Multi-Storey Housing for Foreigners, Here Are the Legal Provisions

PERTANYAAN

Can foreign citizens have ownership rights over flat units?

INTISARI JAWABAN

Basically, in Indonesia, there is a principle of ownership of land rights by Foreign Citizens known as the Prohibition of Land Seclusion, which means that land in Indonesia can only be owned by Indonesian legal entities or Indonesian individuals.

So, are foreigners absolutely unable to own property rights to land in Indonesia? What kind of ownership rights can foreigners obtain in Indonesia?

Please read the review below for a further explanation.

ULASAN LENGKAP

This article is an English translation of Rumah Susun untuk WNA, Begini Ketentuan Hukumnya, written by Renata Christha Auli, S.H., and published on Monday, 29 May 2023.

This article below is the third update of the article entitled Provisions for Property Rights on Flat Units for Foreigners, which is first published on 24 May 2013 and first updated on Tuesday, 31 August 2021, and secondly updated by Tri Jata Ayu Pramesti, S.H. on Thursday, 23 December 2021.

All legal information available on Klinik hukumonline.com has been prepared for educational purposes only and is general in nature (read the complete Disclaimer). In order to obtain legal advice specific to your case, please consult with Justika Partner Consultant.

Definition of Prohibition of Land Seclusion

Before answering your question, please note that there is a principle of ownership of land rights by Foreign Citizens adopted in Indonesia, namely the principle of "Prohibition of Land Seclusion" (in Bahasa Indonesia known as Larangan Pengasingan Tanah). Irma Devita Purnamasari in her book entitled Kiat-Kiat Cerdas, Mudah, dan Bijak Mengatasi Masalah Hukum Pertanahan explains that what is meant by the principle of "Prohibition of Land Seclusion" is that land in Indonesia can only be owned by Indonesian Legal Entities or Indonesian individuals. If we refer to this principle, of course, foreigners cannot own land in Indonesia (p. 41).

However, are foreigners absolutely unable to own land in Indonesia? What kind of ownership rights can foreigners obtain in Indonesia?

To answer this we need to refer to a number of regulations governing the ownership of land rights by foreigners. In the following, we will explain these regulations and answer your question about whether it is possible for a foreigner to obtain a title to a flat or multi-storey housing.

Provisions on Multi-Storey Housing Ownership for Foreigners

Flats are multi-storey buildings built in an environment that is divided into functionally structured parts, both in horizontal and vertical directions, and are units, each of which can be owned and used separately, especially for residential purposes equipped with shared parts, shared objects, and shared land.[1] Meanwhile, a flat unit, hereinafter referred to as Satuan Rumah Susun or “sarusun" in Bahasa Indonesia, is a flat unit whose main purpose is to be used separately with the main function as a place of residence and has means of connecting to public roads.[2]

Then, the regulation of ownership of property rights over a flat unit is related to the Flat Ownership Certificate. Therefore, to answer your question, we also need to know what is meant by Flat Ownership Certificate, as stipulated in Article 1 number 11 Law 20/2011 as follows:

Flat Ownership Certificate, is a proof of ownership of a flat on land of ownership rights, right of use of building or rights of use on state land, as well as the right of use of buildings or right of use on management rights land.

Furthermore, based on Article 144 section (1) letter c Perppu Cipta Kerja, ownership rights to a flat unit can also be given to foreigners who obtain a license in accordance with the provisions of applicable laws and regulations. Ownership of flat units by foreigners is only granted in Special Economic Zones, Free Trade Zones and Free Ports, Industrial Zones, and other economic zones.[3]

In addition, regarding the license referred to in the article above, Article 69 section (1) Government Regulation 18/2021 stipulates that foreigners who may own residency or occupancy are foreigners who own immigration documents in accordance with provisions of laws and regulations.

Meanwhile, the flats or multi-storey housing that can be owned by foreigners are limited to multi-storey housing that is built on the following plots of land:[4]

1. right-to-use or right-to-build over the State Land;
2. right-to-use or right-to-build over the Right-to-Manage Land; or
3. right-to-use or right-to-build over the freehold title Land.

The residency or occupancy ownership by foreigners shall also be granted with the following limitations:[5]

1. minimum price;
2. plot of land area;
3. number of plots of land or Multistory housing units; and
4. allotment for residency or occupancy

You can read more about these restrictions in the Regulation of the Minister of Agrarian Affairs and Spatial Planning/ National Land Agency 18/2021.

Also read: Foreigners May Purchase Residential Houses with the Following Minimum Prices

In conclusion, the right of ownership of a multi-storey housing unit can be given to foreigners who obtain a license in accordance with the provisions of applicable laws and regulations. Ownership of a flat unit by foreigners can also only be granted in Special Economic Zones, Free Trade Zones and Free Ports, Industrial Zones, and other economic zones. In addition, in the ownership of residential houses, foreigners are also required to have immigration documents in accordance with laws and regulations.

Enrich your legal research with the latest bilingual legal analysis, as well as the collection of regulatory translations integrated into Hukumonline Pro, click here to learn more.

These are the answers we can provide, we hope you will find them useful.

Legal Basis:

1. Law Number 20 of 2011 on Multi-Storey Housing as amended by Regulation of the Government in Lieu of Law Number 2 of 2022 on Job Creation which has been passed into law under Law Number 6 of 2023 on 21 March 2023;
2. Regulation of the Government of the Republic of Indonesia Number 18 of 2021 on Right-to-Manage, Land Titles, Multi-Story Housing Units, and Land Registration;
3. Regulation of the Minister of Agrarian Affairs and Spatial Planning/ National Land Agency 18/2021 on Procedures for Determining Management Rights and Land Rights.

Reference:

Irma Devita Purnamasari. Kiat-Kiat Cerdas, Mudah, dan Bijak Mengatasi Masalah Hukum Pertanahan. Bandung: PT Mizan Pustaka, 2010.

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[1] Article 1 number 1 Law Number 20 of 2011 on Multi-Storey Housing (“Law 20/2011”).

[2] Article 1 number 3 Law 20/2011.

[3] Elucidation to Article 144 section (1) letter c Regulation of the Government in Lieu of Law Number 2 of 2022 on Job Creation.

[4] Article 71 section (1) letter b Regulation of the Government of the Republic of Indonesia Number 18 of 2021 on Right-to-Manage, Land Titles, Multi-Story Housing Units, and Land Registration (“Government Regulation 18/2021”).

[5] Article 72 Government Regulation 18/2021.