Get to grips with the ins and outs of property ownership in Indonesia.
Every country has different rules and regulations when it comes to property ownership. Some open their arms wide to foreigners whilst others are starting to close the door, or at least restrict, the buying power of non-residents in a bid to keep a lid on property prices.
For Indonesia two years ago the rules changed. And for the better for foreign investors. Government Regulation No 103 of 2015 details how foreigners can own property. Governs the Ownership of Residential Property by Foreign Citizens Domiciled in Indonesia was launched in a bid to promote economic investment for Indonesia. Aimed at those who wish to reside in the country for a long period of time the legislation has created a framework for property ownership specifically for foreigners. One of the main improvements from the previous legislation set in 1996 is that the length of ownership has been extended. From 50 to 80 years.
Titles
Types of property ownership is fairly limited for foreigners. Right-to-farm and right-to-build are not land title options but leasehold properties are. However under the new 2015 legislation foreigners are permitted to own land provided that it forms part of a freehold title. A right-to-use title would then need to be attached to this freehold. Complex considering different layers of titles need to be applied. A concept that is is not so common across the globe.
Spending power
Aside from ownership titles something foreigners should take heed of is value of the property they wish to buy. As set out by the Minister of Agrarian Affairs and Spatial Layout/Head of National Land Agency Regulation No 13 of 2016 on Procedures for Granting Relinquishing and Transferring Ownership of Residential Property for Foreign Citizens Domiciled in Indonesia. The amount differs for houses and apartments. Additionally location plays a role too. For example foreigners are permitted to buy more expensive property in Jakarta than say East Java. As these amounts can change as they did last year it is advised to check with the Ministry for the latest figures in case of any changes.
If you are thinking about buying property in Indonesia take a look at Dot Property’s comprehensive listings found online here or contact a local real estate agent who will be able to guide you through the process.
