What investors should know when buying property in Indonesia

What investors should know when buying property in Indonesia

Indonesia stands as an appealing destination for foreigners seeking to invest in property. With its stunning natural beauty, well-developed infrastructure and relatively straightforward property purchase process, the country has gained popularity among expatriates and real estate investors alike. How easy is it to buy property here? In this article, we will explore the requirements for foreign investors and the specifics of dealing with local real estate.


Types of property in Indonesia

Three main types of property rights in the country are defined by Law No. 5 of 1960:

  1. Hak Pakai: This is a flexible lease that allows for long-term use of the property. The initial term is 30 years, with the option to extend for 20 years and then another 30 years, providing a total ownership period of 80 years.
  2. Hak Guna Bangunan: This title grants foreign legal entities ownership rights over land, enabling them to conduct business and generate income. The term for this title is also 80 years.
  3. Hak Milik: This title allows indefinite ownership of real estate and the ability to transfer it to others through sale or inheritance. However, this type of ownership is exclusively available to Indonesian citizens or foreign investors with the necessary permits.

General procedure for buying property in Indonesia

First and foremost, conducting a thorough inspection of the selected property is crucial to ensure its legal clarity and absence of encumbrances. Typically, this responsibility falls on the real estate agent. Other essential steps include:

  • Drafting a CSPA (Conditional Sales and Purchase Agreement) to be signed by the parties involved. In certain cases, a deposit may be required.
  • Signing the Final Purchase and Sale Agreement, formalised in the presence of the Pejabat Pembuat Akta Tanah, a designated official responsible for land rights.
  • Settling the balance, usually done immediately after signing the agreement. The method of payment will be agreed upon based on the specified terms and conditions.
  • Registering the title. Within seven days of signing all documents, a certificate of transfer of the long-term lease and related documents are prepared. Although the transaction can be conducted remotely, you may need to grant power of attorney to a lawyer.

The following information is required from the seller:

  • A copy of the Kartu Tanda Penduduk (identity card). If the seller is married, the spouse's KTP is also necessary. In the absence of a prenuptial agreement, the spouse may need to sign the sale agreement or the transaction could be deemed illegal.
  • Family Card (Kartu Keluarga). This document certifies the family status of the seller.
  • Marriage certificate (original), if applicable.
  • Original Land Ownership Certificate confirming the seller's right to the property.
  • Tax Payment Certificate as proof of property tax payment.
  • NPWP (Taxpayer Identification Number): This number, assigned to the seller, is used for tax-related transactions.


As a buyer, you must provide the following documents and information for a valid real estate transaction in Indonesia:

  • A copy of your Kartu Tanda Penduduk and your spouse's card if you are married;
  • Family Card (Kartu Keluarga) along with your registration number;
  • Marriage certificate;
  • NPWP (Taxpayer Identification Number).

Price restrictions for Indonesian regions

The law stipulates that foreigners can only purchase property in Jakarta for a minimum price of 10 billion Indonesian rupiah for houses and 5 billion Indonesian rupiah for apartments (approximately USD 640,000 and USD 320,000, respectively). For other regions, the required amount varies, ranging from 1 to 5 billion Indonesian Rupiah for houses and from 750 million to 2 billion Indonesian Rupiah for apartments (approximately USD 64,000 – USD 320,000 and USD 48,000 – USD 128,000, respectively). For instance, in Banten, you can buy a house starting from USD 320,000 and an apartment from USD 128,000. The price thresholds for other regions are as follows:

  • West Java and Jakarta: Houses from USD 320,000, apartments from USD 64,000
  • Central Java: Houses from USD 192,000, apartments from USD 64,000
  • East Java: Houses from USD 320,000, apartments from USD 96,000
  • Bali: Houses from USD 320,000, apartments from USD 128,000
  • West Nusa Tenggara: Houses and apartments from USD 192,000
  • North Sumatra: Houses from USD 192,000, apartments from USD 64,000
  • East Kalimantan: Houses from USD 128,000, apartments from USD64,000
  • South Sulawesi: Houses from USD 128,000, apartments from USD 64,000

In terms of additional costs, it's worth considering a 5% property transfer tax, applicable to both the buyer and the seller. Other costs to be borne by the buyer include:

  • Land transfer tax: 1%
  • Lawyer's fees: 0.5-1.5%
  • Registration fee: 0.2%
  • Agency commission: 5%
  • Notary services: 1%

Utility bills typically average USD 57 per month, with an additional USD 27 for Internet expenses. It's also worth noting the possibility of obtaining a mortgage to buy property. Foreigners have the right to take out a mortgage from a local bank and the current interest rate for a 20-year loan stands at 9.53%.

Let us help you buy property in Indonesia!

We’ve provided essential information to help you navigate the real estate buying process. Your choice of region will depend on your preferences and budget. The capital, Jakarta and Bali are the most sought-after locations for luxury real estate purchases. However, options to suit your budget and requirements can be found throughout the country. Our website serves as a real estate aggregator with listings from leading developers and verified agencies. Filters allow you to sort listings by price, number of rooms, square footage and other parameters to select the right property. We wish you the best of luck in finding your future home in Indonesia!

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