How foreigners can now buy property in Indonesia with a passport

Indonesia has implemented a new property law that enables foreign nationals (WNA) to buy property in Indonesia with a passport. The relaxation of real estate regulations is an effort by the Indonesian government to attract greater foreign investment. Formerly, foreigners could only buy Hak Pakai (HP) property, purchase via leasehold, or set up a PT PMA to invest in property for income generation. Nevertheless, as of now, foreigners only need a passport to purchase Indonesian property, and we will comprehensively explain the procedure.

Buy property in Indonesia with a passport: How does it work?

The Ministry of Agrarian Affairs and Spatial Planning/National Land Agency announced in 2023 with Government Regulation No. 18/2021 that foreigners can buy and own property in Indonesia by simply presenting their passports or visas. Before that, foreigners had to have a Limited Stay Permit Card (KITAS) or a Permanent Stay Permit Card (KITAP) to buy property in Indonesia. Indonesia’s new property law states that these permits will be provided after the property purchase.

Indonesia’s new property law aims to boost Indonesia’s competitiveness against countries like Singapore, Malaysia, and Thailand. The government believes encouraging foreign activity in Indonesia can enhance the nation’s competitiveness. In line with that, the Indonesian government also launched the Second Home Visa in 2022 and will launch the Golden Visa at the end of 2023. Indonesia hopes to create more job opportunities and stimulate the national economy by making it easier for foreigners to invest in Indonesian real estate.

Government Regulation No. 18/2021 has also expanded the ownership options for apartments for foreigners who want to buy property in Indonesia with a passport, allowing for the Hak Pakai (right to use) or Hak Guna Bangunan (right to build) on state-owned land, property rights land, and management rights land (HPL). Hak Guna Bangunan is valid for a maximum of 80 years.

Requirements to buy property in Indonesia with a passport

There are several requirements to buy property in Indonesia with a passport. First, the foreign national needs to have a passport valid for at least 36 months from the moment of purchase. There are also regulations about the land size and minimum investment capital. A person can own only one plot of land with a maximum of 2,000 m².

Minimum price to buy landed houses in Indonesia with just a passport:

• Jakarta, Banten, West Java, Central Java, East Java, Special Region of Yogyakarta, and Bali: IDR 5 billion ($315,000)
• West Nusa Tenggara: IDR 3 billion ($189,000)
• North Sumatra, East Kalimantan, South Sulawesi, Riau Archipelago: IDR 2 billion ($126,000)
• Other regions or provinces: IDR 1 billion ($63,000)

Minimum price to buy flats/apartments in Indonesia with just a passport:

• Jakarta: IDR 3 billion ($189,000)
• Banten, West Java, Central Java, East Java, Bali, Special Region of Yogyakarta: IDR 2 billion ($126,000)
• Other regions or provinces: IDR 1 billion ($63,000)

Other ways to buy property in Indonesia

Foreign nationals can now buy property in Indonesia with a passport, although there are still several other ways to buy property in Indonesia:

• Hak Pakai: Foreigners who reside in Indonesia can buy property through a Hak Pakai title. Not all properties can be bought with Hak Pakai, and there are specific other Hak Pakai requirements, such as minimum investment requirements and a valid Indonesian work permit.
• Hak Guna Bangunan: The Hak Guna Bangunan (HGB) gives foreigners the right to construct buildings on land owned by an Indonesian. Hak Guna Bangunan, mostly valid for 30 years and extendable up to 80 years, makes building a villa or house possible without investing in the land. There are several Hak Guna Bangunan requirements one must meet to be able to obtain an HGB title.
• Leasehold: Many foreigners opt to buy property through a leasehold agreement, which gives an individual the right to lease land and properties for an extended period, mostly 25 years. Leasehold agreements can be used for residential or commercial purposes, making them popular for individuals and PT PMAs.
• Investment through PT PMA: Those considering investing in property and generating rental income can buy Indonesian property through a PT PMA, which is a so-called foreign-owned company. This company is an Indonesian entity that can hold freehold property or lease property. One of the major benefits is that a PT PMA allows a foreigner to obtain KITAS, a temporary stay permit valid for two years.

Buy property in Indonesia with Own Property Abroad

Are you looking to buy property in Indonesia? Own Property Abroad can assist you and ensure a seamless and hassle-free property journey. Thanks to our extensive knowledge and local experience in the Indonesian market, we can help with legal requirements, finding suitable properties, negotiating the best deals, and conducting due diligence.

With our expert team, you won’t have to navigate the complexities of the Indonesian market alone. For further information on how we can assist you, kindly drop your details below or email us at [email protected]. Let’s start working on your property success story today!

Frequently Asked Questions (FAQs)