Now Foreigners Can Buy Property in Indonesia

Now Foreigners Can Buy Property in Indonesia. President Joko Widodo (Jokowi) has issued a Government Regulation Number 18 of 2021 concerning Management Rights, Land Rights, Unit Apartments, and Land Registration. This rule is a derivative of Article 142 and Article 182 letter b of Law Number 11 of 2020 concerning job creation or known as the Omnibus Law.

The regulation states that foreigners or foreign citizens (WNA) can own flats or apartments in Indonesia. It is written in the Article 67 of the Act in question that Property rights to apartment units are granted to Indonesian citizens (WNI); Indonesian legal entity; a foreigner who has a permit in accordance with the provisions of the regulation; foreign legal entities that have representatives in Indonesia; or representatives of foreign countries and international institutions residing or having representatives in Indonesia.

However, not all foreigners can freely own an apartment as referred to in Article 69 of the Act in question. It is only for foreigners who have an official immigration permit who can have a residence.

The regulations for foreigners who are allowed to own apartments in Indonesia are said to have an impact on the property industry. As in reported from the Indonesia Expat page, last Tuesday (12/28/2021), Deputy Chairperson of Real Estate Indonesia (REI), Bambang Eka Wijaya said the apartment ownership policy could encourage the growth of the property sector, especially in the middle-upper apartment segment with a value of more than IDR 5 billion.

According to him, the demand for housing for the upper middle class tends to be sluggish, due to the high price where the sales contribution of this middle-class housing should be enormous to the growth of the property sector.

Bambang continues informing that now-days the sales of the middle-class house segment have stopped. In fact, in the percentage terms, the number of units may be little, but the value is huge. If we could imagine, one foreign transaction is equal to 10 to 20 lower-middle property units.

Although the maximum unit is only about 2 percent, the value can exceed 20 percent. Therefore, REI agreed that the purchase of apartments by foreigners must be limited in price. Besides aiming to encourage property growth, it is also necessary to maintain housing in the lower-middle segment that can be purchased by the Indonesian citizens.

The omnibus law regulation from the government also e clarifies that foreigners who can own housing are foreigners who have immigration documents in accordance with statutory provisions with the status of usage rights. Foreigners cannot buy housing in Indonesia without restrictions, there are several restrictions applied such as prices, plot area, to the number of units under construction.