Authored by the expert who managed and guided the team behind the Indonesia Property Pack
Everything you need to know before buying real estate is included in our Indonesia Property Pack
Buying land in Indonesia as a foreigner requires understanding specific legal structures since direct freehold ownership is not permitted.
However, foreigners can legally acquire land through Hak Pakai (Right to Use), Hak Sewa (Leasehold), or via a foreign-owned company (PT PMA) with Hak Guna Bangunan (Right to Build), providing long-term control for residential or investment purposes. Popular areas include Bali, Jakarta, and Lombok, with prices ranging from IDR 1-15 million ($61-$915) per square meter depending on location.
If you want to go deeper, you can check our pack of documents related to the real estate market in Indonesia, based on reliable facts and data, not opinions or rumors.
Foreigners cannot own freehold land in Indonesia but can acquire land through Hak Pakai (30-80 years), Hak Sewa (leasehold up to 80 years), or PT PMA company structures.
Popular regions include Bali (IDR 1-15 million per sqm), Jakarta (IDR 12.5 million per sqm), and Lombok, with mandatory KITAS/KITAP residence permits required for Hak Pakai purchases.
| Land Ownership Type | Duration | Requirements | Best For |
|---|---|---|---|
| Hak Pakai (Right to Use) | 30 years, renewable up to 80 years | KITAS/KITAP residence permit | Personal residential use |
| Hak Sewa (Leasehold) | Up to 80 years | No residency permit needed | Rental properties, vacation homes |
| PT PMA + Hak Guna Bangunan | 30 years, renewable up to 80 years | Foreign company establishment | Commercial development, investment |
| Average Price Range | IDR 1-15 million per sqm | Varies by location | Bali most expensive, rural areas cheapest |
| Total Costs | 5-10% of purchase price | Taxes, notary, legal fees | BPHTB tax 5%, notary 1-2% |
| Required Documents | Passport, KITAS, proof of funds | NPWP tax ID, land certificate | Marriage certificate if applicable |
| Physical Presence | Not always required | Power of Attorney possible | Recommended for inspections |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
What types of land can foreigners buy in Indonesia?
Foreigners cannot directly own freehold land (Hak Milik) in Indonesia, but three legal structures allow long-term land control.
Hak Pakai (Right to Use) is the most common option for personal residential use, granting land use rights for an initial 30 years, renewable for up to 80 years total. This requires a long-term residence permit (KITAS or KITAP) and is specifically designed for individual foreign residents.
Hak Sewa (Leasehold) allows foreigners to lease land for up to 80 years without requiring a residency permit. This structure works well for vacation homes, rental properties, or investment purposes, offering more flexibility than Hak Pakai.
Hak Guna Bangunan (Right to Build) becomes accessible when foreigners establish a PT PMA (foreign-owned company), making it suitable for commercial development, investment projects, or business operations. This option provides the most flexibility for larger-scale developments.
Each structure serves different purposes, with Hak Pakai being ideal for personal residence, Hak Sewa for investment properties, and PT PMA for commercial ventures.
Are there any restrictions for foreigners purchasing land in Indonesia?
Several significant restrictions apply to foreign land purchases in Indonesia, starting with the prohibition on freehold (Hak Milik) ownership.
Minimum property value thresholds exist for foreign buyers, with Jakarta requiring purchases between $195,000-$650,000, while other regions have different minimums. Hak Pakai purchases specifically require holders to possess KITAS, KITAP, or diplomatic visas - tourists cannot buy property.
Land use must fulfill its "social function," meaning abandoned or misused properties can be reclaimed by the Indonesian state. Hak Pakai and Hak Sewa are restricted to residential or investment purposes, not commercial development by individuals.
Foreigners cannot enter nominee arrangements where Indonesian citizens hold property on their behalf, as these agreements are legally unenforceable and risky. Geographic restrictions may apply in certain border areas or strategic locations for national security reasons.
All foreign land acquisitions must be properly registered with the National Land Office (BPN) to secure legal rights, and violations of usage restrictions or residency requirements can result in property forfeiture.
Can foreigners purchase land for residential purposes, and is there a pathway to residency or citizenship through land ownership?
Foreigners can definitely purchase land for residential purposes through Hak Pakai or Hak Sewa structures, but land ownership does not automatically confer citizenship rights.
Hak Pakai is specifically designed for personal residential use and requires existing residency status (KITAS or KITAP), while Hak Sewa allows residential use without prior residency requirements. Both options provide long-term housing solutions for foreigners living in Indonesia.
Property ownership may support applications for investment-linked residency programs like the Investor KITAS or Indonesia's Golden Visa program, but substantial financial requirements beyond land purchase must be met. The Second Home Visa offers 5-10 year residency for significant investors but doesn't automatically grant citizenship.
No direct pathway from land ownership to Indonesian citizenship exists - the country maintains strict naturalization requirements including extended residency periods, language proficiency, and cultural integration tests. Land ownership can demonstrate long-term commitment to Indonesia, potentially supporting residency applications, but citizenship requires separate legal processes.
It's something we develop in our Indonesia property pack.
Where do foreigners typically buy land in Indonesia?
Bali dominates foreign land purchases as Indonesia's premier tourist and residential hub, offering strong investment potential and rental yields across areas like Seminyak, Canggu, and Ubud.
Jakarta attracts business-focused foreign buyers due to its role as Indonesia's commercial center, though land prices are significantly higher than other regions. The capital city offers excellent infrastructure and international business connectivity.
Lombok is emerging as a popular alternative to Bali, providing tourism growth potential and development opportunities at lower price points than its famous neighbor. Areas like Gili Islands and southern coastlines see increasing foreign interest.
Java, particularly around Surabaya, offers affordable land options for foreigners seeking budget-friendly investments or residential properties. Other emerging markets include parts of Sumatra and Sulawesi, though these require more careful due diligence.
Local agencies facilitate these purchases, including Bali Land for Sale, Lombok Property and Investment, and Bali Treasure Properties, providing essential market knowledge and legal guidance for foreign buyers in their preferred regions.
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What is the step-by-step process for purchasing land as a foreigner in Indonesia?
The land purchase process follows seven essential steps to ensure legal compliance and secure ownership rights.
First, choose your ownership structure - Hak Pakai for personal residence, Hak Sewa for investment properties, or PT PMA for commercial development. Then verify your eligibility by obtaining KITAS/KITAP for Hak Pakai or confirming minimum price threshold compliance for your chosen region.
Select your property and conduct thorough due diligence, checking legal status, zoning regulations, access rights, and certificate authenticity. Hire a licensed notary (PPAT) and legal advisor, as all transactions must be notarized and legal counsel protects against potential issues.
Sign the purchase contract and transfer funds through proper banking channels, providing required proof of funds documentation. Register your land rights with the National Land Office (BPN) to secure legal title and complete the ownership transfer process.
Optional steps include establishing a PT PMA if purchasing for business operations or commercial development purposes, though this adds complexity and additional costs to the transaction.
What documents do I need to buy land in Indonesia as a foreigner?
Essential documents include a valid passport with at least six months validity, KITAS or KITAP residence permits for Hak Pakai purchases, and comprehensive proof of funds through bank statements.
You'll need an NPWP (Indonesian tax identification number), recent passport photos, and potentially marriage certificates or reference letters depending on specific circumstances. The NPWP is mandatory for all property transactions and must be obtained before purchase completion.
Property-specific documents include the land certificate, professional due diligence reports, and the notarized contract of sale prepared by your licensed PPAT notary. All foreign documents may require translation and legalization through Indonesian consulates.
Additional documentation might include visa-related paperwork, proof of address in your home country, and financial statements demonstrating income sources. Some regions require additional permits or approvals, particularly for properties near sensitive areas or coastlines.
It's something we develop in our Indonesia property pack.
Are there any mandatory requirements or optional steps in the land-buying process for foreigners?
Mandatory steps cannot be skipped and include comprehensive legal due diligence, PPAT notarization of all documents, and BPN registration to secure legal rights.
KITAS or KITAP residence permits are mandatory for Hak Pakai purchases, along with proof of funds documentation and compliance with minimum property value requirements in your chosen region. These requirements are strictly enforced and violations can void transactions.
Optional but recommended steps include establishing a PT PMA for business or investment purposes, securing guaranteed road access to your property, and engaging visa or relocation consultants for comprehensive support. Professional property inspections and environmental assessments are optional but valuable.
Insurance coverage, utility connections, and local community relationship building are optional considerations that can enhance your land ownership experience. Some buyers also choose to establish Indonesian bank accounts and obtain local driver's licenses as part of their integration process.
While optional steps aren't legally required, they often provide significant practical benefits and risk mitigation for foreign land owners in Indonesia.
Can foreigners buy land without being physically present in Indonesia?
Physical presence is not always required for the entire land-buying process, though it's strongly recommended for key stages like property inspections and due diligence.
Many administrative steps, including document signing and notarization, can be handled through a locally appointed Power of Attorney, allowing foreign buyers to complete transactions remotely. However, establishing this Power of Attorney typically requires initial presence in Indonesia.
Remote purchasing works best when buyers have trusted local representatives, experienced legal advisors, and comprehensive property documentation including professional inspections and surveys. Digital communication tools enable virtual property tours and remote consultations with legal teams.
Key limitations include the inability to personally assess property conditions, local neighborhood characteristics, and infrastructure quality without physical visits. KITAS/KITAP applications for Hak Pakai typically require in-country presence for biometric processing and interviews.
Most successful remote purchases involve buyers who have previous Indonesia experience, established local networks, or are working with highly reputable property agencies that provide comprehensive remote services and guarantees.
We did some research and made this infographic to help you quickly compare rental yields of the major cities in Indonesia versus those in neighboring countries. It provides a clear view of how this country positions itself as a real estate investment destination, which might interest you if you're planning to invest there.
What are the common mistakes and pitfalls foreigners make when buying land in Indonesia?
The most serious mistake involves attempting to purchase Hak Milik (freehold) titles, which is illegal for foreigners and can result in transaction voidance and legal complications.
Nominee arrangements rank as the second most dangerous pitfall, where Indonesian citizens hold property for foreigners - these agreements are legally unenforceable and often result in complete property loss. Many foreigners also conduct inadequate due diligence, failing to verify land certificates, zoning regulations, or access rights.
Failing to register rights with the National Land Office (BPN) leaves buyers without legal protection, while overlooking minimum value requirements or violating usage restrictions can trigger government reclamation. Not reviewing lease extension and resale terms in contracts creates future complications.
Administrative mistakes include unauthorized short-term rental operations violating local regulations, incomplete documentation during purchase, and choosing unqualified legal representatives. Price-related errors involve overpaying due to lack of market knowledge or falling victim to fraudulent schemes.
Geographic mistakes include buying in restricted areas, locations without proper infrastructure, or regions with unclear development potential and limited resale markets.
What do foreigners typically use their land for in Indonesia?
Personal residences under Hak Pakai represent the most common use, with foreigners building family homes, retirement properties, or vacation houses for personal enjoyment and long-term living.
Villa development for long-term rental income is increasingly popular, particularly in Bali and Lombok, where foreign owners create luxury accommodations for tourists and expatriate tenants. These properties often generate substantial rental yields in prime locations.
Commercial development through PT PMA structures includes hotels, resorts, wellness retreats, and hospitality businesses catering to Indonesia's growing tourism market. Some foreigners develop eco-resorts, yoga centers, or specialized tourism facilities.
Agricultural ventures attract foreigners interested in organic farming, permaculture projects, or agricultural tourism operations, though these require specific permits and compliance with agricultural land regulations. Small-scale development projects include guesthouses, co-working spaces, and community-focused businesses.
Investment holding for future appreciation is common, with foreigners purchasing land in emerging areas expecting infrastructure development and tourism growth to increase property values over time.
What are the average prices for land in different regions of Indonesia?
| Region | Average Price per Sqm | Average Total Purchase | Price Range |
|---|---|---|---|
| Indonesia National Average | IDR 15.26 million ($931) | Varies by region | Wide regional variation |
| Bali (Premium Areas) | IDR 10-15 million ($610-$915) | IDR 1.87 billion ($114,070) | Seminyak/Canggu highest |
| Bali (Standard Areas) | IDR 1-5 million ($61-$305) | IDR 800 million-1.5 billion | Rural/developing areas |
| Jakarta | IDR 12.5 million ($763) | IDR 4 billion ($244,000) | Central areas premium |
| Surabaya, Java | IDR 13.2 million ($805) | IDR 4.3 billion ($262,300) | Industrial/business focus |
| Lombok | IDR 2-8 million ($122-$488) | IDR 600 million-2 billion | Coastal areas premium |
| Rural Areas (Sumatra/Sulawesi) | IDR 500,000-2 million ($30-$122) | IDR 200-800 million | Limited infrastructure |
What is the long-term forecast for the land market in Indonesia, and how is it expected to develop?
Indonesia's land market shows stable to moderate growth prospects, with urban and tourist areas like Bali, Jakarta, and Lombok continuing price increases driven by domestic economic growth, tourism expansion, and infrastructure investments.
Bali specifically faces increasing land price trends linked to sustained foreign demand and tourism recovery, with premium areas like Seminyak and Canggu expected to see continued appreciation through 2025-2027. Government infrastructure projects including new airports and roads support this growth.
Jakarta's market may experience significant changes due to government plans relocating the capital to Nusantara, potentially affecting property values differently across various city districts. Some areas may see decreased demand while others benefit from redevelopment opportunities.
Lombok and emerging destinations are positioned for growth as Bali alternatives, with government tourism promotion and infrastructure development supporting land value appreciation in coastal and accessible areas.
Key risks include potential regulatory changes affecting foreign ownership, enforcement actions against absentee or abandoned properties, and economic volatility affecting tourism demand. Environmental concerns and climate change may also impact coastal property values long-term.
What taxes, costs, and fees should I be aware of when buying land in Indonesia, and can I pay in cash?
Land and Building Acquisition Duty (BPHTB) represents the primary purchase tax at 5% of the property's assessed value, calculated on government appraisal rather than purchase price.
Notary and legal fees typically cost 1-2% of property value for PPAT services and legal representation, while real estate agent commissions vary but commonly range 2-5% of purchase price. Annual Property Tax (PBB) applies with progressive rates based on property usage and assessed value.
Additional costs include documentation fees, registration charges, and government approvals that can total 5-10% of the purchase price combined. Some regions impose additional local taxes or development fees that buyers should budget for accordingly.
Bank transfer is required for most transactions due to anti-money laundering regulations, though cash payments may be possible for smaller transactions under certain circumstances. International wire transfers require proper documentation and compliance with both Indonesian and origin country banking regulations.
It's something we develop in our Indonesia property pack.
Conclusion
This article is for informational purposes only and should not be considered financial advice. Readers are advised to consult with a qualified professional before making any investment decisions. We do not assume any liability for actions taken based on the information provided.
Buying land in Indonesia as a foreigner requires careful navigation of legal structures like Hak Pakai, Hak Sewa, or PT PMA, each offering different benefits and restrictions for long-term land control.
Success depends on proper due diligence, qualified legal representation, and understanding regional price variations ranging from IDR 500,000 to IDR 15 million per square meter across different Indonesian markets.
Sources
- Bali Land and Property for Sale
- Primer House Indonesia
- Lombok Property Investment
- DSG Pay - Buying Property Guide
- Indo NED - Land Titles Guide
- Sumba Sunset Cliff - Foreign Ownership Guide
- Global Property Guide - Indonesia
- Nour Estates - Lombok Property Guide
- Emerhub - Property Buying Guide
- Immigrant Invest - Second Home Visa