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Armand Yapsunto Muharamsyah & Partners



Can anyone (including foreigners) own and occupy real estate in your jurisdiction (including shares in property owning companies)? Are there any restrictions?

There are several types of rights over land governed under Indonesia’s Agrarian Law, among others, Rights of Ownership, Right to Cultivate, Right to Build, Right to Use, and Right to Lease.

Foreigners, both individual and legal entity, cannot own Rights of Ownership over real estate in Indonesia but may occupy the same by way of lease from an Indonesian entity or – for foreign individual domiciled in Indonesia who hold the Residence Permit for doing business, working, investing or other purposes which may benefits Indonesia – may own Rights to Use over a land-house with a maximum area of 2,000 square meters and/or multi-storey buildings for residence purposes.

As for foreign investment companies domiciled in Indonesia, it is deemed as an Indonesian legal entity and therefore eligible to hold Right to Cultivate, Right to Build, Right to Use, and Right to Lease for a certain period of time.

Are there restrictions on lending for the purchase of real estate by foreign companies? If so briefly give an outline?

There is no restriction for foreign entities, both individual and legal entities, to lend monies from the licensed onshore banks to purchase or lease a real estate in Indonesia. However, the foreign companies must form OR participate in a foreign direct investment company (FDI company) domiciled in Indonesia to be able to purchase a real estate herein.




Please provide a short summary of the fees and costs (including tax) relating to buying real estate in your jurisdiction.

The seller will be imposed with seller income tax (final tax) in the amount of 2,5% and the purchaser will be imposed to pay Land and Building Transfer Duty in the amount of 5% calculating from the sale value OR real estate’s value (as stated in the annual land and building tax - whichever higher) and 10% VAT should the real estate bought from a developer.

The sale and purchase of real estate shall be made in notarial deed and signed before a land notary. Stamp duty is payable by the purchaser upon signing of the sale and purchase deed.

It is advisable to do a search/due diligence prior to buying a real estate in Indonesia, which consists of the examination of the status of right, existing encumbrance(s) and/or any related dispute. This process might incur several fees associated with the registration in the land office, notary, lawyers, valuation, and other professional advisors’ fees.


Are there taxes applicable to owning real estate and can the burden of the taxes be passed to someone else (e.g. a tenant or an occupier - not being the owner)?

Annual Land and Building Tax would be payable to the registered owner of the real estate. The amount of the tax itself varies in each city/regency in Indonesia and generally increases from time to time.

The burden of paying the Land and Building Tax may be shifted to the tenants or occupiers subject to the commercial agreement between the parties.
Tax Breaks

Are there tax breaks or other incentives for foreigners to buy real estate in your jurisdiction? If so what are they?

Foreign ownership over real estate in Indonesia has just recently been introduced in 2016. Previously, no foreigners (save for FDI company) are allowed to hold whatsoever rights over any real estate in Indonesia due to the land utilization principles embedded under Indonesia’s Agrarian Law. Up to this date, no tax breaks or other incentives applicable for foreigners to buy real estate in Indonesia.


Title of Real Estate

How is the ownership of Real Estate evidenced in your jurisdiction?

The transfer of ownership over a real estate is deemed effective upon registration of the new owner on the relevant land office where the real estate in question is situated. Such registration would be evidenced by the issuance of a land certificate – which is a copy/extract of the land book kept in the land office – annotating the transfer and the current rightful rights holder of the real estate. The land certificate is conclusive ownership evidence of the real estate described vested in the person/body named in it.

Is it possible to keep the identity of owners of real estate confidential in your jurisdiction?

No. Every real estate owner must disclose their identity to be registered in the land office.

However, such information is not available publicly, and searches – which conducted manually by submitting a formal application letter attached with the specific prerequisite documents at a prescribed fee – in respect of any real estate must be done to obtain the information regarding the status of its rights, existing encumbrance(s) and/or any related dispute.

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Ibrahim Senen
Armand Yapsunto Muharamsyah & Partners
Jakarta, Indonesia

Handika Tjen
Armand Yapsunto Muharamsyah & Partners
Jakarta, Indonesia

Setyaning Kartika
Armand Yapsunto Muharamsyah & Partners
Jakarta, Indonesia