To navigate the process of purchasing property in Indonesia, foreigners must adhere to a meticulous set of steps in accordance with the applicable regulations. In this guide, we will summarize several crucial stages to be followed in the acquisition of landed or condominium properties by foreigners, particularly involving Rights to Build (Hak Guna Bangunan or HGB) or Right to Use (Hak Pakai) on state-owned land and Management Rights (Hak Pengelolaan or HPL).
The first step in this process is to determine the properties for conducting real estate transactions in Indonesia. This involves selecting properties that suit your needs and having a comprehensive understanding of the regulations and procedures required.
The subsequent step involves opening a bank account with a financial institution supervised by the Financial Services Authority (OJK), such as Perbanas or Himbara. This account is essential for payment and financial record-keeping related to property transactions.
Upon identifying the desired property, the next step is signing a Conditional Sale and Purchase Agreement (Perjanjian Pengikatan Jual Beli or PPJB) with the property developer. This process also encompasses the payment and acquisition of the necessary Foreign Right to Use Recommendation (Rekomendasi Hak Pakai Luar Negeri or HPL) for property transactions.
Another critical stage is the payment of the Land and Building Transfer Duty (Bea Perolehan Hak atas Tanah dan Bangunan or BPHTB) and income tax in accordance with Law No. 1 of 2022. Following this, the process of registering the transfer of land rights and registering the Right to Use for landed properties or condominiums is carried out at the National Land Agency (Badan Pertanahan Nasional or ATR/BPN).
It is important to note that the Foreign Right to Use Recommendation (Rekomendasi HPL) is required for any legal actions pertaining to land rights, whether it involves foreigners or Indonesian citizens.
Source: Guidelines on Foreigners’ Property Ownership in Indonesia
