Credit for foreigners

Conditions for applying for KPR for foreigners, is it allowed?

Conditions for applying for KPR for foreigners, is it allowed?

Not only Indonesian Citizens (WNI), Home Ownership Credit (KPR) facilities can now be enjoyed by Foreign Citizens (WNA). 

As is known, the government has given permission for foreigners to buy property in Indonesia. The provisions are contained in the ATR/BPN Ministerial Regulation (Permen) No.18 of 2021 concerning Procedures for Implementing Management Rights and Land Rights. 

It is stated in the regulation derived from Law No.11 of 2020 concerning Job Creation (Job Creation Law), that; 

Foreigners are allowed to own a landed house with right-of-use status built on state land, or a landed house with right-to-use status on freehold land or Management Rights (HPL). Apart from that, foreigners are also allowed to own flats or apartments that stand on land with Building Use Rights (HGB) status. 

Referring to these regulations, it can be ascertained that not all types of property can be purchased by foreigners, the same applies to ownership rights. 

Foreigners are not allowed to own property with a Certificate of Ownership (SHM). 

According to applicable regulations, property certified as freehold may only be owned by Indonesian citizens.

As mentioned above, foreigners can still apply to purchase a house and/or flat/apartment using a credit scheme. 

However, there are a number of terms and conditions that must be met when applying for a KPR for foreigners. 

Apart from that, the choice of banks providing mortgage facilities for foreign citizens is limited. 

Not all banking institutions in Indonesia provide KPR for foreigners. 

For information, here is a list of banks providing mortgages for foreign citizens.

1. Permata Syariah Bank

Bank Permata Syariah has a KPR service that can also be applied for by foreigners.

Terms and conditions for applying for a KPR by foreigners at Bank Permata Syariah include:

1. Employees have worked and resided in Indonesia for a minimum of 2 years

2. Have been running a business in this field for at least 4 years as an entrepreneur

3. The prospective debtor's net salary is a minimum of IDR 25 million per month (not joint income)

4. The minimum property price is IDR 2 billion

5. The proposed ceiling is a minimum of IDR 1 billion

6. The certificate must be SHGB, if the house certificate has SHM status, it must be downgraded first

7. Maximum LTV for KPR/KPA for foreigners = 60%

8. The proposed property must be ready stock.

2. Commonwealth Bank

KPR facilities for foreigners can also be obtained at Commonwealth Bank.

This banking institution from Australia offers home and apartment ownership loans with a ceiling of up to IDR 15 billion, and tenors ranging from 3-10 years.

The special requirements for foreigners to apply for this KPR are:

• Minimum age 21 years and maximum 60 years when credit ends

• One domicile in the city where the Commonwealth Bank is located (applies to residence, place of work and collateral area)

• Minimum length of work is 2 years

• SHGB property ownership status.

3. J-Trust Bank

Another bank option is J-Trust, which is a banking institution from Japan.

The advantages of J-Trust KPR are competitive interest rates and a tenor of up to 30 years.

The requirements for applying for a mortgage for foreigners at J-Trust include:

1. Indonesian citizens (WNI) or foreign citizens (WNA) domiciled in Indonesia

2. Minimum age is 21 years when the loan is applied for

3. Maximum age when credit ends

4. 55 years for officers/employees or (retirement age)

5. 65 years for entrepreneurs/professionals.

6. Have a job and income

7. Permanent employee/employee status with a minimum of 2 years of service, including accumulation with the previous company (for employees/employees)

8. Minimum 3 years experience in the same field (for professionals/entrepreneurs).

1. Temporary Stay Permit Card (KITAS)

• Foreigners who want to apply for a KPR must have official immigration documents, one of which is KITAS.

• This document, published by the Indonesian Ministry of Law and Human Rights, is an absolute requirement for applying for KPR for foreigners.

2. Profession

• Several banks providing mortgages for foreign nationals have their own provisions regarding the employment status of prospective foreign national debtors. 

• One of them is the Commonwealth Bank, which only allows foreigners who are private sector employees with a working duration of 2 years to apply for a KPR at this bank. 

• However, things are different with Permata Bank, which allows foreigners with entrepreneur status to apply for KPR.

• The conditions are that the foreigner has been in business for at least 4 years.

3. Loan Tenor

Generally, the loan tenor applied to KPR for foreigners is shorter than the length of the work contract and/or KITAS validity period.

1. Property Type

Referring to Article 186 of Ministerial Decree 18 of 2021, there are several categories of housing that foreigners can own, namely:

• Landed house:

• Houses in the luxury home category comply with statutory provisions

• One plot of land per person/family and/or

• The land has a maximum area of 2,000 square meters.

• Flats: Foreigners can own flats/apartments in the commercial category.

2. Property Price Terms

Apart from that, the government has also set a price limit for housing that foreigners can buy based on plotting per region, here are the details:

Minimum price of the property can buy by foreigners