Foreigners Only Need a Passport to Buy a House in Indonesia, Says Government

Indonesia, renowned for its breathtaking natural beauty, rich cultural heritage, and diverse landscapes, has always held a special place in the hearts of global travelers and property enthusiasts.

Indonesia, renowned for its breathtaking natural beauty, rich cultural heritage, and diverse landscapes, has always held a special place in the hearts of global travelers and property enthusiasts. Owning a piece of this Southeast Asian paradise has long been a cherished dream. However, for many years, navigating the intricate process of foreign property ownership deterred even the most enthusiastic investors looking to buy house in Indonesia.

The labyrinthine bureaucratic hurdles, particularly the requirement to secure long-stay and permanent stay permits, known as Kitas and Kitap, made it a daunting endeavor. But now, a significant shift in Indonesian property laws, where foreigners only need a passport to buy a house in Indonesia, has turned the tide, making it considerably easier for foreigners to acquire houses and residential units in this picturesque archipelago.

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The Transformation of Foreign Property Ownership

In a remarkable twist, Indonesia now embraces a straightforward approach, allowing international property investors to buy house in Indonesia with just a passport, visa, or residence permit. The once-tedious paperwork and bureaucratic complexities have been remarkably streamlined, making the process effortless for foreign investors. This monumental shift was formalized through a 2021 government regulation on land rights, demonstrating Indonesia's unwavering dedication to attracting foreign investments into its thriving real estate market.

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During a recent forum in Jakarta, Suyus Windayana, the secretary-general at the Spatial Planning Ministry, provided valuable insights into this transformative development. "We used to require foreigners to present their Kitas and Kitap permits before they could buy a house. However, the new regulations stipulate that a passport or visa is all that's needed for foreign property ownership. We will issue their Kitas/Kitap permits after they successfully purchase a property," he explained.

The Nominee Conundrum

Despite the simplified regulations, it's important to note that many foreigners still opt to purchase property through nominees. This practice involves enlisting a local individual to buy property on behalf of the foreign investor. Locations like Bali, a renowned tourist hotspot, often witness a surge in these nominee schemes. However, this approach has raised concerns about transparency and monitoring of foreign property ownership, as it can create complications when tracking property transactions.

The Current Landscape of Foreign Ownership

Foreign property purchases in Indonesia have been observed across 13 provinces, with Jakarta, Bali, and Batam emerging as preferred destinations. Nevertheless, the number of foreign homeowners remains astonishingly low. Suyus Windayana revealed, "Despite the regulatory changes, we have observed that less than 200 foreigners have bought property without using a nominee during the specified period. In 2023, we have recorded only 36 registered foreign homeowners."

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This relatively low turnout of foreign homeownership can be attributed to technical issues encountered on the ground. Suyus added, "It is possible that the system still prompts foreigners to provide their Kitas or Kitap permits, despite the recent policy changes."

The Spectrum of Housing Options

Indonesia offers two primary options for foreign nationals interested in purchasing property: luxury landed houses and commercial flats. While the government has eased regulations, there are still specific criteria to fulfill. The minimum purchase price varies depending on the location and type of housing.

  • To be eligible for foreign ownership, luxury landed houses in Jakarta must have a minimum value of Rp 5 billion ($329,190).
  • Foreigners interested in buying an apartment unit in Jakarta must make a minimum investment of Rp 3 billion.
  • Concerning landed houses, an individual or family is allowed ownership of only one plot of land, and the land area should not exceed 2,000 square meters.

Suyus Windayana elaborated, "In exceptional cases, the land area may exceed 2,000 square meters, but the foreign investor must demonstrate that the expansion will have a positive economic impact. Approval for such cases rests with the spatial planning minister."

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Jakarta, Indonesia

Indonesia's recent policy changes have ushered in a new era of opportunities for foreigners seeking property ownership in this enchanting country. With simplified regulations and reduced bureaucracy, the process of purchasing real estate has become more accessible and enticing than ever before. As the Indonesian government continues to fine-tune its policies to attract foreign investment, it is expected that more international investors will be lured to make this tropical paradise their second home.

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