Foreign Ownership Landed Houses & Apartments in Indonesia (Update)

In order to meet foreign demand for property ownership in Indonesia as well as to provide more legal certainty (for foreigners), Indonesian President Joko Widodo signed a government regulation at the end of 2015 (Government Regulation No. 103/2015 on House Ownership of Foreigners Residing in Indonesia) that allows foreigners who reside (legally) in Indonesia to own landed houses in Indonesia for a period up to 80 years.

Regarding the purchase of an apartment, Indonesian authorities announced in mid-2015 that foreigners are to be allowed to purchase a luxurious apartment - also under the ‘right-of-use’ title - provided the apartment is priced at least IDR 10 billion (approx. USD $700,000), a rather absurd price for Indonesian standards. However, this price tag has now been adjusted according to the latest data that we have received (see table at the bottom of the page).

A new ministerial regulation (Regulation No. 13/2016 on Procedures of Residential Ownership Transfer for Foreign Citizens), which elaborates on the above-mentioned Government Regulation No. 103/2015, stipulates that a foreigner who purchased property in Indonesia is not allowed to rent out this property to others. As such, the foreigner needs to reside in the property that he has purchased. In case the expat leaves Indonesia to reside in another country, then he/she needs to release or transfer the ownership rights to another person who meets all requirements to own property in Indonesia (this can be another foreigner or an Indonesian citizen) within one year after departing from Indonesia. If ownership is not released within a one-year period after the expat left Indonesia, then the Indonesian authorities have the right to confiscate the property.

Government Regulation No. 103/2015 informed that an expat can buy a landed house in Indonesia under the right-of-use category for an initial period of 30 years. After this period, he can extend the ownership twice, once by another period of 30 years and then by a 20-year period (hence foreign ownership can reach a total of 80 years). Moreover, ownership of the house is inherited by the foreigners' offspring (although we did not receive detailed information about this matter, we assume that heirs who do not live in Indonesia need to release or transfer the ownership rights within one year after having inherited the property).

Earlier, Minister Ferry Mursyidan Baldan stated that foreigners can only buy property in Indonesia directly from the developer, implying that expats are only eligible to purchase new property. Regarding the price, he said it depends on the specific rules per zone. In the capital city of Jakarta, for example, a foreigner can only buy a landed house that has a price tag of least IDR 10 billion (approx. USD $700,000). For apartments in Jakarta the price tag needs to be at least IDR 5 billion (which is two times less expensive than the previous information that we received).

Price Mechanism Foreign Ownership of Landed Houses and Apartments in Indonesia

Zone	Landed House Minimum value that can be purchased by foreigner	Apartment Minimum value that can be purchased by foreigner
Jakarta	IDR 10 billion	IDR 5 billion
Banten West Java	IDR 5 billion	IDR 2 billion
East Java	IDR 5 billion	IDR 1.5 billion
Bali	IDR 3 billion	IDR 2 billion
Central Java Yogyakarta	IDR 3 billion	IDR 1 billion
NTB North Sumatra East Kalimantan South Sulawesi	IDR 2 billion	IDR 1 billion
Other Regions	IDR 1 billion	IDR 750 million

^{Source: Investor Daily}

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