Indonesia’s attractive real estate market is catching the attention of foreigners, particularly in regions like Batam, Jakarta, and Bali.
For those looking to invest in Indonesian properties, the process is relatively straightforward, requiring only a passport, visa, or residence permit.
Ignesjz Kemalawata, Vice President for Legislation and a prominent figure in real estate organizations like FIABCI, shared some reasons behind this trend. Jakarta, a global city with robust infrastructure, draws foreigners seeking opportunities. Bali’s reliance on tourism makes it an attractive destination, and Batam’s proximity to Singapore makes it a hotspot for buyers from the city-state.
Notably, countries like Singapore and Australia have expressed interest in the Indonesian property market, with diverse preferences ranging from flats and apartments in Batam to apartments in Jakarta and villas in Bali.
Nevertheless, there are some hurdles for foreign property buyers, primarily involving administrative procedures. The process of adapting tax identification numbers to passport numbers is underway in various regions, such as Batam and Bali.
While foreign property ownership can bring economic growth, job opportunities, and increased tax revenue, it’s essential to note that there are limitations. Foreigners can typically own landed houses, provided they adhere to specific criteria outlined in the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency’s Regulation Number 18 of 2021:
- Landed houses must comply with statutory provisions, especially in the luxury house category.
- Each person or family is limited to owning one plot of land, with a maximum area of 2,000 square meters.
- Additional land or larger areas may be allowed with ministerial permission, under certain conditions.
Moreover, the types of flats available for foreign ownership are generally commercial flats, as specified in Article 185 of the same regulation. These flats should be built on land with specific usage rights, such as Right to Use or Right to Build on State Land, Right to Use or Right to Use Building on Land, Right to Management, or Right to Use or Building Use Rights on Freehold land.
Lastly, Article 187 paragraph 2 of the regulation mentions that foreigners can purchase both new and old houses/units, with the price determined by a Ministerial Decree.
In summary, foreign ownership of property in Indonesia is feasible but subject to specific regulations designed to balance economic benefits with safeguarding the nation’s interests.