Indonesia, with its stunning landscapes and rich cultural heritage, has become an attractive destination for foreign property investors. Whether you’re a tourist enchanted by the country’s beauty, an investor looking for lucrative opportunities, or a retiree seeking a serene abode, Indonesia offers a range of property options to suit your needs. This guide aims to provide an in-depth look at foreign property ownership in Indonesia, highlighting recent regulatory changes, investment requirements, and the advantages of using professional services to navigate the process.
In recent years, Indonesia has made significant strides in simplifying the process for foreigners to own property. In this article, you will be informed about the property ownership in Indonesia as well as how you can purchase the property in Indonesia.
Types of Property Ownership in Indonesia
1. Hak Pakai (Right to Use)
Hak Pakai is a legal framework that allows foreigners to own property in Indonesia under the “right to use” title. This type of ownership is typically granted for an initial period of up to 30 years and can be extended. It is particularly popular among expatriates and retirees who wish to live in Indonesia long-term as this can be owned by foreign individuals.
The ownership of the Right to Use can be granted to the individual foreigners with certain requirements and limitations such as the minimum amount of transaction, the maximum size of the land, and the possession of the Temporary Stay Permit (KITAS) and Permanent Stay Permit (KITAP). These amounts vary depending on the location and type of property. Generally, urban areas and prime locations require higher investment amounts compared to rural or less developed regions.
Under Right to Use, the foreigner can own a house or residence in the form of a landed house or commercial apartment. The subsidized apartments are prohibited to be owned by foreigners so that you can only buy a commercial apartment. Meanwhile for the landed house, there are minimum requirements as below:
- A house with a luxury house category in accordance with the provisions of the legislation; you may anticipate a regulation in each region/province/city to set out the minimum price of a luxury house category.
- 1 (one) plot of land per person/family. In terms of having a positive impact on the economy and social, the landed house can be granted for more 1 (one) plot of the land or more than 2.000m2 with permission from the Minister; and/or
- The maximum land area is 2,000 m2 (two thousand square meters).
If the land title of the landed house is freehold title or right to build, the foreigner must change the land title to right to use by making an agreement with the owner of freehold title regarding the granting of the right from the owner of freehold title to the foreigner before Land Deed Official (Pejabat Pembuat Akta Tanah / PPAT). Such agreement shall be registered to the Indonesian Land Agency (BPN) so that BPN will issue the Right to Use Certificate in the name of the foreigner.
2. Hak Guna Bangunan (Right to Build)
Hak Guna Bangunan grants foreigners the right to build and develop on state-owned land. This title is usually valid for 30 years and can be renewed. This type of property ownership can only be owned by an Indonesian legal entity (PT PMA) and cannot be held by foreign individual. Although it cannot be owned by foreign individual, owning property through a PT PMA is the most preferred choice by foreigners as there is no restriction/requirement as mentioned in the section 1 above. The structure of ownership through a PT PMA might be different from one another. Therefore, it is best to discuss how to set up the property ownership with the expert to avoid any legal issue in the future.
Benefits of Using Our Company for Property Purchase
1. Expertise in Company Formation
For those looking to purchase property through a company, we offer expert services in company formation. This can be a strategic approach to property ownership, providing additional flexibility and potential tax benefits.
2. Navigating Legalities and Paperwork
The legal landscape of property ownership in Indonesia can be daunting for foreigners. Our company specializes in handling all legal aspects, ensuring that the process is smooth and compliant with local regulations. From obtaining necessary permits to finalizing transactions, we manage every detail.
3. Experiences in Handling Property Purchasing
CPT Corporate handle property purchases from simple to complex transactions. We assist with house residency, villas and hotels throughout Indonesia.
Addressing Common Concerns for Foreign Property Buyers
- Language Barriers: Language can be a significant barrier for foreigners in Indonesia. Our team bridges this gap, ensuring clear communication and understanding throughout the property buying process.
- Legal Complexities: The legal complexities of foreign property ownership can be overwhelming. Our experienced legal team simplifies these complexities, providing clear guidance and handling all necessary legalities.
- Cultural Differences: Cultural differences can pose challenges in any international transaction. We offer cultural consultancy services to help you navigate and respect local customs, ensuring a smooth and respectful process.
- Call to Action: Ready to explore property ownership in Indonesia? Contact us today for a consultation, and let us help you find your dream property. Visit our website to browse our listings and learn more about our comprehensive services.
Frequently Asked Questions
1. What is Hak Pakai and how does it work?
Answer: Hak Pakai, or “right to use,” allows foreigners to own property in Indonesia for an initial period of up to 30 years, with the possibility of extensions.
2. Can foreigners buy land in Indonesia?
Answer: Foreigners cannot directly buy freehold land in Indonesia, but they can obtain property rights such as Hak Pakai or Hak Guna Bangunan (through PT PMA).
3. What are the minimum investment requirements for foreign property ownership?
Answer: Minimum investment amounts vary by location and property type, generally higher in urban and prime areas.
4. Is it necessary to form a company to buy property in Indonesia?
Answer: While not always necessary, forming a company can provide additional flexibility and benefits for property ownership.
5. How can your company assist with property purchase?
Answer: We offer comprehensive services, including land due diligence, legal assistance, company formation, and connections with trusted real estate agents and developers.
Conclusion
Navigating foreign property ownership in Indonesia is made easier with the right guidance and professional assistance. With recent regulatory changes, a variety of property rights options, and our comprehensive support services, owning property in Indonesia is now more accessible and secure. Whether you’re looking to invest, retire, or simply enjoy a slice of paradise, Indonesia offers unparalleled opportunities. Contact us today to start your journey towards owning property in this beautiful and dynamic country.
Discover the seamless process of foreign property ownership in Indonesia with our expert services. From navigating legalities to connecting with trusted real estate agents, we ensure your investment is secure and stress-free. Learn more about how we can assist you by visiting our website [LINK CONTACT US].