how can foreigners buy apartments in jakarta

How Can Foreigners Buy Apartments in Jakarta?

  • InCorp Editorial Team
  • 30 October 2024
  • 6 reading time

Buying an apartment in Jakarta is a desirable choice for both foreigners and locals. Recognizing its potential, many foreign investors have turned to Jakarta’s real estate market, seeing it as an undervalued investment.

With a large consumer base and an expanding middle-income population, Jakarta’s demand for property is climbing steadily and is expected to skyrocket in the coming years. For strategic investors, Jakarta offers an attractive market with strong prospects for future growth.

Can Foreigners Buy Property in Jakarta?

Yes, foreigners can buy property in Jakarta, though they must navigate specific regulations and restrictions. Current laws prevent non-citizens from owning real estate directly in their name anywhere in Indonesia.

However, alternative options allow foreigners to enjoy property ownership benefits in the country. Foreigners can primarily obtain property through leasehold agreements, and several methods are available to facilitate this type of ownership.

Average Property Values in Jakarta

In Jakarta, the average price per square meter for residential houses is around IDR 18.3 million, IDR 25 million for commercial spaces, and approximately IDR 12.6 million for land.

Property Taxes in Jakarta

Before purchasing property in Jakarta, it’s crucial to be aware of the various taxes involved, which include:

  • Annual land and building tax
  • Rental income tax
  • Land acquisition tax
  • Transfer tax
  • Corporate income tax
  • Construction tax
  • Document stamp tax

Best Places to Buy Apartments in Jakarta

Only some places in Jakarta are created the same for their property investment opportunities. To make the most of your money and find the best apartment in Jakarta, here are some locations you can consider when purchasing an apartment based on the major districts in the city.

  • South Jakarta: Kebayoran Baru, Sudirman, Kuningan
  • West Jakarta: the Chinatown, Tangerang
  • North Jakarta: Kelapa Gading
  • Central Jakarta: Menteng, Golden Triangle
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How Do You Buy an Apartment in Jakarta as a Foreigner?

Like other parts of Indonesia, Jakarta doesn’t have favorable and transparent foreign purchase and ownership regulations allowing foreigners to buy apartments.

In Jakarta, a foreigner can only buy new or established property, apartments, and condos. Foreigners can only lease or acquire the right to use the property by setting up a foreign-owned company, PT PMA, to buy an apartment in Jakarta.

Foreign-Owned Company PT PMA

Foreigners setting up a PT PMA in Jakarta can purchase a property with Hak Milik. To incorporate a PT PMA, foreigners must create a business plan, open a local bank account, inject investment capital, and run their business actively.

Through Lease Agreement

When you choose a leasehold title while buying a property in Jakarta, a lease agreement between you and your landlord is vital.

A lease agreement must be legally signed and stamped, stating the rights and obligations of both parties during the stated lease period. Legal experts must draft and notarize the agreement officially and professionally.

Here are some essential requirements and policies for foreigners looking to buy property in Jakarta:

  • Foreigners must reside in Indonesia and hold a KITAP or KITAS to buy and maintain property.
  • The minimum property price in Jakarta is IDR 10 billion (approximately $673,000) for a house and IDR 5 billion (around $340,000) for an apartment.
  • Foreigners and their families can own only one property, with a maximum area of 2,000 square meters.
  • The property must be purchased in cash or financed through a loan from an Indonesian bank.
  • If a foreigner leaves Indonesia, they must transfer property rights to another eligible individual within one year of departure.
  • The initial right of use is granted for 30 years, possibly extending it to 80 years.

These regulations are in place to ensure that foreigners can invest in Jakarta’s real estate market while complying with Indonesian laws and policies.

READ MORE:

Top Reasons to Use an Agent When Buying an Apartment in Jakarta

Using a real estate agent in Jakarta is a wise decision, especially considering the challenges of navigating the property market. Therefore, enlisting the help of a real estate agent when looking to buy or rent an apartment in Jakarta is highly beneficial.

Convenience and Access to Listings

Due to Jakarta’s size and diversity, finding the perfect property can be overwhelming. Real estate agents provide significant convenience and access to many properties that meet your criteria. They have comprehensive listings from various agents and can quickly identify suitable options.

Additionally, they can guide you to the best neighborhoods for your needs. If you’re selling a property, an agent can handle inquiries and appointments, saving you time and ensuring you get all potential buyers.

Expert Negotiators

Real estate negotiations can be complex, particularly when buyer and seller interests clash. Real estate agents serve as effective intermediaries, leveraging their negotiation expertise to facilitate smooth transactions. They can handle delicate issues, such as repair responsibilities, ensuring that both parties reach a satisfactory agreement.

Assistance with Contract Review

Property transactions often involve intricate contracts that confuse those unfamiliar with local regulations. Jakarta real estate agents possess the knowledge to review these contracts thoroughly, ensuring they protect your interests. They can advise you on necessary inclusions or exclusions and help clarify the implications of each clause.

Identifying Risks and Potential Problems

Experienced real estate agents in Jakarta can provide valuable insights into potential issues with a property. With their trained eyes, they can spot problems that might not be immediately apparent to newcomers, such as scams or structural issues that could lead to costly repairs.

Save Time and Energy

Buying or selling property in Jakarta can be time-consuming and stressful, especially in a bustling city. An agent can manage the entire process, working diligently to ensure everything runs smoothly. They keep you updated throughout, allowing you to focus on other priorities.

Guide to Doing Business in Jakarta

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Buy Apartment in Jakarta with InCorp

The Indonesian property market is thriving, with a continuous rise in demand for apartments and real estate. Partnering with a real estate agent simplifies your property search and enhances your investment journey in Jakarta.

If you’re ready to explore the best options to buy an apartment in Jakarta, InCorp can assist you in navigating the complexities of buying or renting property in the city. Our expertise includes:

  • Company Registration: We help you set up your business in Indonesia efficiently and compliantly.
  • Land and Property Ownership: Our team provides tailored advice on property acquisition, ensuring you understand your rights and obligations.

Fill out the form below to seize this valuable investment opportunity in Jakarta.

Daris Salam

COO Indonesia at InCorp Indonesia

With more than 10 years of expertise in accounting and finance, Daris Salam dedicates his knowledge to consistently improving the performance of InCorp Indonesia and maintaining clients and partnerships.

Get in touch with us.

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Frequent Asked Questions

When a foreigner or their heir move to another country and have not stayed in Indonesia within one year, they must relinquish or transfer ownership rights to someone that meets Indonesian land or property ownership requirements in Indonesia.

There are three things business owners need to consider before setting up a business in Indonesia: the type of business entity, capital requirements, and regulations.

Indonesian regulations separate local companies from foreign companies. Generally, foreign-owned companies (PT PMA) have more limitations than their local counterparts (Local PT). However, to pursue more foreign direct investment in the country, the government has taken several bold initiatives to increase the ease of doing business and provide numerous attractive incentives for foreign investors.

It depends on the type of company you decide to establish.
  • In a local (PT) company, a foreigner cannot become a commissioner. It is possible to have a foreign director, but there has to be at least one local Director in PT.
  • In a foreign-owned (PT PMA) company, a foreigner can be a director or a commissioner.

Foreign citizens can expand to Indonesia and establish a foreign-owned company (PT PMA). Depending on the business line you want to pursue, there are regulations for foreigners to follow when setting up a company in Indonesia. One of the most important is the so-called Positive Investment List, which is updated frequently and with other Indonesian regulations.