Franework Legal basis; Subject; Object; Terms and conditions; Transfer of house and residence; Mortgage rights of house or residence; Termination of the ownership of house or residence; Differences between the previous regulation and the current regulation; and Conflicting regulations.

1. The Ownership of House or Residence
by Foreigner
Eddy M. Leks, S.H., LL.M., MCIArb.

2. Framework
• Legal basis;
• Subject;
• Object;
• Terms and conditions;
• Transfer of house and residence;
• Mortgage rights of house or residence;
• Termination of the ownership of house or residence;
• Differences between the previous regulation and the current
regulation; and
• Conflicting regulations.

3. Legal Basis
• Government Regulation No.103 of 2015 on the Ownership of House or Residence by
Foreigner Domiciled In Indonesia (“PP No.103/2015”)
• Government Regulation No.41 of 1996 on the Ownership of house or residence by
Foreigner Domiciled In Indonesia (“PP No.41/1996”) (revoked)
• Minister of Agrarian and Spatial or Head of National Land Agency Regulation No.29 of
2016 on the Procedure for Grant, Release, or Ownership Transfer of Housing or
Residential by Foreigner Domiciled In Indonesia (“PERMEN Agraria No.29/2016”),
that revokes PERMEN Agrarian No. 13/2016 on the Procedure for Grant, Release, or
Ownership Transfer of Housing or Residential by Foreigner Domiciled In Indonesia
• Minister of Agrarian and Spatial or Head of National Land Agency Regulation No.7 of
1996 on the Requirements for The Ownership of House or Residence by Foreigner
(revoked); and
• Minister of Law and Human Rights Regulation No. 23 year 2016 on Foreigner or
Foreigner Heirs as The Owner of House or Residences Whose No Longer Domiciled in
Indonesia

4. Subject of Regulation
1. A foreigner who holds a resident permit in Indonesia;
2. A foreigner who provides the benefit to Indonesia, doing
business, working, or doing investment in Indonesia
Legal basis: Article 1 paragraph 1 PP No.103/2015 jo. Article 1 paragraph 1
permenkumham 23/2016

5. Resident Permit
Legal basis: Elucidation of Article 2 Paragraph 2 PP No.103/2015
The foreigners shall have the resident permit in Indonesia.
Resident Permit consists of:
Diplomatic
Resident
Permit
Service
Resident
Permit
Visitor
Resident
Permit
Limited
Resident
Permit
Permanent
Resident
Permit

6. Object of Regulation
1. A foreigner can own the single house which is built over
the land:
a. Right of use;
b. Right of use over right of ownership which is
controlled based on right of use agreement over right
of ownership with Land Office Deed; or
c. Right of use from transfer of right of ownership or
right to build.
2. The condominium unit which is:
a. built over the land with Right of use;
b. from transfer of right of ownership over condominium
unit.
Legal basis: Article 4 Paragraph 1 PERMEN Agraria No.29/2016

7. Object of Regulation – Cont’d
Legal basis: Article 1 Paragraph 2 PP No.103/2015
Single House
A house that has its own plot and one of its wall is not
built right at the plot border.

8. Object of Regulation – Cont’d
Legal basis: Article 1 paragraph (3) PP No.103/2015
Condominium Unit
Condominium unit that is mainly used separately from the main
function as a residence and has connecting facilities to the public
road

9. Object of Regulation – Cont’d
The foreigners can obtain the house or condominium from
sale and purchase, hibah, exchange, auction, and any other
ways.
Legal basis: Article 6 PERMEN Agraria No.29/2016

10. Requirements
The purchase of Single House or Condominium Unit shall
be with the minimum price, in the form of new unit through
sale and purchase, hibah, exchange, auction or any other
ways intended.
Legal basis: Article 6 Paragraph (1) PERMEN Agraria No.29/2016

11. Minimum Price Requirements
Legal basis: Attachments of PERMEN Agraria No.29/2016
10
5 5
3
5 5 5
3 3
2 2
1
0
2
4
6
8
10
12
Minimum Price (Billion Rupiah)
SINGLE HOUSE
DKI Jakarta Banten Jawa Barat Jawa Tengah
Yogyakarta Jawa Timur Bali Nusa Tenggara Barat
Sumatera Utara Kalimantan Timur Sulawesi Selatan Daerah lainnya

12. Minimum Price Requirements - Cont’d
Legal basis: Attachments of PERMEN Agraria No.29/2016
3
2
1 1 1
1.5
2
1 1 1 1
0.75
0
0.5
1
1.5
2
2.5
3
3.5
Minimum Price (Billion Rupiah)
CONDOMINIUM UNIT
DKI Jakarta Banten Jawa Barat Jawa Tengah
Yogyakarta Jawa Timur Bali Nusa Tenggara Barat
Sumatera Utara Kalimantan Timur Sulawesi Selatan Daerah lainnya

13. Taxes
Legal basis: Law No.42 of 2009 on the Value Added Tax of Goods & Services and Sales
Tax of Luxury Goods – Minister of Finance No.35/PMK.010/2017 – Minister of Finance
No. 90/PMK.03/2015
Foreigner will have to bear 10% Value Added Tax (VAT) and 20%
luxury tax (for a single house priced at more than Rp 20 billion or a
condominium unit priced at more than Rp 10 billion), as well as the
5% acquisition levy over land building (BPHTB). Further, tax payer
will have to pay 5% Income Tax of Super Luxury Goods (for a single
house priced at more than Rp 5 billion with building area more than
500 m2 or condominium unit priced at more than Rp 5 billion with
building area more than 400 m2).

14. Period of Right of Use
Time period of the right of use over the land for the ownership of
the house:
Legal basis: Article 6 and Article 8 PP No.103/2015
The foreigner is
granted the
right of use for
30 years.
The right of use
can be extended
for 20 years
The right of use
can be renewed
for 30 years

15. Special Requirements for Extension and Renewal of Right of
Use
The extension and the renewal of right of
use is granted as long as the foreigner still
has resident permit in Indonesia.
Legal basis: Article 6 and Article 8 PP No.103/2015

16. General Requirements for Extension and Renewal of Right of
Use
Legal basis: Article 46 PP No.40 /1996
Requirements for extension and renewal right of use:
The land is still
properly used in
accordance with
the
circumstances,
nature and the
purpose of
granting such
rights The terms of
granting the
rights are
properly
fulfilled by the
right holders
The right
holders are still
qualified as
right holders

17. Right of Use under the agreement
Period of the right of use over the right
of ownership which is controlled under
the agreement:
a. The foreigner is granted the right
of use for 30 years.
b. The right of use can be extended
for 20 years based on the
agreement between foreigner and
landlord.
c. The right of use can be renewed
for 30 years based on the
agreement between foreigner and
landlord.
Legal basis: Article 7, Article 8, and Article 9 PP No.103/2015

18. Right of Use under the agreement – Cont’d
a. The agreement for extension and renewal the right of use between the
foreigner and landlord must be registered in land book and rights over
the land certificate;
b. The extension and the renewal of right of use is granted as long as the
foreigner still has resident permit in Indonesia.
Legal basis: Article 7, Article 8, and Article 9 PP No.103/2015

19. Terms & Conditions For the Ownership of House and Residence
Legal basis: Article 3 and Article 12 PP No.103/2015
1. The foreigner must have the resident permit in Indonesia.
2. If the foreigner dies, the house or the resident could be
bequeathed to the Indonesian or the other foreigner.
3. In case of the heir is the foreigner, the heir must have the
resident permit in Indonesia.
4. The Indonesian who is married to the foreigner can own the
right over the land as same as the other Indonesian. However,
the right over the land is not the joint asset which is evidenced
by the property separation agreement made in a notary deed.

20. Transfer of House or Residence
Legal basis: Article 6 PERMEN Agraria No.29 of 2016
• The rights of house and residence can be assigned or transferred
to the other party.
• The rights of house and residence can be assigned or transferred
not only to Indonesians, but also to other foreigner.
• The rights of house can be transferred with sale and purchase,
hibah, exchange, or auction.
• If it is built on right of use over right of management, approval
is required from the holder of right of management and the
official issuing certificate.

21. Transfer of House or Residence – Cont’d
Legal basis: Article 4 and 5 PERMEN Agraria No.13 of 2016
• If it is built on right of use over right of management, approval
is required from the holder of right of management and the
official issuing the certificate.
• If its built on right of use over right of ownership, from the
holder of right of ownership and the official issuing the
certificate

22. Transfer of Rights to Foreigners
If a foreigner who owns the house and residence is leaving
Indonesian territory, within a period of 1 (one) year the
foreigner shall relinquish or transfer the rights of the house
and land to other parties who qualify in accordance with the
prevailing laws and regulations.
Legal basis: Article 2 and 3 of PERMENKUMHAM 23/2016

23. Mortgage Rights of House or Residence
Legal basis: Article 16 PERMEN Agraria No.29 of 2016
The rights over new housing or residence by foreigner can be
secured through Hak Tanggungan (Mortgage Rights).

24. Termination of the Ownership of Housing or Residence
1. The foreigner or the heir who is also the foreigner is no
longer domiciled in Indonesia.
The foreigner or the heir who is also the foreigner shall
relinquish or assign the right over the housing and the land to
another party who is qualified within 1 (one) year period
since the foreigner or the heir who is also the foreigner,
obtained the “Exit Pass”.
Legal basis: Article 2 and 3 of Permenkumham No.23/2016

25. Termination of the Ownership of Housing or Residence –
Cont’
2. If the period of relinquishment or assignment of the right
over the housing and the land is lapsed, and the housing and
the land have not been relinquished or assigned, so:
a. The house over the right of use will be auctioned by the
state. The results of the auction will be given to the
former owner of the land (the foreigner) after deducting
the cost of the auction and another costs which are
incurred.
b. The house which is built over the land under the
agreement will be owned by the landlord.
Legal basis: Article 10 PP No.103/2015

26. Differences Between the Previous Regulation and Current
Regulation
Topic PP No. 41/1996 PP No.103/2015
Subject The foreigner who provides the
benefit to the development of
Indonesia
The foreigner who holds a resident
permit in Indonesia and provides
the benefit to Indonesia, doing
business, working, or doing
investment in Indonesia
Status of land Right of use over the state land; the
land which is controlled under the
agreement between the foreigner
and the land rights holder;
condominium unit which is built
on the right of use over the state
land; land over the right of lease
Right of use over state land; right
of use over right of ownership;
right of use over right of
management.

27. Differences Between Previous Regulation and Current
Regulation – Cont’d
The object of housing
or residential
The foreigner can
construct the house
which can be done with
the consent of land
rights owner with the
written agreement.
The foreigner shall buy the new
house or the new condominium
unit
Time period of the
right of use
Right of use over the
land is granted for 25
years, can be extended
for 20 years, and can be
renewed for 25 years.
The right of use over the land is
granted for 30 years, can be
extended for 20 years, and can be
renewed for 30 years.
Time period of Right
of Use under the
agreement
Right of use under the
agreement is granted for
25 years, can be renewed
for 25 years.
The right of use over the right of
ownership which is controlled
under the agreement is granted for
30 years, can be extended for 20
years, and can be renewed for 30
years

28. Differences Between Previous Regulation and Current
Regulation – Cont’d
Inheritance Not regulated. House or the residence can be
bequeathed to the Indonesian or the
other foreigner.
Marital Asset Not regulated. The Indonesian who is married to
the foreigner can own the right over
the land as same as the other
Indonesian. However, the right over
the land is not the joint asset which
is evidenced by the property
separation agreement made in a
notarial deed. (Constitutional Court
No. 69/PUU-XIII/2015 has issued
decisions that marriage agreement
may be made after marriage as long
as agreed by both parties)
Minimum Sale Price
of house or
condominium unit
(Limitation)
1 (one) house or
condominium unit
Range for new single house from
Rp 1 billion to Rp 10 billion, for
condominium unit range from Rp
750 million to Rp 3 billion.

29. Conflicting Regulation of Ownership of housing or
residential by foreigner in Indonesia
Foreigner
Ownership Issue
Horizontal Conflict Vertical Conflict

30. Conflicting Regulation of Ownership of housing or
residential by foreigner in Indonesia
Vertical Conflict
Right of use essentially authorizes the holder to use and/or
cultivate crops on land that is directly controlled by the state
or other parties that is not categorized as a lease or a land
utilization agreement. Land law (Law No.5 of 1960) does
not specifically stipulate the duration of right of use. It only
states that it can be for a definite term or as long as it is
used. Nevertheless, elucidation of the land law states that
foreigner and foreign legal entity can have right of use since
it only gives limited authority.

31. Conflicting Regulation of Ownership of housing or
residential by foreigner in Indonesia – Cont’d
Vertical Conflict
Since the new government regulation of 2015 stipulates the
duration of right of use is for 80 years, instead of 70 years.

32. Conflicting Regulation of Ownership of housing or
residential by foreigner in Indonesia – Cont’d
Vertical Conflict
According to the Condominium Law, the right of ownership over
a condominium unit (SHMSRS) means an individual right of
ownership a condominium unit built on HM, HGB, HP title over
state land, the HGB or HP over HPL, that separated from joint
rights over joint equipment, joint facilities and joint land.
New agrarian minister regulation of 2016, which is the lower ranked
regulation of Condominium Law, stipulates a new terminology of rights over
the condominium i.e. HP over condominium unit (HPSRS). It is a right of
ownership that is similar to rights of land that can be owned by a foreigner.
HPSRS has never been regulated on any highest regulation which makes it
deviated from the legal system hierarchy.

33. Conflicting Regulation of Ownership of housing or
residential by foreigner in Indonesia – Cont’d
Horizontal Conflict
The duration of right of use is conflicting with what has been
regulated under government regulation of 1996. If the new
regulation of 2015 is not rectified, land office and any other
government officials will interpret that for Indonesians, the right
of use is valid for 70 years, but for foreigner it is valid for 80
years. This is not only a conflict of provisions of regulations, but
violation of Indonesian’s fundamental rights.

34. Conflicting Regulation of Ownership of housing or
residential by foreigner in Indonesia – Cont’d
Horizontal Conflict
The government regulation of 1996 is only one of many
regulations that contradicts the new regulation of 2015. On the
same date i.e 28 December 2015, the government of Indonesia
also issued new regulation on special economic zone (Kawasan
Ekonomi Khusus). In this regulation, it is stipulated that the
duration of right of use for foreigner is given for 25 years and
can be renewed. On the same date, government issued several
regulations, regulating the same topic, but with two different
durations.

35. Thank You