Owning a Property in Indonesia

Owning a property in Indonesia can be beneficial for foreigners who are working in the country. In general, there are two ways a foreign national can own property; through purchase or rental. According to a local newspaper, Kompas, there are several regulations on foreign property ownership. One of the prominent regulations is the minimum price of housing property for foreign nationals. 

Foreign nationals who can pay the minimum price can utilize the property as an asset, accommodation, or housing. It is also important to note that foreigners can only purchase or rent a property if the individual or the company has a staying permit or representative in Indonesia. In the case of an individual, they must have a staying permit in the country. As for a company, they need to have an official representative in Indonesia.

Owning a property in Indonesia for Foreigners

Owning a property in Indonesia is possible for foreigners. However, unlike Indonesian nationals who can have an ownership permit over a land, foreign nationals are only permitted to use the land. The difference between the two permits is the usage period. The ownership permit has no expiry date. On the other hand, the usage permit has a limited usage period. However, in terms of usage of the property, it is roughly the same. Foreign nationals can build and alter the property they purchase. 

The initial usage period is usually 25 years. After that, should the foreign national wish to continue using it, they can extend the permit for another 20 years. Should they still wish to use the property after the second period, then another extension is due. The third period is for another 25 years. In total, a foreigner can use the property for 70 years. 

It is important to note that even for Indonesian nationals, not all properties are available for ownership permits. Certain areas are only available to use. For instance, the government classifies the land next to rail tracks or canals as properties to use. Thus, if it is within the government’s interest to utilize the area, then when the first usage period expires they will not approve the permit extension. 

In case, if a foreign national who owns the property permit passed away due to untimely death, the property can be inherited by their designated heir. However, said heir must have a stay permit in Indonesia. If the appointed heir does not have a stay permit then the inheritance would be obsolete. 

Alternatives to Properties

As many foreign entrepreneurs may be aware, in Indonesia it is much easier to hire an Indonesian national as the director of their company. In that case, housing properties will not be an issue. However, if the company hire a foreign national, then said individual needs an appropriate housing property. Most of the time, foreign nationals choose apartments for their proximity to work and easier maintenance. 

Another reason for foreign nationals to think of owning a property is for office use. However, owning a property in an office building is a gamble in itself. Thus, for a safer and more economical alternative, it is worth checking business address rental (virtual office) or a fully furnished and serviced office suite (serviced office). Through renting either of these services, foreign entrepreneurs are free from the troubles of fixed assets and office setups. 

In addition, some may also choose to acquire properties for investment reasons. For instance, purchasing land for plantation purposes. In this case, the same permit applies to the foreign national. They can either buy the land and earn the permit of usage, or they can rent the land. 

For more information on company establishment,  business address rental (virtual office), and a fully furnished and serviced office rental (serviced office), visit www.meso.co.id. We are also available on our Live Chat at +62812 1315 4189 (Whatsapp).