Expat Guide to Owning Property in Indonesia

Has the time to invest in real estate arrived? Perhaps it’s actually time for you to settle down in Indonesia?

Expats are increasingly exploring property ownership in Indonesia, guided by a regulatory framework that strikes a balance between opportunity and legal safeguards.

So, yes, expats can purchase property in Indonesia—but there are important conditions to meet. The system is structured and transparent, ensuring that buyers navigate a secure, legally compliant path to ownership. Nonetheless, it’s straightforward for those with the right residency and guidance.

Foreign buyers may acquire property under the Right of Use (Hak Pakai) title, rather than full freehold ownership.

This option is available exclusively for luxury landed houses and apartments, and can be extended up to 80 years through renewals. Hak Pakai may also be passed down to heirs in accordance with applicable regulations.

Key requirements

1. Eligible property types

Expats may purchase:

- Landed houses: Luxury homes, limited to one property per individual or family, with a maximum land area of 2,000 square metres
- Apartments: Commercially classified strata-title developments

2. Compliance with the Right of Use duration

The Hak Pakai title is subject to strict temporal limits, where cumulatively, foreign ownership under Hak Pakai may last up to 80 years:

- Initial term: 30 years
- First extension: 20 years
- Second renewal: 30 years

3. Minimum purchase price

To maintain market balance and protect local buyers, properties available to expats are subject to minimum price thresholds, which vary by region:

Apartments:

- Jakarta: Rp3 billion
- West Java, Banten, East Java, Yogyakarta, and Bali: Rp2 billion
- Other provinces: Rp1 billion

Landed houses:

- Jakarta, West Java, Banten, East Java, Yogyakarta, and Bali: Rp5 billion
- North Sumatra, South Sulawesi, and East Kalimantan: Rp2 billion
- West Nusa Tenggara: Rp3 billion
- Other provinces: Rp1 billion

4. Valid KITAS (Limited Stay Permit)

Ownership is contingent upon holding a KITAS, issued by the Ministry of Law and Human Rights. This permit, generally valid for two years and renewable, establishes a legal basis for residence and property acquisition.

How the process works

Acquiring property is straightforward when approached methodically:

1. Sign a Binding Sale and Purchase Agreement (PPJB)
2. Register the transfer at the local land office
3. Execute the Deed of Sale and Purchase (AJB)
4. Pay the Land and Building Acquisition Duty (BPHTB)
5. Open a local bank account for taxes and transactions
5. Receive the Right of Use certificate

Can an Indonesian citizen married to an expat still buy property in Indonesia?

Property ownership in Indonesia raises important questions for mixed-marriage couples. The answer is yes—but with careful planning. Ownership rights for an Indonesian spouse depend heavily on whether a marital property separation agreement exists, either before or after the wedding.

Scenario 1: With a property separation agreement

If an Indonesian spouse has a pre- or post-nuptial separation agreement, they can purchase property and apply for a mortgage in their own name. The property remains fully under the Indonesian spouse’s ownership, with no legal claim from the foreign partner.

This agreement ensures that marital assets remain separate, preserving the Indonesian spouse’s full ownership rights. Even if the foreign spouse contributes financially, the property title remains legally protected under the Indonesian partner’s name.

Scenario 2: Without a property separation agreement

Without one, property purchased after marriage is automatically considered joint marital property. For Indonesian spouses, this presents significant challenges:

- Foreign partners cannot legally hold a Sertifikat Hak Milik (SHM), the freehold land title in Indonesia.

- Without a formal separation agreement, the property may be considered partially owned by the foreign spouse, potentially violating Indonesian property law.

- Mortgages (KPR) and property transactions become more complex, as banks and authorities must navigate shared ownership with a foreign national.

In these cases, a post-nuptial property separation agreement becomes essential. It legally separates assets, protects the Indonesian spouse’s rights, and ensures compliance with Indonesian regulations.

Risks of not having a separation agreement

Without a prenup or postnup causes:

- Indonesian spouses cannot acquire freehold property if the foreign spouse is legally considered a co-owner. Therefore, ensure the property is registered in the Indonesian spouse’s name and categorised as personal property, not marital property.

- The government may require the property to be reallocated or surrendered if ownership violates legal provisions, putting the Indonesian spouse at risk of losing their investment.

While a mortgage is ongoing, consult a notary to create a postnup or adjust ownership arrangements. Either way, seek professional guidance to navigate complex regulations, ensuring both compliance and protection of ownership rights.