KITAS/KITAP and Property Ownership in Indonesia: What Residence Permits Allow

Why Residence Permits Matter for Property

Under Government Regulation No. 103 of 2015 (PP 103/2015), foreigners can only obtain Hak Pakai (Right to Use) over residential property if they hold a valid residence permit: either a KITAS (Kartu Izin Tinggal Terbatas, Limited Stay Permit) or KITAP (Kartu Izin Tinggal Tetap, Permanent Stay Permit).

Without a residence permit, your options are limited to leasehold or a PT PMA corporate structure.

KITAS (Limited Stay Permit)

Types of KITAS

Under the Immigration Law No. 6 of 2011 and its implementing regulations, KITAS is issued for several purposes: work (sponsored by an Indonesian employer), investment (through BKPM), retirement (for those 55 or older), second home visa (introduced in 2022 for high-net-worth individuals), family dependents (spouse/children of KITAS/KITAP holders), and education.

The Second Home Visa (KITAS)

The Second Home Visa, introduced under Government Regulation No. 48 of 2023, is particularly relevant for property investors. It allows foreigners to stay in Indonesia for up to 5 years (renewable). Requirements include proof of sufficient funds (minimum IDR 2 billion in savings or investments, approximately $125,000 USD), health insurance, a clean criminal record, and a statement of intent.

This visa does not require employment in Indonesia, making it suitable for retirees, remote workers, and investors.

Retirement KITAS

For foreigners aged 55 or older. Requirements include proof of pension or passive income (minimum $1,500 USD/month), health insurance valid in Indonesia, a rented or owned property in Indonesia, and employment of at least one Indonesian household worker.

The retirement KITAS is issued for one year and renewable annually.

KITAS and Hak Pakai

Any valid KITAS qualifies the holder for Hak Pakai under PP 103/2015. The Hak Pakai application is submitted to BPN with a copy of the KITAS.

Critical point: if your KITAS expires and is not renewed, your Hak Pakai right may be affected. Under Article 49 of Government Regulation No. 40 of 1996, Hak Pakai held by a foreigner can be revoked if the foreigner no longer meets the residency requirements. In practice, BPN does not actively police this, but it creates legal vulnerability.

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KITAP (Permanent Stay Permit)

Eligibility

KITAP is available to foreigners who have held a KITAS for at least five consecutive years (or three years for spouses of Indonesian citizens), spouses of Indonesian citizens, and children born of mixed Indonesian-foreign marriages.

KITAP and Hak Pakai

KITAP holders have stronger Hak Pakai rights because the permit is permanent (renewable every five years for administrative purposes). There is no risk of the permit lapsing and affecting property rights.

Application

Apply through the Directorate General of Immigration (Direktorat Jenderal Imigrasi) at https://www.imigrasi.go.id. Processing involves submission of application with KITAS history, interview, background check, and decision.

Property Ownership Without a Residence Permit

Foreigners without KITAS/KITAP can still access Bali's property market through leasehold (Hak Sewa, no permit needed), PT PMA (no personal permit needed, though the company must have proper business licenses), and short-term rental agreements.

Practical Considerations

Maintaining Your Permit

Keep your KITAS/KITAP current. Set calendar reminders for renewal deadlines. If your permit lapses, your Hak Pakai becomes legally vulnerable.

Immigration Reporting

KITAS/KITAP holders must report to the local immigration office annually. Failure to report can result in permit revocation under the Immigration Law.

Tax Implications

Holding a KITAS/KITAP and spending 183+ days in Indonesia makes you an Indonesian tax resident, subject to worldwide income taxation under Law No. 7 of 1983 on Income Tax (as amended by Law No. 7 of 2021 on Harmonization of Tax Regulations). Indonesia's progressive income tax rates reach up to 35%.

For residence permit and property ownership guidance in Indonesia, Bektu provides resources at https://bektu.com.

Sources

- Immigration Law No. 6 of 2011: https://www.imigrasi.go.id

- PP 103/2015: https://peraturan.bpk.go.id

- PP 48/2023 (Second Home Visa): https://peraturan.bpk.go.id

- BPN: https://www.atrbpn.go.id

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