One of the provision stated in Law No. 11 of 2020 dated November 2, 2020 dated November 2, 2020 on Job Creation ("Job Creation Law") is the facilitation of property acquisition for foreign nationals in Indonesia. In essence, Article 144 of the Job Creation Law allows foreign nationals to have ownership rights (hak milik) over condominium units (satuan rumah susun), upon the fulfillment of certain conditions.
To implement the above provisions, the government has issued series of derivative regulations, namely Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency ("ATR/BPN") Regulation No. 18 of 2021 dated October 27, 2021 on Guidelines for the Determination of Right to Manage and Land Rights, which is recently further implemented by ATR/BPN Decree No. 1241/SK-HK.02/IX/2022 dated September 12, 2022 on Procurement and Price of Residential Houses for Foreign Nationals ("ATR/BPN Decree No. 1241") and also ATR/BPN Circular Letter No. HR.01/1963/XI/2022 dated November 1, 2022 on Implementing Guidelines for ATR BPN Decree 1241 ("ATR/BPN CL No. HR.01").
Please see the following for an overview of the relevant provisions of the above regulations.
Types of Property Foreign Nationals Are Able to Own
Point 1 of ATR/BPN Decree No. 1241 stipulates that foreign nationals may own residential houses based on either new or old houses/units. The type of property that foreign nationals may own, the type of land the property is on and the right/title they may hold over the property can be seen in the following table.
Rights and Requirements
Previously foreign nationals must have either a permanent or temporary stay permit in order to acquire property. However, now they may now do so based on a visa, passport or stay permit. The properties owned by foreign nationals may also be inherited to a valid heir, collateralized as a loan security and be transferred to other parties.
Furthermore, there is also a minimum price requirement for the landed houses/condominium units that may be owned by foreign nationals. These minimum prices vary by province, with DKI Jakarta, Banten, Bali and several other provinces having a minimum price Rp5,000,000,000 (five billion Rupiah) for landed houses and Rp 3,000,000,000 (three billion Rupiah) for condominium units.
Ownership Limitations
Despite the above, ATR/BPN CL No. HR.01 does impose certain restrictions over the ownership of property by foreign nationals.
For landed houses, foreign nationals are subjected to the following restrictions:
- houses that may be owned are only those categorized as luxury houses in accordance with existing regulations;
- each person/family is only allowed for 1 (one) plot of land; and/or
- the maximum area of the land is 2,000m2 (two thousand meters square).
If there are positive economic impacts to be had from the ownership of landed houses by foreign nationals, such person may be given more than 1 (one) plot of land or exceed the 2,000m2 (two thousand meters square) area, subject to the Minister approval. Currently, there are no further guidelines on the parameters of this exemption.
For condominium units, foreign nationals may only own commercial condominium units.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
