Indonesian Law | Hukum Indonesia - Blog: February 2016

Tuesday, February 9, 2016

New Regulation: Individual Foreigners Can Purchase Landed House in Indonesia

The Indonesian Government issued Government Regulation No. 103 of 2015 on House Ownership of Foreigners Residing in Indonesia (the “GR103“) which came into force on December 28, 2015. 

The GR103 means that expats can now buy either a landed house or an apartment in Indonesia under certain requirements and conditions.

Key Points

Important points in GR103 are as follows:
  • Foreigners who hold a legal stay permit (diplomatic stay permit, official stay permit, residence stay permit, limited stay permit or permanent stay permit) who give benefit, conduct business, work or invest in Indonesia, may own landed house/apartment unit in Indonesia. 
  • The foreigner will own the house under the so-called ‘right of use’ category (in Indonesian: hak pakai). Please note that the right of use is not a freehold title. 
  • The foreigner can buy and own the house under right of use (hak pakai) for an initial period of 30 years. The right of use (hak pakai) can be extended for an additional 20 years and further renewed for 30 years (therefore ownership can reach a total of 80 years). 
  • Houses/Apartments owned by a foreigner in Indonesia may be passed by virtue of inheritance. However, if the heir is a foreigner, such heir must also have a legal stay permit in Indonesia. 
  • If the foreigner leaves Indonesia to reside in another country, then the foreigner must sell their houses/apartments to a qualifying person within a year after departing from Indonesia. 
  • Indonesian citizens marrying foreigners can own title over land as long as the title to the land is not part of the joint marital property. This must be evidenced by a prenuptial agreement in a form of notary deed. 
  • Further provisions concerning the procedures for granting, releasing, or transferring the ownership of a house or residence by a foreigner will be further stipulated in regulations to be issued by the National Land Authority.

By: tnrlawfirm