Indonesia

The benefits of living in Indonesia

 

Indonesia is the largest state in Southeast Asia. The country attracts visitors with its climate, culture, and magical landscapes—ranging from volcanoes and rice terraces to lush tropical forests and waterfalls. However, Indonesia is increasingly being associated not with exotic vacations, but with active interest from international investors in real estate. The country is classified as one of the most promising and ranks 7th in the world in terms of GDP. By 2030, Indonesia's economy is expected to enter the top 5 economies in the world. Independence and neutrality are the principles of the country's foreign policy. The official language is Indonesian, but English is also commonly used.**

 

Locations Where It’s Worth Buying Real Estate

 

Bali is undoubtedly the leader in popularity among tourists. In the first half of 2023, the island welcomed 7 million visitors. Its comfortable climate, miles of beaches, and developed infrastructure attract vacationers, families with children, and digital nomads who choose the island as their winter destination. However, Lombok, Java, and Sumatra are also actively developing and offer excellent conditions and prospects for investors.

 

Investment Potential of Real Estate

 

Indonesia offers a wide range of opportunities for purchasing residential and commercial real estate: villas with ocean views, secluded cottages, and apartments in hotels managed by major hospitality operators. The consistent year-round demand for rental properties and tourist accommodations makes the market attractive for rental investors. Analysts consider Indonesia's real estate market to be the most transparent and efficient in Asia. The average occupancy rate of rental properties in tourist locations is 70-80%. Rental yields range from 8% to 15% per annum, while the global average is around 5%.

 

Can Russians Buy Real Estate

 

Russians can freely purchase real estate in Indonesia either through Freehold ownership or through long-term leases with the possibility of extension without restrictions. Leasehold is a rental agreement for 35 years with subsequent renewal. All Leasehold transactions are notarized.

 

Real Estate Taxes

 

Taxes upon purchasing real estate include an 11% VAT and a notary fee of 1%. When purchasing real estate in installments, VAT is included in the payments under the purchase agreement. The notary fee is paid when signing the contract with a notary. It is important to note that according to Indonesian law, property rental management is handled by management companies rather than individual investors.

 

Residence Permit or Passport

 

In Indonesia, there are two types of documents: KITAS and ITAS. KITAS is a one-year residence permit that allows foreigners to live and work legally in the country. ITAS is a "second home visa" for foreign investors valid for 5-10 years. To obtain an ITAS, one must have $135,000 in an Indonesian bank account or own property valued at $135,000 or more.