Indonesia, a vibrant archipelago known for its rich culture and stunning landscapes, has witnessed remarkable growth in its real estate sector over the past decades. In 2022, the real estate industry contributed a significant 2.5 percent to Indonesia’s GDP.
Investment Potential for All
Whether you are a local resident or a foreign investor eyeing Indonesia’s real estate, the opportunities are vast. As an investor, you’ll encounter two primary options for property acquisition: leasehold and freehold.
Freehold: A Symbol of Ownership
Freehold, locally known as Hak Milik, stands out as the most comprehensive and potent form of land title ownership in Indonesia. It provides the buyer with indefinite ownership rights, offering a strong foundation for long-term investment strategies.
However, only Indonesian citizens can individually acquire freehold property. Foreigners, eager to tap into this ownership model, can still do so by establishing a company called PMA as an alternative.
Leasehold: A Cost-Effective Alternative
Leasehold property, a compelling alternative, is owned by a leaseholder for a predetermined period, typically spanning 25 to 35 years with offered extension.
In comparison to freehold, leasehold properties are generally more affordable, making them an attractive option for investors.
Moreover, leasehold properties in Bali maintain the land title under the original owner’s ownership, ensuring a secure and transparent transaction. The lessee benefits from lower upfront costs or simple leasehold transaction at the notary.
Leasing relieves individuals of the long-term commitment associated with freehold ownership, allowing them to immediately receive the benefits of the property without the indefinite ownership rights.
In summary, the real estate market in Indonesia stands as a global investment hub.
Understanding the differences between freehold and leasehold properties is crucial for making informed investment decisions. As the country continues to flourish, the Indonesian real estate landscape promises a plenty of opportunities for those who seek to venture into its dynamic market.
Whether you opt for the enduring a freehold or leasehold option, we at Lasette Real Estate are inviting you to be part of its exciting real estate journey.
