price of the property. A foreigner can own property on a maximum land of 2,000 square meters per person in one plot of land.

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If the foreigners give positive impact to the national economy, then they can be given a residence with a land area of more than 2,000 square meters with permission from The Minister of Agrarian Affairs and Spatial Planning.

Meanwhile, the minimum price of property for foreigners is regulated by region. For landed house, minimum price in Jakarta is IDR10 billion, Banten (IDR5 billion), West Java (IDR5 billion), Central Java (IDR3 billion), Yogyakarta (IDR5 billion), East Java (IDR5 billion), Bali (IDR5 billion), West Nusa Tenggara (IDR3 billion), North Sumatera (IDR3 billion), East Kalimantan (IDR2 billion), South Sulawesi (IDR2 billion), and other provinces (IDR1 billion).

For apartment, minimum price in Jakarta is IDR3 billion, Banten (IDR2 billion), West Java (IDR1 billion), Central Java (IDR1 billion), Yogyakarta (IDR1 billion), East Java (IDR1.5 billion), Bali (IDR2 billion), West Nusa Tenggara (IDR1 billion), North Sumatera (IDR1 billion), East Kalimantan (IDR1 billion), South Sulawesi (IDR1 billion), and other provinces (IDR750 million).

Anto Erawan
anto.erawan@rumahhokie.com

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