The Procedure for Buying Property in Indonesia: Everything Foreigners Need to Know

Indonesia, particularly its picturesque island of Bali, attracts foreign real estate buyers with its stunning landscapes, developed infrastructure, and affordable prices.

This guide will walk you through all the important aspects of acquiring property in Indonesia, including the rights and obligations of foreigners, property search procedures, transaction processes, taxes, and additional costs.

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Since 2022, Indonesia has implemented the "Second Home Visa" program, which allows foreigners to obtain a residence permit (KITAS) for 5-10 years through investing in real estate or depositing at least 2 billion Rupiah (approximately 130,000 USD). Foreigners can also obtain residency under the following conditions:

• Entrepreneurship

• Retirement
• Digital nomadic lifestyle

When purchasing property, foreigners are required to pay all associated fees. Property owners must pay land and building tax (hak milik, hak guna). Income generated from renting out property is subject to income tax (withholding tax, PPH). Foreigners residing in Indonesia for more than 183 days per year become residents and are subject to income tax.

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The best way to start looking for property in Indonesia is to browse real estate databases on reputable property portals. You can filter properties by important parameters, save your favorites, and subscribe to alerts for new listings.

Another option is to apply for a property selection service tailored to your criteria. Realtors will send you selections of suitable options. It is recommended to research the local real estate market before purchasing.

Buying property in Indonesia involves several taxes and additional costs:

• Property transfer tax (PPN): 1-5% of the property value

• Land tax (PBB): Annual tax on land plots
• Building tax (IMB): Tax on the construction of new buildings
• Realtor's commission: Typically 2-5% of the property value
• Additional costs: Notary fees, registration fees, and legal services

Conclusion: Indonesia is an attractive real estate market for foreign buyers. Purchasing property in the country grants foreigners the right to reside and is a profitable investment. The property buying process is relatively simple and transparent, but it is important to conduct research and secure the support of an experienced realtor to ensure a smooth transaction.