Owning Apartments In Indonesia as Foreigner

[Markit]

Can anyone please help me out with the laws on the above?

Didn't they recently make some new laws allowing foreign ownership of apartments?

 

[spicyayam]

Another significant change under the Omnibus Law is permission for foreigners to own apartments under a Freehold Title Certificate for Apartment Unit (Sertifikat Hak Milik atas Satuan Rumah Susun), which may be built on top of a land under a Right to Build and a Right to Use.

Although this change is certainly welcomed, it conflicts with the current regime that allows a foreigner to only own apartments under a Right to Use Title for Apartment Unit. In addition, despite being promising for property developers, the Omnibus Law essentially limits foreign ownership only to apartments in the Special Economic Region, Free Trade and Port Zones, Industrial Area, and other economic area, which is not defined in the Omnibus Law.

The Omnibus Law also does not specify the type of permit that a foreigner must hold to be eligible to hold a Freehold Title for Apartment Units. While the existing law stresses the benefits that a foreigner must bring for Indonesia before being entitled to hold propriety rights, the Omnibus Law leaves the issue open; hence giving the possibility that foreigners holding a residence permit under Article 48(3) of the Immigration Law (Law No. 6 of 2011) and Article 2(2) of the Foreign Ownership of Residential House Regulation (Government Regulation No. 103 of 2015) can hold a Freehold Title of Apartment Units in Indonesia.

Allowing foreign ownership of a Freehold Title Certificate for Apartment Unit itself does not contradict the Agrarian Law (Law No. 5 of 1960) and the Apartment Law, as both laws are silent on foreign ownership of an apartment unit. However, from a legal perspective, allowing foreign ownership of an apartment unit built on top of land under a Right to Build is contrary to the existing foreign ownership rule under the Agrarian Law, which limits foreigners only to hold a Right to Use certificate over land. That being said, the permission of foreigners to hold a Freehold Title for Apartment Units would not be feasible unless a comprehensive and thorough complementing regulation is issued to clarify the existing uncertainties.

Assegaf Hamzah and Partners . The Omnibus Law: Whats Next for the Real Estate Market?

 

[AuroraB]

Please refer to: Government Regulation No. 18 of 2021 on Management Rights, Land Rights, Apartment Units, and Land Registration:

Looks like this new regulation comes with a number of caveats as I highlighted in red font below...

See brief summary below taken from:

Indonesia: Government Issues Regulations on Rights over Land, Underground Space and Abandoned Land

On 2 November 2020, President Joko Widodo enacted Law No. 11 of 2020 on Job Creation ("Omnibus Law"), which took effect on the same day. Our comments on the Omnibus Law can be found ...

insightplus.bakermckenzie.com

Changes to GR 103/15 (Foreigners to Own Strata Titles)
Right of Foreigners to Own Strata Title of an Apartment
GR 18/21 allows:

• foreign citizens with the relevant permit
• foreign legal entities with a representative office in Indonesia
• representatives of foreign countries
• international institutions,

to own strata title right of ownership of apartment units or SHMSRS (sertifikat hak milik atas satuan rumah susun).

Strata Title on Top of a Right to Build Land Title
Under GR 103/15, foreigners with stay permits were only able to own land under Right to Use land title and strata title right to use apartment units or SHPSRS (Sertifikat hak pakai atas satuan rumah susun). SHPSRS is an ownership of strata title on top of common land with a Right to Use (Hak Pakai) land title where the apartments are constructed.

With GR 18/21, foreigners with stay permits can also own strata title right of ownership of apartment units or SHMSRS. SHMSRS is ownership of strata title on top of a Right to Build title of the common land where the apartments are constructed. Foreigners can also now own Right to Use land title given on top of Right to Manage land title.

The strata title on top of a Right to Build or Right to Use (SHMSRS) can only be owned by foreigners if the strata titles are built in:

• specific economic zones
• free trade and free port zones
• industrial zones
• other economic zones.

Foreigners can be granted the strata title on top of a Right to Build or SHMSRS and strata title right to use apartment units or SHPSRS.

Ownership Limit and Time Period
Ownership of residential housing for foreigners is granted with limitations on:

• price (a minimum price applies)
• land area
• number of land parcels or strata titles
• its designation for residential purposes.

A ministry of Agrarian and Spatial Planning regulation will be issued to further regulate this matter.

Reference, official regulation:
https://peraturan.go.id/common/dokumen/terjemah/2021/Lembaran Lepas Batang Tubuh ATR 18.pdf

 

[Markit]

Please refer to: Government Regulation No. 18 of 2021 on Management Rights, Land Rights, Apartment Units, and Land Registration:

Looks like this new regulation comes with a number of caveats as I highlighted in red font below...

See brief summary below taken from:

Indonesia: Government Issues Regulations on Rights over Land, Underground Space and Abandoned Land

On 2 November 2020, President Joko Widodo enacted Law No. 11 of 2020 on Job Creation ("Omnibus Law"), which took effect on the same day. Our comments on the Omnibus Law can be found ...

insightplus.bakermckenzie.com

Changes to GR 103/15 (Foreigners to Own Strata Titles)
Right of Foreigners to Own Strata Title of an Apartment
GR 18/21 allows:

• foreign citizens with the relevant permit
• foreign legal entities with a representative office in Indonesia
• representatives of foreign countries
• international institutions,

to own strata title right of ownership of apartment units or SHMSRS (sertifikat hak milik atas satuan rumah susun).

Strata Title on Top of a Right to Build Land Title
Under GR 103/15, foreigners with stay permits were only able to own land under Right to Use land title and strata title right to use apartment units or SHPSRS (Sertifikat hak pakai atas satuan rumah susun). SHPSRS is an ownership of strata title on top of common land with a Right to Use (Hak Pakai) land title where the apartments are constructed.

With GR 18/21, foreigners with stay permits can also own strata title right of ownership of apartment units or SHMSRS. SHMSRS is ownership of strata title on top of a Right to Build title of the common land where the apartments are constructed. Foreigners can also now own Right to Use land title given on top of Right to Manage land title.

The strata title on top of a Right to Build or Right to Use (SHMSRS) can only be owned by foreigners if the strata titles are built in:

• specific economic zones
• free trade and free port zones
• industrial zones
• other economic zones.

Foreigners can be granted the strata title on top of a Right to Build or SHMSRS and strata title right to use apartment units or SHPSRS.

Ownership Limit and Time Period
Ownership of residential housing for foreigners is granted with limitations on:

• price (a minimum price applies)
• land area
• number of land parcels or strata titles
• its designation for residential purposes.

A ministry of Agrarian and Spatial Planning regulation will be issued to further regulate this matter.

Reference, official regulation:
https://peraturan.go.id/common/dokumen/terjemah/2021/Lembaran Lepas Batang Tubuh ATR 18.pdf

As I suspected: completely unreadable for normal humans and with so many "whens" and "buts" it's basically impossible to find a solid answer.

But thank you for trying.

Illegal is much easier...