The government has made property in Indonesia increasingly accessible to foreigners by simplifying ownership regulations.
For instance, recent policies have eased requirements, making it possible for non-citizens to invest in real estate legally. The government has introduced faster permits and required PT PMAs for certain property types to attract foreign investors.
So yes, foreigners can own property in Indonesia, but the process comes with specific conditions and legal considerations. In this guide, we outline the essential things you need to know before taking the first step toward owning a property in Indonesia
Types of Property Ownership Available for Foreigners in Indonesia
According to Indonesian Agrarian Law, foreigners are prohibited from owning freehold property (Hak Milik), ensuring land ownership remains exclusive to Indonesian citizens. However, foreigners can lease property for up to 30 years, with an option to extend for another 20 years. They are also allowed to own condominium units, provided that at least 51% of the building is owned by Indonesian citizens or entities, maintaining national interests and majority control.
There are several ways foreigners can acquire property rights in Indonesia, including:
- Hak Pakai (Right to Use): Grants foreigners the right to use and occupy property for up to 30 years and is extendable for an additional of 20 years.
- Hak Sewa (Right to Lease): Allows foreigners to lease property for an agreed period, often up to 30 years, with possible renewal options.
- PT PMA (Foreign-Owned Company): Enables foreigners to own property under Building Use Rights (Hak Guna Bangunan or HGB) through a foreign-invested company.
It’s also important to note that nominee practice, where a foreigner uses an Indonesian citizen’s name to acquire property, is illegal under Indonesian law due to the significant legal risks involved.
Seven Stones Indonesia strictly avoids offering such services to ensure compliance and protect clients from potential legal complications.
The Benefits of Buying Property in Indonesia/Bali
Investing in property in Indonesia, particularly in Bali, offers numerous advantages for foreigners. Bali’s thriving tourism industry ensures strong rental demand, making it an attractive market for consistent income and property appreciation.
The island’s strong rental market provides excellent opportunities for generating consistent income, especially from tourism-driven demand. Additionally, Indonesia allows flexible ownership terms, such as leaseholds that can span up to 50-70 years when renewals are included.
This long-term security makes property a reliable investment, whether for personal use or as a lucrative rental. Moreover, Bali’s increasing popularity as a global destination ensures steady appreciation in property value over time, making it a strategic choice for foreign investors seeking both profitability and stability.
Housing Financing Options for Foreigners in Indonesia
Indonesian banks now offer housing loans (KPR) specifically tailored for foreign nationals. Many Indonesian banks, like Bank Permata Syariah, Commonwealth Bank, and J-Trust Bank, offer KPR programs for foreigners, provided they meet certain conditions.
These typically include holding a valid KITAS (temporary stay permit), having stable employment or business operations in Indonesia, and ensuring the property meets eligibility criteria, such as being under a Hak Pakai (Right to Use) or Hak Guna Bangunan (HGB) title.
The structure of these financing options varies slightly between banks. For instance, tenures can range from 3 to 30 years, with loan amounts dependent on income and property value. Banks may require minimum monthly earnings, such as IDR 25 million, and limit loan-to-value (LTV) ratios to 60-70%.
Foreigners are also required to ensure the property adheres to the regional minimum price thresholds. By meeting these requirements and partnering with the right bank, foreigners can realize their dream of owning property in Indonesia.
Take the First Step Toward Owning Property in Indonesia
Owning property in Indonesia is a realistic goal for many foreigners, but navigating the process requires careful planning and expert advice. Start by researching the specific regulations and ensuring your eligibility.
Consult with legal and real estate professionals to guide you through each step of the journey. Whether you’re investing for rental income or seeking a long-term residence, having the right support can make all the difference.
Ready to take action? Contact experienced consultants like Seven Stones Indonesia to help you make informed decisions. Book a free 30-minute consultation with us now and begin your journey to owning property in Indonesia today.
Source: rumah123.com
Image: Shisuka (Canva)