The Rules for Foreigners to Own Property in Indonesia Have Changed.
The Directorate General for determination of rights and land registration published HR.01/1963/XI/2022 on 1st November 2022 in Jakarta. Contained in the decree are the instructions for implementing the decree of the Agrarian Affairs and Spatial Planning Minister/Head of the National Land Agency 1241/SK-HK.02/IX/2022 concerning the acquisition and residential house prices for foreigners.
The government previously issued law number 11 of 2020 concerning job creation as a legal umbrella for the entry of investment. One area of this law is in respect of land for foreigners and their ability to obtain property in Indonesia.
It is noted that the presence of foreigners’ provides benefits, and allows them to do business, work, or invest in the country. This is aimed to increase investment which will go on to encourage the improvement of the country’s economy. Furthermore, easy access to property for foreigners is also expected to have an impact on increasing tourism and industry so as to create employment opportunities for the community.
The Ministry has formulated and issued several policies to provide convenience for foreigners in obtaining property in Indonesia. Foreigners can own apartments built on land with the status of HGB or Hak Pakai. This is regulated in articles 144 and 145 of law number 11 of 2020 on job creation.
Based on article 69 of Government Regulation number 18 of 2021 regarding management rights, land rights, apartment units, and land registration, the requirements for foreigners to own a house as a place of residence or occupation is made easier by simply having a valid passport and visa or a stay permit.
Foreigners can own a house of occupation or residence in the form of:
- Landed house with Hak Pakai issued by the state directly or Hak Pakai on:
(i) Hak Milik, which is controlled by an agreement of grant of Hak Pakai over Hak Milik recorded with a deed by PPAT;
(ii) Hak Pengelolaan, based on a land-use agreement with the holder of the Hak Pengelolaan.
- Apartments built on plots of land where the land has the status of:
(i) Hak Pakai or HGB, issued by the state directly;
(ii) Hak Pakai or HGB, on land with the status of Hak Pengelolaan;
(iii) Hak Pakai or HGB, on land with the status of Hak Milik.
Foreigners are still limited to ownership of a house of residence or occupation.
For landed houses that have a positive impact on the economy and society, more than one parcel of land may be granted, or for an area exceeding 2,000 m2 with the permission of the Minister. Landed houses include:
- As a house in the luxury home category in accordance with the provisions of the legislation
- One lot of land per person or family
- The land area is 2,000 m2
Decree Number 1241/SK/HK.02/IX/2022 states the type of purchase and the price of a house or residence or occupancy. The policies written are:
- Ownership of residential houses for foreigners can be of a new house or unit or old house or unit
- Houses of residence or occupation for foreigners consist of a landed house and/or apartment unit and may be bequeathed to eligible heirs, in the event that the foreigner dies; be used as collateral for debt with Hak Tanggungan, and transferred to another party.
The minimum price limits for landed houses and apartment units apply to each province throughout Indonesia.
“Regarding houses of residence or occupation that have been obtained by foreigners before the Decree Number 1241/SK/HK.02/IX/2022 takes effect, the price of houses of residence will follow provisions prior to the entry into force of this Decree,” concluded the regulation.