50 Useful Indonesian Property and Real Estate Terms

Navigating the property market in other countries can feel like embarking on an exciting but slightly daunting adventure. Unfamiliar procedures and a whole new vocabulary can make the process seem overwhelming, especially for expats.

The same terms can also be applicable when you search for property in Indonesia, too.

Indonesian property market has its own unique language. Therefore, to help you decipher the jargons and make informed decisions, we’ve compiled this comprehensive glossary of essential terms..

Why is Understanding Indonesian Property Terms Important?

Knowing the local terminology helps you communicate effectively with agents, sellers, and other parties involved in the property transaction.

Additionally, familiarity with these terms instils confidence and simplifies communication between parties involved. Clear and effective communication fosters a better understanding of expectations and requirements, leading to smoother and more efficient property transactions. By ensuring all parties are on the same page, misunderstandings and potential disputes can be minimised, resulting in a more harmonious and successful property transaction experience.

Transactional Property Terminologies

1. DP / Uang Muka (Down Payment)
   The initial payment you make when purchasing a property. It’s a percentage of the total price, typically 10-30%, and shows your commitment to buying the property.
2. Cicilan (Instalment)
   These are the regular payments you make to pay off your mortgage loan. Instalments usually occur monthly and include both principal (the original loan amount) and interest.
3. Wanprestasi (Default)
   This occurs when a buyer fails to fulfil their contractual obligations, such as missing mortgage payments or violating the terms of the sale agreement. It can lead to penalties or even the loss of the property.
4. BI Checking (Bank Indonesia Checking)
   This is a credit check conducted by Bank Indonesia (Indonesia’s central bank). It assesses your creditworthiness and helps lenders determine your eligibility for a mortgage loan.
5. Arus Kas (Cash Flow)
   For investment properties, this refers to the net income generated by the property after deducting all expenses, including mortgage payments, taxes, and maintenance costs.
6. Amortisasi (Amortization)
   This is the process of gradually paying off a loan over time through regular instalments. Each payment is divided between reducing the principal amount and paying the interest accrued.
7. BPHTB (Bea Perolehan Hak Atas Tanah dan Bangunan)
   This is a tax levied on the acquisition of land and building rights. It’s a one-time payment made when you purchase a property and is usually a percentage of the property value.
8. Investasi (Investment)
   This broadly refers to allocating money into property with the expectation of generating future income through rental yields or capital appreciation (increase in property value).
9. Bunga (Interest)
   This is the cost of borrowing money for your mortgage. It’s calculated as a percentage of the outstanding loan amount.
10. Bunga Tetap (Fixed Interest)
    With a fixed interest rate, your mortgage payments remain the same throughout the loan term, providing stability and predictability.
11. Bunga Mengambang (Floating Interest)
    A floating interest rate fluctuates based on market conditions, which means your mortgage payments can increase or decrease over time.
12. FLPP (Fasilitas Likuiditas Pembiayaan Perumahan)
    This is a government-subsidised mortgage program designed to make housing more affordable for low-income earners. It offers lower interest rates and longer loan tenors.
13. KPR (Kredit Pemilikan Rumah)
    This is a mortgage loan specifically for purchasing a house.
14. KPA (Kredit Pemilikan Apartemen)
    This is a mortgage loan specifically for purchasing an apartment.
15. KPT (Kredit Pemilikan Tanah)
    A loan specifically for purchasing land.
16. IPL (Iuran Pengelolaan Lingkungan)
    This is a recurring fee paid by residents in an apartment complex or gated community to cover the costs of maintaining shared facilities and common areas.
17. NJOP (Nilai Jual Objek Pajak)
    This is the government’s assessed value of a property, used to calculate property taxes (PBB).
18. Over Kredit (Loan Takeover)
    This involves taking over someone else’s existing mortgage on a property. It can be a way to purchase a property without needing a new mortgage.
19. Subsidi (Subsidy)
    This refers to government financial assistance provided to make housing more affordable. It can take various forms, such as down payment assistance or interest rate subsidies.
20. SBDK (Suku Bunga Dasar Kredit)
    This is the base lending rate set by banks, which influences the interest rates offered on various loans, including mortgages.
21. Tenor (Loan Term)
    This is the duration of your mortgage loan, typically ranging from 5 to 20 years. A longer tenor results in lower monthly payments but higher overall interest paid.

Also read: Get To Know How Foreigners Can Buy Property in Indonesia

Business Property Terminologies

1. BTN (Bank Tabungan Negara)
   This is a prominent state-owned bank in Indonesia that specializes in housing finance. They offer various mortgage products and services to individuals and developers, playing a significant role in the Indonesian property market.
2. PT (Perseroan Terbatas)
   This is the Indonesian equivalent of a limited liability company (LLC). It’s the most common type of legal entity used for businesses in Indonesia, including those involved in property development and real estate.
3. PT PMA (Penanaman Modal Asing)
   This refers to a Foreign Investment Company. It’s a specific type of PT that allows foreign ownership and investment, subject to certain regulations and requirements.
4. Pengembang (Developer)
   A property developer is a company or individual involved in the development and construction of real estate projects, such as residential complexes, commercial buildings, or mixed-use developments.
5. Agen Properti (Real Estate Agent)
   A real estate agent acts as an intermediary between buyers and sellers of property. They help clients find suitable properties, negotiate deals, and navigate the transaction process.
6. Arsitek (Architect)
   An architect is a licensed professional who designs buildings and oversees their construction. They play a crucial role in ensuring the functionality, safety, and aesthetics of a building.
7. TAPERA (Tabungan Perumahan Rakyat)
   This is a government-managed housing savings program designed to help people save for a down payment on a house. It’s similar to a provident fund specifically for housing.
8. BPN (Badan Pertanahan Nasional)
   This is the National Land Agency of Indonesia. It’s the government body responsible for land registration, issuing land titles, and managing land administration matters.
9. Investor (Investor)
   In the property context, an investor is an individual or entity that puts capital into real estate with the expectation of generating income or appreciation. They may invest in residential, commercial, or industrial properties.
10. Kantor (Office)
    This simply refers to office space, which can be a single room, a suite, or an entire building used for business operations.
11. Okupansi (Occupancy)
    Occupancy rate is the percentage of occupied units in a building or development. It’s a key metric used to assess the performance of rental properties, hotels, and other types of real estate.
12. Anchor Tenant
    In a shopping mall or commercial complex, an anchor tenant is a major tenant, often a well-known brand or department store, that attracts customers and drives traffic to the development.
13. KPPA (Kantor Perwakilan Perusahaan Asing)
    This is a representative office of a foreign company in Indonesia. It can engage in marketing and promotional activities but cannot directly generate revenue.
14. Sertifikat (Certificate)
    A property certificate is a legal document that proves ownership of a property in Indonesia. There are different types of certificates, each with varying ownership rights.
15. Notaris (Notary)
    A notary is a public official authorized to authenticate legal documents, including property deeds, contracts, and agreements. They play a crucial role in ensuring the legality and validity of property transactions.

Property Legal Terms & Documentation

1. KLB (Kelayakan Lingkungan Bangunan)
   This refers to the environmental feasibility of a building or construction project. It’s an assessment of the project’s potential impact on the surrounding environment and a requirement for obtaining building permits.
2. SLF / KMB (Sertifikat Laik Fungsi / Kelayakan Membangun Bangunan)
   This is a Building Worthiness Certificate that confirms a building meets all safety and functional requirements for its intended use. It’s essential for obtaining an occupancy permit.
3. HGB (Hak Guna Bangunan)
   This is a “Right to Use Building” certificate, a type of leasehold title that grants the right to construct and use buildings on state-owned land for a specific period, usually 30 years but renewable.
4. HGU (Hak Guna Usaha)
   This is a “Right to Cultivate” certificate, a leasehold title granting the right to use land for agricultural, plantation, or other business purposes. It’s typically valid for 25 years and can be extended.
5. SHM (Sertifikat Hak Milik)
   This is a “Freehold Title,” the strongest form of land ownership in Indonesia. It grants the holder full and permanent ownership of the land.
6. IMB (Izin Mendirikan Bangunan)
   This is a building permit required before constructing or renovating a building. It ensures compliance with building codes and regulations.
7. IPB (Izin Penggunaan Bangunan)
   This is a permit to use an existing building for a specific purpose. It’s required when changing the usage of a building or when the IMB has expired.
8. HPL (Hak Pengelolaan Lahan)
   This is a “Right to Manage Land” certificate, typically held by the government or state-owned enterprises. It grants the holder the right to manage and utilize state-owned land.
9. Girik
   This is an older, less secure type of land ownership document. It’s gradually being replaced by more modern certificates like SHM.
10. PPAT (Pejabat Pembuat Akta Tanah)
    This is a Land Deed Official, a type of notary public specializing in land transactions. They are authorized to prepare and legalize land deeds and other property-related documents.
11. SIPPT (Surat Izin Penunjukan Penggunaan Tanah)
    This is a permit that designates land for a specific use, such as residential, commercial, or industrial.
12. SIUP (Surat Izin Usaha Perdagangan)
    This is a Trading Business License required for companies engaged in trading activities.
13. NIB (Nomor Induk Berusaha)
    This is a unique business identification number issued to all businesses in Indonesia. It’s a mandatory requirement for various business activities and transactions.
14. SPPT (Surat Pemberitahuan Pajak Terutang)
    This is a tax notification letter issued by the tax authorities, informing taxpayers of their tax obligations, including property tax (PBB).
15. TDP (Tanda Daftar Perusahaan)
    This is a Company Registration Certificate issued by the government, confirming that a company is legally registered and recognized.

Property Type Terminologies

1. Ruko (Rumah Toko)
   This combines “rumah” (house) and “toko” (shop). It’s essentially a shophouse – a building with a shop or commercial space on the ground floor and residential living space above. Rukos are common in Indonesia, often found along busy streets.
2. Rukan (Rumah Kantor)
   Similar to a ruko, but instead of a shop, the ground floor is designed for office use (“kantor”).  It’s like a combined office and residence.
3. Ruang Kantor (Office Space)
   This simply refers to commercial space specifically designed for office use. It can be within a larger building, a dedicated office tower, or even a converted rukan.
4. Pondok Wisata (Guesthouse)
   This is a small-scale accommodation for tourists, usually with a more homely and intimate atmosphere than a larger hotel.  Think of it as a  “bed and breakfast” or a small inn.
5. Rumah Tapak (Landed House)
   This is a standalone house built on its own land. It’s detached from other buildings and typically has a yard or garden.
6. Kondotel (Condominium Hotel)
   This is a hotel where individual units are owned separately, like condominiums. Owners can use their unit or rent it out through the hotel management.
7. Fasos (Fasilitas Sosial)
   These are shared social facilities within a residential development, such as a swimming pool, playground, gym, or community hall.
8. Fasum (Fasilitas Umum)
   These are public facilities that serve the wider community, such as roads, drainage systems, public parks, or places of worship.
9. Apartemen (Apartment)
   A self-contained housing unit within a larger building.
10. Aparthouse
    A luxury apartment with hotel-like services and amenities, often offering concierge services, housekeeping, and other high-end features.
11. Indekos/Kos-kosan (Boarding House)
    These are rooms for rent, usually within a house or building, typically targeted towards students or young professionals.  They often offer basic furnishings and shared facilities.
12. Toko (Shop)
    A retail space for selling goods or services.
13. Survei (Survey)
    This refers to a property inspection, usually conducted by a potential buyer or their representative to assess the condition and features of the property.
14. Jaminan (Guarantee/Collateral)
    This is something of value used to secure a loan, often the property itself. If the borrower defaults on the loan, the lender can seize the jaminan to recover their losses.

Tax in Property

1. PBB (Pajak Bumi dan Bangunan)
   This is an annual property tax levied on land and building ownership in Indonesia. It is calculated based on the government-assessed value of the property (NJOP). Think of it as similar to council tax or property tax in other countries.
2. PPH (Pajak Penghasilan)
   This is income tax. In the context of property, it could apply to rental income earned from a property or capital gains from selling a property.
3. PPN (Pajak Pertambahan Nilai)
   This is Value Added Tax (VAT), a consumption tax levied on the sale of goods and services. In property, it usually applies to the purchase of new properties from developers.
4. PPJB (Perjanjian Pengikatan Jual Beli)
   This is a preliminary agreement for the sale and purchase of a property. It outlines the terms and conditions of the sale, including the price, payment schedule, and handover date. It is a legally binding agreement, but it is not the final deed of sale.

Locality

1. Panjer
   This refers to a traditional Balinese wall or fence, typically made of brick or stone. It is a common feature in Balinese architecture and is often used to enclose gardens or compounds.
2. Tanah Adat (Customary Land)
   This is land owned and managed according to local customs and traditions, particularly in areas with strong indigenous communities. It has specific ownership and usage rights that may differ from general land ownership laws.
3. Sengketa (Dispute)
   This refers to a legal disagreement or conflict regarding property ownership, boundaries, or rights. Property disputes can arise between individuals, communities, or even with the government.

Need More Than Just Understanding The Terms?

This glossary is just a starting point. There are many unique aspects to the Indonesian property market, making it crucial to seek professional guidance for important decisions.

To ensure a successful property investment in Indonesia, it is beneficial to consult with professional advisors who can enhance your understanding and assist you in smoothly navigating the process of finding your ideal property in Indonesia.

Lets Move Group is known for its top-notch consultancy and advice services for property search and ownership in Indonesia. The local experts have a wealth of knowledge about property trends and deals, and can customise this information to suit your specific requirements.If you need further guide about your property search in Indonesia, visit www.theletsmovegroup.com to access various services to help you find your perfect property in Indonesia.

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