Is Buying Property in Indonesia Expensive and Difficult ?

Buying property in Indonesia can be tricky.But if you play by the rules its a no worry.

How difficult is the property purchase process in Indonesia?
Individual foreigners can buy condominiums in Indonesia, though the formal law is slightly knotty. Foreigners can also buy control of landed property, though the legal difficulties are larger, and the degree of peace of mind attainable is correspondingly smaller.

Indonesia luxury vacation house
The basis for foreign ownership of strata-title residential property, i.e. condominiums, is Government Regulation No 41 of June 1996. Regulation 41/1996 is however unclear, and no foreigner has actually received a strata title as a certificate of ownership. In practice, foreigners sign a Convertible Lease Agreement by which the title is held in the name of the developer, while a lease is held for a definite period. The Convertible Lease Agreement states that, if and when prevailing laws and regulations permit ownership of strata titles by foreigners, both the lessor and the lessee will be obligated to sign a deed of sale and purchase, transferring title to the foreign owner.

Foreigners are not allowed to own freehold land. Nevertheless, they can acquire rights to the use of land but not ownership rights.

There are three options open to foreigners for buying in Indonesia:
1. Through an Indonesian representative
It is common practice to have an Indonesian representative acquire land for the foreign buyer. Ownership of land must be transferred from the previous owner to the Indonesian representative. For the foreign buyer’s security, three agreements must be entered into with the Indonesian representative.
  • Loan Agreement – this states that the foreign buyer lent the purchase price to the Indonesian representative.
  • Irrevocable Power of Attorney – this gives the foreign buyer full authority to sell, lease, mortgage, etc. the land.
  • Permanent Right of Use Agreement – this gives the foreign buyer full rights to the use and occupancy of the land.
2. Through a Penanaman Model Asing (PMA) Company
PMA is a “status of doing business” in Indonesia. A PMA company has 30 years to operate after formation. It can be granted additional 30 years, and another 30 years, if it expands its project through additional investment. This can be 100% controlled by a foreigner.

The Right to Build (Hak Guna Bangunan – HGB) is available to PMA companies. The right to build or construct on land is valid for 30 years. This can be extended for an additional 20 years, and even for another 30 years after that.

To set up a PMA company you will be required to:
  •     Submit a detailed business plan.
  •     Operate in a business environment that adds value to Indonesia in terms of foreign skills, employment and environmental benefit.
  •     Make an appropriate cash deposit in an Indonesian based bank. (The amount varies and is calculated from the capital employed in the business).
  •     Show the property investment as an asset of the company.

The process takes approximately 3 to 4 months and once completed the company can apply for work permits for the foreign directors, 3 permits in the first year of operation. The cost of setting up is around US$5,000.

3. Through a Leasehold Title
Indonesia luxury condominiums

This can be granted to qualified foreigners who are domiciled in Indonesia with a KITAS working visa. The lease runs for 25 years, and can be renewed for another 25 years.

It is important to hire the services of an Indonesian lawyer to assist with the transaction, especially with the monetary exchange. All land transactions must take place at the Indonesian Notary’s local office, Pejabat Pembuat Akta Tanah (PPAT), where the land is located.

While it may be natural to give a deposit, it is not advisable. There is no code of conduct for real estate firms in Indonesia; they do not have any legal obligation to protect the buyer’s interests and guarantee the title.

There are registered and unregistered lands in Indonesia. The Basic Agrarian Law of 1960 governs certified land, which is registered at the local land office. Unregistered land, Adat land, is community-owned. An examination of the land certificate being bought is important.

The whole process of registering property involves six procedures and takes around 22 days to complete.

Footnotes to Transaction Costs Table

Transfer Tax:Transfer tax is levied on the sale of real property in Indonesia at a flat rate of 5%. The base is the transfer value of the property.

Sale and Purchase of Land DeedThe execution of the sale and purchase of Land Deed is made before Land Officials, namely a notary public appointed by the Head of the National Land Office (PPAT) or a local Head of a District (Camat PPAT). The cost is 1% of the property value.

Legal Fee:Legal fees are negotiable. Processing fees for legal documents are at around 0.5% to 1.5% of the property value.

Registration Fee:The registration fees are around 0.20% of the property value. Registration fees include administrative fees and stamp duty of IDR6,000 (US$0.45) per document.

Land and Building Transfer Duty (BPHTB)The land and building transfer duty is levied at a flat rate of 5%, and is charged to the seller. The tax base is the transfer value of the property. There is a non-taxable amount which varies per region, and the non-taxable amount is IDR80 million (US$5,944) in Jakarta. This tax is different from the transfer tax.

Property Value     IDR     2,300,000,000
Less:     Tax-Exempt Amount     IDR     80,000,000
=     Taxable Value     IDR     2,220,000,000
Tax on Acquisition of Land and Building     5%     111,000,000.00

Real Estate Agent´s Fee
Real estate agent´s fee is around 5% of the property value. The fee is paid by either the buyer or the seller, but not both.

Original Article :
Buying costs are very high in Indonesia

Why Indonesian Property is looking good in 2017

The president has signed the Government Rule (Peraturan Pemerintah - PP) number 64 of Year 2016 regarding the development of housing for the low income.

The goal is to expedite and accelerate the process of providing housing for the low income citizens.

What the rule says : reduce the days of applying accordingly to regulations from 900 to 40 days. Reduce which use to be 33 legal documents as a requirement to only 11.

And lastly give authority to the municipal government on each city and kaybuwpayten (help me with the English translation of kabupaten) to issue the documents.

So that's it folks.

Indonesia's Property prospect for 2016

Property prospect for 2016 in Indonesia is the one of the highest valuable information that people are finding out. The trend of the rupiah against the dollar shows that a steady increase is going on.

Before 2016, the property cycle occurs and moving and the hardships of 2014 and 2015 will pay off in 2016.

Accurate reference of what will happen in 2016 is shown by what this feller Ali T said. He is the Indonesia Property Watch director.
"Property market is in a waiting position and is entering an acceleration in 2016. It is not true that the property market is experiencing crash. What is true is that the property market is in a take off position"

Housing market development has grew significantly high 120% (indicated by housing credit/KPR) just by 2010 to 2012. And slowly went down in 2013 to 2015.

Case Study 

This peace of property down here in this place called Bandung, is making headlines because PEOPLE ARE JUST WAITING IN LINE to GET THE PEACE OF THIS PROPERTY.

So what so special about this peace of property, For beginners after just a friend of mine invested for a year for 500 million rupiahs in December 2014 for a 31 m2 type room, it went 630 million just for a year, That's 20% return on investment just holding the property.

Turned out it will have a high class Mall, a Water-boom facility and all these only minutes away from the toll road in the prestigious Pasteur Area. Near approximately every where, easy for travelers heading back to Jakarta.  As mentioned on Tips in Buying an Apartment, you will see that it is a good choice.

Gateway Pasteur, Just Awesome

Turned out also that the Bandung jet-set society bought a peace of property here. So actually you are buying a membership of society. There will be around 2100 rooms, and some townhouses in the area. An irresistible property to have,  and a guaranteed great investment.

So property in Indonesia is confirm will boom in 2016. So take your action immediately.

Property Analyst

The 10 Types of Work when hiring a property consultant

So what are the big boys in property consulting offering these days if you have an abundance worth of property. These are the type of work . People also use consultants to find Bandung Property if they wanted to invest there.

So here are the The 10 Types of Work when hiring a property consultant

Market & Marketability Study
The Study that gives an analysis of what is the current market situation of a specific type of property, and how to market should you decide to invest in such type of property

Highest & Best Study
From the name of it you will understand the proximity of facilities in the designated location for example a peace of land you bought or in a process of pitched by the sales. The study will analyze the maximum Return On Investment (ROI) for the utilization of that certain property. It also identify and map whether such use are existing nearby.

Development Feasibility Study
As an investor of property when its a go for development for example a residential of commercial complex. The calculated ROI, IRR based of important assumptions of Capex (Capital Expenditure) and OPEX (operating Expenditure) with assumptions usually from other studies such as Market Study.

Corporate Finance
Gives a hint on how to finance your property in a sensible way, prudently using to create a balanced cash-flow that can give healthy growth utilizing internal finance or external ones.

Corporate Valuation
The study that will measure the current value of the property or company based on several things such as the generated cash flow. Or the future income based on existing plan which is currently in the development phase.All done to give a bottom line value of the property

Debt Restructuring Plan
Your property and your company has large debt and cant pay all of it at once. So an expert must help to analyze a restructuring plan or a rescheduling payment plan which is feasible and can affordable for the company.

Picture source :
Due Diligence
In short terms is checking if everything is cool. The financing of the property,the property manager's competence to run the business, the legal aspects. If it is only legal they call it legal due dilligence. Like a audit but more complex.

Sales & Investment
The consultant's service of helping boost sales for the owner. A targeted number is usually a written target and the consultant must create a Sales Plan and execute it.A consultant can also sell by offering to their existing network.

Market & Communication
Marketing and creating a communication campaign to target the segment that is the objective. Market theory suggest that each segment has a different marketing mix (Product, Price,Place,Promotion) because each product could have different positioning of product.For example : minimalist architecture with luxurious facilities for students is positioned for students demography.

Property Asset Management
Managing a property consist of plenty activities. The goal is how to operate efficiently utilizing i.e service charge income and other income to maintain the property value or increasing it by excellent service.Consultation is also given for plans for the asset that generates optimum value.



Ever wondered where the best valued apartment in Bandung would be ? That place where you would not hesitate a bit in investing your money and your time ? 

Look no more.

Pasteur Gateway Apartments. 
The number one High End Apartment Complex in Bandung  when you are searching Bandung Property with UNBELIEVABLE profits return. Why. Its just right in front of Pasteur Street. The Gateway Pasteur Apartments are really the gate way to Bandung. 

Just holding on to the apartment after purchase and not renting it will give you a WHOPPING return on investment up to 20% a year. Not kidding, they are actual figures.

What about other apartments in Bandung ? They are also good investment, but the growth of value of this one is eye-catching and amazing.Because it is in the front of Bandung. So close to the pathway toll road to Jakarta which will make you easy to take off out of Bandung.

An the amenities and facilities. I do not have to explain : Luxurious Shopping Mall, Waterboom Facility, swimming pools, gyms, clubs, you name it, its there. Its a preference for foreigners renting cause of its relative closeness to the toll road. (RIGHT IN FRONT OF IT !), No hustle and bustle traffic beyond jamming in Bandung to get to your apartment..

So when your investing in property you gotta be smart. It's call spatial relative recognition to facilities.


1. What is the reputation of the developer ? The dollar is high againts the rupiahs are they still developing? Do they get complaints? Or litigations ? Conduct a background check.

2.  Is it a real apartment or what they call 'rusunami' housing faclity for middle low ? why this RUSUNAMI trap has many people FLOCKING in buying what they thougt to be apartments, and when they decided to go there : THERE ARE LITTLE to NO PARKING LOTS for your car or your tennants car. Cause its actually designed for THE NOT SO WEALTHY, which sorry to say may can not afford to by a for wheel vehical. So check what is the capacity of the parking lot.

3. Ask how many is the service charge ? Is it reasonable ? because it is an expense later for you. Be sure you are aware of what kind of charges there are for you. So you can calculate how much would you list for your apartment for rent.

4. After receiving the key, install your kitchen set. And set your room in a minimalistic interior design.customers like that. Install ethnic art will also boost the price. And make sure it is always clean and tidy.

5. Create good relations with your Realtor or the sales person. Make him the rental sales person for you too. He or she will take care of your property. Create good relationship to the property
management team too. Security, the manager. It won't hurt to have more friends in your circle.

6. Like I said spatial relative recognition. Something I learned in this property school by this dude named Panangian . How far is the distance to a hospital, a university, shopping center, the police station, the traditional market and last but not least THE TOLL ROAD.

7. Find the latest technology to market your apartment, Utilize high ranking sites or blog like this blog, and market it in apps. Did you know that there is such a thing as AIRBnB ? Its a listing app for people that want to rent their property so people can easily reach them.

So happy hunting for your property. And hope you have a nice Return On Investment.