Buying and owning property in Jakarta as a foreigner

Authored by the expert who managed and guided the team behind the Indonesia Property Pack

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Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Jakarta. If you'd like to learn more about us, you can check our presentation page.

What legal restrictions do foreigners face when buying property in Jakarta compared to Indonesian citizens?

Foreigners face significant legal restrictions when purchasing property in Jakarta compared to Indonesian citizens.

The most important restriction is that foreigners cannot own freehold land (Hak Milik), which is reserved exclusively for Indonesian citizens. Instead, foreigners must use alternative ownership structures such as Hak Pakai (Right to Use), leasehold arrangements, or strata-title for apartments.

Jakarta property regulations also impose minimum purchase price requirements for foreign buyers. For houses under Hak Pakai ownership, the minimum investment is typically around IDR 10 billion. For apartments under strata-title, foreigners investing through the Second Home Visa program must purchase property worth at least IDR 2 billion.

Ownership duration is another key difference. While Indonesian citizens can own freehold property indefinitely, foreigners typically receive initial ownership periods of 30 years for Hak Pakai, which can be extended up to 80 years total depending on the specific arrangement and government regulations.

Indonesian citizens also have access to more diverse financing options and can purchase property in any location without restrictions, while foreigners may face additional location-based limitations in certain areas.

Do foreigners need specific visa or residency status to buy property in Jakarta?

Yes, foreigners typically need specific visa or residency status to purchase property in Jakarta, though requirements vary by ownership type.

For Hak Pakai ownership or strata-title apartments, foreigners usually need one of these residency statuses: KITAS (temporary stay permit), KITAP (permanent stay permit), or the Second Home Visa. The Second Home Visa specifically requires a minimum property investment of IDR 2 billion and allows property ownership as part of the visa benefits.

For leasehold arrangements, no specific residency status is legally required, though having long-term residency enhances security and makes the transaction process smoother. Some recent practices allow foreigners to purchase property first and then apply for the required stay permit, but this should be verified with current local regulations.

The visa or residency permit must remain valid throughout the ownership period. If the permit expires and isn't renewed, it could potentially affect the property ownership rights, making it crucial to maintain proper legal status in Indonesia.

It's something we develop in our Indonesia property pack.

Is physical presence required during the Jakarta property buying process?

No, physical presence in Jakarta is not legally required to complete a property purchase.

Foreigners can handle the entire transaction remotely by appointing a legal representative through a properly notarized power of attorney. This representative can sign contracts, appear before the notary (PPAT), handle document submissions, and complete all necessary procedures on the buyer's behalf.

All documents executed outside Indonesia must be legalized through the Indonesian consulate or apostilled according to international agreements. The power of attorney must be very specific, clearly outlining all actions the representative is authorized to perform during the property transaction.

However, despite not being legally required, a personal visit to Jakarta for due diligence and property inspection is highly recommended. This allows buyers to physically inspect the property, verify its condition, meet with lawyers and agents in person, and better understand the local market conditions.

Many successful foreign property buyers combine remote legal processing with at least one inspection visit to Jakarta before finalizing their purchase decision.

What are the tax implications for foreigners purchasing property in Jakarta?

Foreigners pay the same basic property taxes as Indonesian citizens, but should understand the complete tax structure before purchasing.

The main acquisition tax is BPHTB (Property Rights Transfer Tax), which is 5% of the transaction value that exceeds the regional non-taxable threshold. This tax is paid by the buyer regardless of nationality. Annual property tax (PBB - Land and Building Tax) is approximately 0.5% of the assessed property value.

For new properties, VAT (PPN) of 11% may apply depending on the developer and project status. When selling property, the seller pays income tax (PPh) of 2.5% of the transaction value, which would apply to foreigners when they eventually sell.

Additional transaction costs include notary fees (approximately 1-2% of property value) and potential real estate agent commissions (typically 2-5% split between buyer and seller or paid entirely by seller).

Foreign buyers should also consider that Indonesia doesn't impose specific capital gains tax on property sales, but regular income tax rules may apply if the sale is considered business activity rather than personal investment.

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What is the step-by-step process for foreigners to buy property in Jakarta?

The Jakarta property purchase process for foreigners typically takes 2-3 months and follows these specific steps:

First, decide on your ownership structure (Hak Pakai, leasehold, strata-title, or through a foreign-owned company PT PMA) based on your residency status and investment goals. Then compile all required documents including valid passport, visa/permit documentation, NPWP (Indonesian tax number), proof of funds, and marriage certificate if purchasing jointly.

Next, find suitable property through a licensed agent experienced with foreign buyer transactions, followed by comprehensive due diligence with legal assistance to verify title, permits, and zoning compliance. Sign the preliminary agreement or Letter of Intent (LOI) with typically 10-30% deposit payment.

Execute the formal Sale and Purchase Deed (Akta Jual Beli) before a certified notary (PPAT), who also handles registration at the local land office. Pay all applicable taxes and fees including BPHTB, notary costs, and VAT if applicable.

If your ownership structure requires specific visa status (like Second Home Visa), apply for the relevant permit during or after the purchase process. Finally, receive the official title document (Hak Pakai certificate or strata-title) registered in your name.

What documents do foreigners need to complete property purchase in Jakarta?

Foreign property buyers in Jakarta must prepare a comprehensive document package to complete their purchase legally.

Essential personal documents include a valid passport with minimum 36 months remaining validity, relevant visa or stay permit (KITAS, KITAP, or proof of Second Home Visa application), Indonesian tax identification number (NPWP), current bank statements proving adequate funds, and marriage certificate if the property will be jointly owned.

If using a legal representative, a properly notarized power of attorney specifying all authorized actions is required. The seller must provide property-related documents including the current land/ownership certificate, building permit, recent property tax payment receipt (PBB), and any relevant strata-title or apartment management documents.

Transaction documents include the formal Deed of Sale and Purchase (Akta Jual Beli) prepared by the notary, tax clearance certificates, and proof of BPHTB tax payment. All foreign documents must be legalized through Indonesian consulates or apostilled according to international agreements.

Additional documents may be required depending on the specific ownership structure chosen and the property type (house vs. apartment vs. commercial space).

Is hiring a lawyer mandatory for property purchases in Jakarta?

While not legally mandatory, hiring both a lawyer and certified notary is highly recommended and considered essential for safe property transactions in Jakarta.

All property transfers must be processed before a certified notary (PPAT - Pejabat Pembuat Akta Tanah) who handles the legal documentation and registration. However, the notary primarily focuses on document execution rather than buyer protection or comprehensive legal advice.

A lawyer provides crucial services including thorough due diligence on property title and permits, contract review and negotiation, verification of seller's legal right to sell, identification of potential legal issues or disputes, and ensuring compliance with foreign ownership regulations.

The complex nature of Indonesian property law, especially for foreigners, makes legal assistance particularly valuable. Lawyers can identify issues that might not be apparent to foreign buyers, such as zoning violations, outstanding debts on the property, or problems with the ownership chain.

The cost of legal services (typically 1-2% of property value) is generally considered worthwhile insurance against much larger potential losses from legal complications or fraudulent transactions.

Which Jakarta neighborhoods do foreigners typically prefer?

Foreign residents and investors in Jakarta show strong preferences for specific areas that offer international amenities, good infrastructure, and expat-friendly environments.

South Jakarta remains the top choice, particularly areas like Kemang, Senopati, Kebayoran Baru, and Pondok Indah. These neighborhoods offer established expat communities, international schools, western-style restaurants and cafes, modern shopping centers, and relatively better air quality compared to central areas.

Central Jakarta areas including Menteng, Thamrin, and Sudirman attract foreigners working in government, embassies, or major corporations due to proximity to business centers. These areas feature high-end condominiums, luxury hotels, and easy access to Jakarta's main commercial districts.

Kuningan and Setiabudi have become increasingly popular for their modern high-rise apartments, business hub locations, and newer infrastructure including proximity to MRT stations. These areas offer a more contemporary urban living experience with international-standard facilities.

North Jakarta areas like Kelapa Gading are growing in popularity among younger foreign professionals and investors due to more affordable prices, newer developments, and improving connectivity to other parts of the city.

We did some research and made this infographic to help you quickly compare rental yields of the major cities in Indonesia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.

Which Jakarta areas are best for living, renting out, or capital appreciation?

Different Jakarta areas excel in different aspects of property investment and living quality, requiring strategic area selection based on your primary objectives.

For lifestyle and living quality, South Jakarta areas like Kemang, SCBD (Sudirman Central Business District), Senopati, and Pondok Indah offer the best combination of international amenities, expat communities, quality restaurants, and international schools. These areas consistently rank highest in Jakarta's liveability indexes.

For rental income potential, well-managed apartments in Central Jakarta (Menteng, Thamrin) and South Jakarta (Kemang, Senopati) typically generate rental yields of 5-8% annually. The consistent demand from expat professionals and embassy staff provides stable rental income streams.

For capital appreciation prospects, areas around MRT and LRT lines show the strongest growth forecasts as Jakarta's mass transit system expands. Kuningan, Setiabudi, and newer developments in Central Jakarta benefit from improved connectivity and urban development projects.

Emerging areas like Kelapa Gading in North Jakarta offer higher potential returns due to lower entry prices, growing infrastructure development, and increasing popularity among younger professionals, though with higher risk compared to established areas.

It's something we develop in our Indonesia property pack.

What are current property prices across Jakarta regions?

What common mistakes should foreigners avoid when buying Jakarta property?

Foreign property buyers in Jakarta frequently make costly mistakes that can be easily avoided with proper preparation and legal guidance.

The most serious mistake is attempting to buy freehold property (Hak Milik) using nominee arrangements with Indonesian citizens. This practice is illegal and leaves buyers with no legal protection if the nominee decides to claim full ownership or if authorities challenge the arrangement.

Many foreigners skip comprehensive due diligence, failing to verify property titles, building permits, zoning compliance, or outstanding debts. This can result in purchasing property with legal complications, structural issues, or unexpected liabilities that become the buyer's responsibility.

Ignoring minimum price requirements and location restrictions is another common error. Foreign buyers must meet specific investment thresholds and may face limitations on where they can purchase property, depending on local regulations and ownership structure.

Poor contract review often leads to problems later, particularly failing to specify lease extension terms, maintenance cost responsibilities, or property management arrangements. Not using reputable notaries and lawyers increases risks of fraud, documentation errors, or non-compliance with Indonesian property law.

Finally, many foreigners underestimate total transaction costs, budgeting only for the property price without accounting for taxes, fees, legal costs, and ongoing maintenance expenses.

Can foreigners get mortgages in Jakarta, and what are the conditions?

Foreigners face significant challenges accessing local mortgage financing in Jakarta, with most banks imposing strict requirements that many foreign buyers cannot meet.

Indonesian banks typically only consider mortgage applications from foreigners holding KITAP (permanent residence permit) or long-term KITAS with substantial remaining validity. Even qualified applicants face low loan-to-value ratios, usually maximum 50-60% of property value, requiring substantial down payments.

Interest rates for foreign borrowers are typically higher than local rates, ranging from 9-12% annually, with variable rate structures that can increase costs over time. The approval process is lengthy and requires extensive documentation including proof of Indonesian income, tax returns, employment contracts, and bank statements.

Most Indonesian banks also require foreign borrowers to have established banking relationships and credit history within Indonesia, making it difficult for new residents to qualify. Property insurance and life insurance are typically mandatory requirements that add to the total cost.

Due to these restrictions, most foreign property buyers in Jakarta use cash purchases, overseas bank financing secured against assets in their home countries, or alternative financing arrangements through developers or private lenders. Some developers offer in-house financing programs specifically designed for foreign buyers, though terms may be less favorable than traditional bank loans.

What are all the costs associated with buying and selling property in Jakarta?

Property transactions in Jakarta involve multiple costs beyond the purchase price that foreign buyers must budget for carefully.

For buyers, the primary tax is BPHTB (Property Rights Transfer Tax) at 5% of the transaction value exceeding the regional threshold (which varies by area). Annual property tax (PBB) is approximately 0.5% of assessed value. VAT (PPN) at 11% applies to new properties from developers.

Transaction fees include notary and PPAT costs (1-2% of property value), legal fees (typically 1-2% if hiring a lawyer), and real estate agent commissions (usually 2-5% split between parties or paid by seller). Due diligence costs, translation fees, and document legalization can add another 0.5-1% to total expenses.

When selling property, sellers pay income tax (PPh) of 2.5% of transaction value regardless of profit or loss. The new buyer pays BPHTB again, making this a recurring cost with each ownership transfer. There are no specific capital gains taxes for property sales, but income tax rules may apply if sales are considered business activity.

Ongoing costs include annual property tax (PBB), property management fees for apartments (typically 30,000-100,000 IDR per square meter annually), insurance, utilities, and maintenance reserves.

It's something we develop in our Indonesia property pack.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.

Sources

1. Wise - Buy Property in Indonesia
2. DSGPay - Buying Property in Indonesia for Foreigners
3. Let's Move Indonesia - Buy Property as a Foreigner
4. Exotiq Property - Can Foreigners Buy Property in Indonesia
5. Investasian - Jakarta Property
6. Cekindo - Buy a House in Indonesia
7. BambooRoutes - Indonesia Real Estate for Foreigners
8. ICLG - Real Estate Laws and Regulations Indonesia
9. Indonesia Real Estate - Property Buying Process
10. Grata Net - Legal Aspects of Real Estate Transactions