Close this search box.
Own property in Jakarta

Local real estate laws in Jakarta: What you need to know before investing

Local real estate laws in Jakarta

Table of Contents

Jakarta, the capital of Indonesia, offers a thriving real estate market with numerous investment opportunities for property investors. However, navigating the local real estate laws in Jakarta can be challenging, particularly for individuals who are unfamiliar with the local regulations. This article provides an overview of Jakarta’s local real estate laws and regulations that every property owner should know.

Are there specific local real estate laws in Jakarta?

Foreigners who consider buying property in Indonesia’s capital city should be aware of local real estate laws in Jakarta, including:

  1. Different property prices for foreigners
  2. Domicile letter exemption
  3. Exemptions for PBB payment

These local real estate laws in Jakarta only apply to the city of Jakarta.

1. Different minimum investment capital required for foreigners

Foreigners with a residency permit, such as KITAP or KITAS, can buy property in Jakarta under specific land titles, such as Hak Pakai (HP). According to local real estate laws in Jakarta, there are minimum prices set for foreigners who want to buy properties under these titles. In Jakarta, for instance, the price of a house must be no less than IDR 10 billion ($630,000), while for an apartment, it must be no less than IDR 3 billion ($189,000).

When buying property in Jakarta with only a passport, a minimum value of exchange-currency or-curr=’IDR’ or-price=’5000000000′ exc-curr=’USD’] is set for Jakarta, Banten, West Java, Central Java, East Java, Special Region of Yogyakarta, and Bali.

2. Domicile letter exemption

One of the ways for foreigners to own property in Jakarta is by establishing a PT PMA. A PT PMA, which stands for Perseroan Terbatas Penanaman Modal Asign, is a foreign-owned company with foreign investment. Setting up a PT PMA requires extensive procedures and numerous documents, such as a Deed of Incorporation, Company Registration Certificate, and tax ID

However, one of the perks of establishing a PT PMA in Jakarta is that you do not have to acquire a domicile letter. Usually, the local district authority issues a domicile letter to confirm the company address, and it takes up to three days to process. Omitting this requirement helps improve the ease of doing business and makes it easier for you to establish a foreign-owned company in Jakarta for real estate purposes. 

3. Exemptions to PBB payment

A notorious reason for entrepreneurs thinking twice about investing in Jakarta is the high property prices. The sentiment is reasonable because it is Indonesia’s central business hub. The Land and Building Tax (PBB) mandates that property buyers pay an annual tax ranging from 0.01% to 0.3% depending on the property’s valuation.

In Jakarta, however, Governor Regulation 5/2023 has extended relief for payment of PBB. Private houses worth below IDR 2 billion ($126,000) are tax-free. In addition, discounts are also given when you pay your PBB earlier in the year. These tax reliefs make it ideal to invest in Jakarta.

Buy property in Jakarta with Own Property Abroad

Are you looking to buy property in Jakarta? 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, understanding local real estate laws in Jakarta, finding suitable properties, negotiating the best deals, and conducting due diligence.

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!

Get help with buying real estate in Jakarta

Leave your name and email below – Our property expert in Jakarta will reach out to explain more on this topic and answer all your questions.

Frequently Asked Questions (FAQs)

Can foreigners buy real estate in Jakarta?

Foreigners can buy real estate in Jakarta under specific conditions. They are typically allowed to purchase property under a leasehold agreement or through a foreign-owned company (PT PMA). Freehold ownership is not available to foreigners, but they can hold property through the Hak Pakai title.

Are there local real estate laws in Jakarta for foreigners?

Jakarta, like the rest of Indonesia, has local real estate laws that apply to foreigners. These laws stipulate that foreigners can lease property but cannot own land. They can, however, own apartments or houses under the Hak Pakai title, provided they meet certain conditions such as residency status.

Why does Jakarta have different property laws for foreigners?

Jakarta has different property laws for foreigners to regulate land ownership and ensure national and economic security. These local real estate laws in Jakarta are designed to balance the interests of foreign investors with the rights and privileges of Indonesian citizens, preserving land for future generations of Indonesians.

Your guide to buying property in Jakarta

Written by Monisa Ruth Simon

Leave a Reply

Your email address will not be published. Required fields are marked *

Your guide to buying property in Jakarta

Directly contact our legal expert in Jakarta

Looking for immediate and reliable assistance? Our agent in Jakarta is here to help you out.

Don't hesitate to contact us for solutions to your queries.

Get help with buying real estate in Jakarta

Leave your name and email below – Our property expert in Jakarta will reach out to explain more on this topic and answer all your questions.