The legal framework governing foreign residential property ownership in Indonesia underwent a significant transformation with the enactment of Law No. 11 of 2020 on Job Creation, which was subsequently replaced by Law No. 6 of 2023 (the “Omnibus Law”). This legislation, along with its primary implementing regulation, Government Regulation (PP) No. 18 of 2021, expanded the rights of foreign nationals to acquire residential real estate. Previously regulated under PP No. 103 of 2015, foreign ownership was largely restricted to Hak Pakai (Right to Use). The current regime permits broader access to apartment units and simplifies the administrative requirements for eligibility.

Eligibility and Administrative Requirements

Under Article 69 of PP No. 18 of 2021, the eligibility criteria for foreign individuals are defined as follows:

“Warga Negara Asing yang dapat memiliki rumah tempat tinggal atau hunian adalah Warga Negara Asing yang memiliki dokumen keimigrasian sesuai dengan ketentuan peraturan perundang-undangan.” (Foreign Citizens who can own residential houses or dwellings are Foreign Citizens who possess immigration documents in accordance with the provisions of laws and regulations.)

While prior regulations required the possession of a Limited Stay Permit (KITAS) or a Permanent Stay Permit (KITAP) to purchase property, the current interpretation by the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN) permits ownership based on a valid visa or passport, provided the property is used for residential purposes. This is further clarified in Minister of ATR/BPN Regulation No. 18 of 2021, which outlines the technical procedures for land right applications by foreign nationals.

Permitted Property Types and Titles

Foreigners are restricted to specific types of residential properties and legal titles. They cannot hold Hak Milik (Right of Ownership), which is reserved for Indonesian citizens.

1. Landed Houses (Rumah Tapak) Foreigners may only acquire landed houses under the Hak Pakai (Right to Use) title. According to Article 70 of PP No. 18/2021, these houses must be categorized as “Luxury Houses” (Rumah Mewah) in accordance with statutory standards. Ownership is generally limited to one land plot per person/family, with a maximum area of 2,000 square meters. Extensions beyond this limit require specific ministerial approval if the property provides a significant economic impact.

2. Apartment Units (Sarusun) The Omnibus Law introduced a critical shift regarding Hak Milik atas Satuan Rumah Susun (HMSRS), or the Right of Ownership over Stacked Settlement Units. Article 67 of Law No. 6 of 2023 allows foreigners to hold HMSRS titles in specifically designated areas. Foreigners may own apartment units built upon:

  • Hak Pakai (Right to Use)
  • Hak Guna Bangunan (HGB - Right to Build)

This represents a departure from the previous regime, where foreigners were strictly limited to apartments built on Hak Pakai land. This change aligns the ownership rights of foreigners in “Special Economic Zones” (KEK), “Free Trade Zones,” and “Industrial Estates” with broader national economic objectives.

Minimum Price Thresholds

To prevent the displacement of local buyers in the mid-to-low-tier housing markets, the Indonesian government imposes strict minimum price thresholds for foreign acquisitions. These thresholds are updated periodically. The current rates are established under Decree of the Minister of ATR/BPN No. 1241/SK-HK.02/IX/2022:

Minimum Price for Landed Houses (Rumah Tapak):

  • DKI Jakarta: IDR 5,000,000,000
  • Banten: IDR 5,000,000,000
  • West Java: IDR 5,000,000,000
  • Central Java: IDR 3,000,000,000
  • East Java: IDR 5,000,000,000
  • DIY Yogyakarta: IDR 5,000,000,000
  • Bali: IDR 5,000,000,000
  • West Nusa Tenggara: IDR 3,000,000,000
  • North Sumatra: IDR 3,000,000,000
  • East Kalimantan: IDR 2,000,000,000
  • South Sulawesi: IDR 2,000,000,000
  • Other Provinces: IDR 1,000,000,000

Minimum Price for Apartment Units (Sarusun):

  • DKI Jakarta: IDR 3,000,000,000
  • Banten: IDR 2,000,000,000
  • West Java: IDR 1,000,000,000
  • Central Java: IDR 1,000,000,000
  • East Java: IDR 1,500,000,000
  • Bali: IDR 2,000,000,000
  • Other Provinces: IDR 750,000,000

Duration of Rights

The duration of ownership for foreigners follows the standard terms for Hak Pakai and HGB as stipulated in PP No. 18 of 2021:

  • Initial Term: Up to 30 years.
  • Extension: Up to 20 years.
  • Renewal: Up to 30 years. Total potential duration reaches 80 years. Applications for extension and renewal must be submitted to the local Land Office (Kantor Pertanahan) before the current term expires.

Transfer and Inheritance

Foreign-owned property is subject to strict divestment rules if the owner’s legal status changes. Article 72 of PP No. 18 of 2021 mandates:

“Dalam hal Warga Negara Asing atau Badan Hukum Asing yang memiliki rumah tempat tinggal atau hunian … tidak lagi memenuhi syarat … dalam jangka waktu 1 (satu) tahun wajib melepaskan atau mengalihkan hak atas tanah atau Hak Milik atas Satuan Rumah Susun kepada pihak lain yang memenuhi syarat.” (In the event that a Foreign Citizen or Foreign Legal Entity owning a residence … no longer meets the requirements … within a period of 1 (one) year, they are obliged to release or transfer the land rights or Right of Ownership of the Apartment Unit to another party who meets the requirements.)

If the property is not transferred within the one-year grace period, the state may auction the property to settle the rights. In cases of inheritance, if the heir is a foreign national, they may retain the property provided they possess the requisite immigration documents and the property meets the “Luxury House” or minimum price criteria. If the heir does not meet these criteria, the one-year divestment rule applies.

Restrictions on Indirect Ownership

Indonesian law strictly prohibits “nominee” arrangements, where a foreign national uses an Indonesian citizen’s name to acquire Hak Milik (Right of Ownership). Article 33 of Law No. 25 of 2007 on Investment explicitly forbids such agreements, rendering them legally void. Consequently, foreign residential ownership must be conducted through the direct legal pathways of Hak Pakai or HMSRS as provided by the Omnibus Law framework to ensure legal certainty and protection under the National Land Agency (BPN) registration system.

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