In Indonesia, Can Foreigners Own Property

Foreigners' Rights to Own Property in Indonesia Have Changed.

On November 1, 2022, the Directorate General for Rights Determination and Land Registration released HR.01/1963/XI/2022 in Jakarta. The decree includes directions for executing the decree of the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency 1241/SK-HK.02/IX/2022 on foreigner purchase and residential home pricing.

As a legislative framework for investment, the government earlier approved Law No. 11 of 2020 on Job Creation. One aspect of this law concerns foreigners and their capacity to obtain property in Indonesia.

It is mentioned that the presence of foreigners improves the country by allowing them to do business, work, or invest. This is intended to boost investment, which would then assist the country's economy to develop. Furthermore, easier access to property for foreigners is projected to increase tourism and industry, hence creating job prospects in the neighborhood.

The Ministry has developed and published a number of rules to make it easier for foreigners to purchase property in Indonesia. Foreigners can own flats developed on land with the HGB or Hak Pakai status. Articles 144 and 145 of Law No. 11 of 2020 on Job Creation specify this.

According to article 69 of Government Regulation number 18 of 2021 on management rights, land rights, apartment units, and land registration, the criteria for foreigners to own a property as a place of living or occupation are simplified by holding a valid passport, visa, or 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.

More than one piece of land may be given for landed residences that have a good influence on the economy and society, or for an area more than 2,000 m2 with the Minister's authorization. Landed dwellings include the following:

• 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 homes of residence or occupancy obtained by foreigners previous to the entrance into force of Decree Number 1241/SK/HK.02/IX/2022, the price of houses of residence will follow requirements prior to the entry into force of this Decree," the rule concluded.

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