Property Ownership by Foreigners or Their Heirs Who Have Left Indonesia

The Ministry of Law and Human Rights (“Ministry”) has issued Regulation No. 23 of 2016 on Foreign Citizens or Their Heirs as Owners of Residential Property Who Are No Longer Domiciled within Indonesia (“2016 Regulation”).The 2016 Regulation is basically an implementation of Article 10 of Government Regulation No. 103 of 2015 on the Ownership of Residential Property by Foreign Citizens (“Government Regulation”), [1] which required further provisions to be set out regarding the status and treatment of the ownership of residential property by any foreign citizens or their heirs who leave Indonesia for a period of at least one year. [2] The 2016 Regulation is of relevance to both foreign citizens and their heirs who own residential property within Indonesia.Property Ownership StatusIn line with the Government Regulation, the 2016 Regulation stipulates that foreign citizens who live, work or invest in Indonesia, or who are generally of benefit to the country, are entitled to own houses or residences under the right-to-use (hak pakai) land title. [3] Generally, the right-to-use land title encompasses the right to use and/or collect produce from plots of land, which are either directly owned by the government or by any Indonesian citizen who is in possession of a freehold (hak milik) title. [4] However, any such foreign citizens must relinquish or transfer their property-ownership rights to eligible parties according to applicable laws and regulations, should they leave Indonesia for a period of one year (i.e. commencing from the date that the foreign citizens’ travel documents are stamped by an official immigration authority). This obligation also applies to the heirs of such foreign citizens. [5] As additional information, the Government Regulation specifies a number of measures which will be applied to any foreign citizens or their heirs who fail to relinquish or transfer their property ownership rights during the one-year period outlined above, as detailed below: [6]