How to buy property in Indonesia: a detailed guide

This region is a prime attraction for overseas estate consumers due to its picturesque views, rich heritage, and friendly atmosphere. In contrast,  purchasing for householding abroad can be challenging, regarding local lawful demands.

This short article is designed to assist the quest for overseas purchasers by providing transparent and pivotal information about property for sale in Indonesia. Our goal is to make the deterrents of obtaining householding in this part of the world more accessible and comprehensible.

Is it possible for non-residents to invest and own property in the Indonesian region?

Overseas purchasers desiring to obtain property in this region face specific protocols. They cannot acquire land outright but can lease it for up to 25 years with possible extensions. During this lease, they cannot exploit the property for profit.

Alternatively, individuals who desire to buy house holdings can obtain the Right to Use (Hak Pakai) for up to 25 years, which offers more security than a lease but still doesn’t confer full possession .

While nationality typically doesn’t affect the process, bilateral agreements may offer different options. Residency isn’t required, but a long-term visa or work permit can facilitate the process. Tourist visas are not sufficient.

No special regulatory approval is needed for leasing or Hak Pakai arrangements, but local administrative confirmation is required. There is no minimum asset requirement for obtaining belongings.

Securing Indonesian Residency Through Investment and Property Ownership

This region does not have a straight residency-by-investment program tied to holdings purchases, so buying property there does not automatically grant residency.

However, there are other pathways to residency. Common options include work visas, retirement visas, and family reunification visas. Each comes with specific demands and benefits.

For retirees, this region offers a retirement visa for individuals usually over 55. Applicants must meet financial aspects, including a minimum pension income. While proprietorship is not required, having a lease can support your application.

Work visas are available if you secure employment with an Indonesian company, with your employer sponsoring the visa. This allows short-term  residence tied to your job.

Long-term residency in this region requires a long period of continuous fleeting residency and is not granted solely based on estate investment.

Citizenship is a separate, more intricate procedure requiring language proficiency, continuous residence, and cultural integration. Permanent residency does not automatically lead to citizenship.

Economic gauges

Our document pack provides fresh, updated data on Indonesia’s real estate market. Over the past five years, Indonesia’s GDP per capita has risen by 8.9%, indicating increased wealth and likely boosting real estate demand and prices.

According to Numbeo, rental properties in this region yield gross returns of 3.0% to 5.7%. While not highly profitable, these moderate yields offer stability and a consistent income.

Embracing Life in Indonesia: A Rewarding Expat Experience

Living in Indonesia as an expat offers a fulfilling adventure with its rich cultural heritage, inviting atmosphere, and diverse attractions. From gorgeous beaches and lush views to radiant cities, Indonesia presents a unique lifestyle for those seeking a change. The low cost of living, coupled with excellent healthcare and education systems, makes it a compelling choice for families. Additionally, the country’s burgeoning economy provides ample job opportunities. Safety is generally good, with a low crime rate and a commitment to security. Overall, this region stands out as an exceptional direction for expats looking for a new life outside their states.

Top Locations for Investment in immovable property in Indonesia (information is current for a beginning of 2024)

Is a lawyer required for purchasing property in Indonesia?

Yes, hiring a lawyer who specialises in regional laws is pivotal for getting any kind of belongings in this region. They help with critical tasks such as drafting the Purchase Agreement (Perjanjian Jual Beli), approving property rights land and proprietorship (Verifikasi Sertifikat Tanah), and securing necessary permits. They guarantee adherence with charge burdens and regional laws, making the operations smoother and more secure.

Risks of Obtaining Estate in Indonesia

Buying immovables in this part of the region involves several risks primarily tied to its complex legal system. Ensuring proper registration and accurate legal documents is crucial. Hidden fees, such as the claim of first refusal (Hak Guna Bangunan), may arise. Additionally, disputes with local authorities over land ownership can occur, and environmental issues like flooding or landslides may not be immediately apparent.

Essential Documents for Estate Operations in Indonesia

1. Copies of KTP (Identity Cards) for both Buyer and Seller.
2. Copies of NPWP (Tax Identification Numbers) for both Buyer and Seller.
3. The Akta Jual Beli (Deed of Sale and Purchase) from the Notary.
4. For company buyers, copies of Akta Pendirian Perusahaan (Company Establishment Deed) and Akta Perubahan (Amendment Deed).
5. The Sertifikat Hak Milik (Certificate of Ownership) for the property.
6. The PBB (Property Tax Certificate) for the property.
7. The IMB (Building Permit) for the property.
8. The KTP (Identity Card) of the Seller’s spouse, if relevant, and Akta Nikah (Marriage Certificate) for joint proprietorship.

Effective Negotiation Strategies with Indonesians

To carry on negotiations concerning belongings in Indonesia smoothly, consider these culturally aligned tips:

1. Establish Confidence: build personal connections by showing genuine interest in the seller’s background and experiences. Trust is key to successful negotiations.

2. Show Respect: Maintain a courteous and respectful demeanour. Avoid aggressive or confrontational behaviour to foster a positive negotiation environment.
3. Leverage Connections: Use your network to find introductions or connections that can help you build rapport with the seller, making negotiations smoother.
4. Research Thoroughly: Understand local market aspects and belonging values to show you are a serious buyer and to support your negotiation position.
5. Embrace Bargaining: Engage in the negotiation process with patience and flexibility, starting with a reasonable offer and expecting counteroffers.
6. Seek Win-Win Solutions: Aim for mutually beneficial outcomes to create harmony and increase the likelihood of reaching an agreement.
7. Prioritise Face-to-Face Meetings: In-person discussions are valued, allowing for better communication and understanding through non-verbal cues.
8. Consult an Expert in this region: Work with a lawyer specialising to guide the legal nuances of operations concerning property in this region, ensuring your interests are well-protected.

Can non-residents Obtain a Bank Loan in Indonesia?

Yes, non-residents can be a proprietor of loans in this part of the region, though eligibility and requirements vary by lender. Typically, you’ll need a valid allowance for residence. Banks like Bank Mandiri, Bank Central Asia (BCA), and Bank Negara Indonesia (BNI) suggest mortgages to expand. Mortgage rates range from 8% to 12% for a 20-year term, which are relatively high but competitive in comparison with other countries.

Key Charges on Property Operations in Indonesia

Operations Concerning Immovables Levies in Indonesia