Amendment to the Regulation of The State Minister of Agrarian Affairs/Chairman of the National Land Agency No 7/1996
“Foreigners may purchase the Right of Utilization (Hak Guna Bangunan) over land with the Right of Proprietorship (Hak Milik) from the Holder of said Right of Utilization along with houses or purchase the Right Utilization and later contract houses on it. The purchase of the Right of Utilization shall be conducted pursuant to the effective stipulations that are, by virtue of a deed made by land conveyance, which shall later be registered in the Land Office. Likewise, the requirements or construction of houses must abide by the prevailing stipulations, for example with respect to the Building Construction Permit (IMB).”
Foreigners may own a house and obtain the title on land by means of the following:
- Purchasing or contracting a house on land with the right utilization with the right proprietorship
- Purchasing an apartment unit contracted on land with the right of utilization over state land
- Purchasing or contracting a house on land with the right of Proprietorship or the Right of Lease over building on the basis of a written agreement with the owner of the land title concerned
For many years Indonesia has decreed that land in Indonesia can only be owned by Indonesian citizens. Thus, if you want to buy a house (as a foreigner), they wouldn’t have let you in the past.
In the late 90s, new laws were enacted so that foreigners are now permitted to purchase apartments and office space in Indonesia if the building has a strata title status. This enables the foreigner to own the apartment or office space but not the land on which it stands.
PURCHASING AN APARTMENT OR OFFICE UNDER STRATA TITLE
Ownership of offices and apartments is possible through strata title deeds, but the set of laws and regulations that were enacted in 1996 are still somewhat unclear and ambiguous. Therefore, to our knowledge, no foreigner has actually been able to receive a strata title certificate of ownership to reflect their office or apartment ownership.
The 1996 regulation (No. 41/1966) states that foreigners who reside in Indonesia, or visit the country regularly for business purposes, can purchase a home, apartment or condominium as long as it isn’t a part of a government-subsidized housing development. However, foreigners can only hold land-use deeds, and most developments hold right-to-build deeds. As it stands now, it’s not possible for someone to have a land-use deed for a sub-unit of a right-to-build deed. The length of these titles varies as well. Therein lies some of the difficulties and unclear ownership issues.