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
Foreigners cannot own land outright in Indonesia but can secure long-term use rights through specific ownership structures.
Indonesia offers several legal pathways for foreign land acquisition, including Hak Pakai (Right to Use) for up to 80 years and Hak Guna Bangunan (Right to Build) for commercial purposes. Bali remains the most popular destination, with land prices averaging $915 per square meter in prime areas like Seminyak, while emerging regions like Lombok offer more affordable options starting at $60 per square meter.
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 can acquire land use rights in Indonesia through Hak Pakai (25-80 years) or Hak Guna Bangunan structures, with Bali being the most expensive market and Lombok offering emerging opportunities.
The purchase process requires specific documentation, costs typically 8-12% of property value in fees and taxes, and can be completed remotely through power of attorney arrangements.
| Land Right Type | Duration | Suitable For |
|---|---|---|
| Hak Pakai (Right to Use) | 25-30 years, extendable to 80 years total | Residential properties, villas |
| Hak Guna Bangunan (Right to Build) | 30 years, extendable | Commercial properties via PT PMA |
| Hak Sewa (Right to Rent) | Up to 25 years, renewable | Short-term investments |
| Hak Guna Usaha (Right to Cultivate) | Varies | Agricultural/plantation (companies only) |
| Hak Milik (Freehold) | Perpetual | Indonesian citizens only |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
What types of land can foreigners legally buy in Indonesia, and which types are restricted?
Foreigners cannot purchase freehold land (Hak Milik) in Indonesia, which is exclusively reserved for Indonesian citizens.
The Indonesian government permits foreign land acquisition through four specific legal structures. Hak Pakai (Right to Use) represents the most common option for foreigners, granting land use rights for an initial 25-30 years that can be extended up to 80 years total. This structure works best for residential properties and villas built on freehold land owned by Indonesian citizens or the state.
Hak Guna Bangunan (Right to Build) allows foreigners to construct and operate buildings through a foreign-owned company (PT PMA) for up to 30 years with extension possibilities. Hak Sewa (Right to Rent) provides leasehold rights typically lasting up to 25 years with renewal options. Hak Guna Usaha (Right to Cultivate) serves agricultural and plantation purposes but generally requires company ownership rather than individual purchase.
Indonesian law strictly prohibits foreign ownership of subsidized apartments, land within protected environmental areas, and certain rural agricultural zones designated for local food security. As of June 2025, these restrictions remain firmly in place despite ongoing discussions about liberalizing foreign property ownership rules.
It's something we develop in our Indonesia property pack.
Is there any path to residency or citizenship by purchasing land in Indonesia as a foreigner?
Indonesia does not offer residency or citizenship pathways through property or land purchases.
Unlike countries such as Portugal or Greece, Indonesia maintains strict separation between property investment and immigration status. Foreign land buyers must obtain their residence permits through conventional channels including work visas (KITAS), retirement visas for individuals over 55, family reunification visas, or investor visas requiring substantial business investments beyond real estate.
The Indonesian government requires foreign property owners to maintain valid visa status independently of their land holdings. Property ownership under Hak Pakai or other structures does not provide any immigration benefits, visa extensions, or preferential treatment in residency applications.
Foreigners planning long-term residence in Indonesia should pursue appropriate visa categories before or simultaneously with property purchases. The Ministry of Law and Human Rights handles all immigration matters separately from the National Land Agency (BPN) that oversees property transactions.
Which regions or islands in Indonesia are most popular among foreigners for land purchases, and why?
Bali dominates foreign land purchases, accounting for approximately 60% of all foreign property transactions in Indonesia as of mid-2025.
Seminyak, Canggu, and Ubud represent Bali's most sought-after areas for foreign buyers. Seminyak attracts luxury villa investors with land prices averaging $915 per square meter, while Canggu appeals to digital nomads and surf enthusiasts with slightly lower prices around $805-$915 per square meter. Ubud draws buyers seeking cultural immersion and wellness-focused properties.
Jakarta ranks second for foreign land purchases, primarily attracting expatriate professionals and corporations seeking commercial properties. The capital's business district offers Hak Guna Bangunan opportunities for office buildings and mixed-use developments, with land prices averaging $763 per square meter in prime locations.
Lombok emerges as the fastest-growing destination for foreign buyers, particularly in Kuta and Selong Belanak areas. Land prices range from $60-$350 per square meter, offering significant value compared to Bali while providing similar tropical appeal and growing tourism infrastructure. Batam attracts buyers due to its proximity to Singapore and industrial development potential, while Balikpapan gains attention as the gateway to Indonesia's new capital city Nusantara.
Can you walk me through the exact step-by-step process of buying land in Indonesia as a foreigner?
The Indonesian land purchase process follows seven mandatory steps that typically require 60-90 days to complete.
Step one involves selecting your ownership structure between Hak Pakai for individual ownership or PT PMA for corporate ownership. Step two requires comprehensive due diligence including land certificate verification, zoning compliance checks, debt clearance confirmation, and access rights validation through the local Land Office (BPN).
Step three involves signing a Conditional Sales and Purchase Agreement (CSPA) with the seller, typically requiring a 10-30% deposit. This agreement includes specific conditions such as clear title transfer and permit approvals. Step four requires signing the final sales contract before a licensed Land Deed Official (PPAT) who verifies all documentation and legal compliance.
Step five involves completing the remaining payment according to the agreed terms, often through escrow arrangements for additional security. Step six sees the PPAT registering the transaction with the National Land Agency (BPN) and submitting all required documentation for title transfer. Step seven concludes with receiving your official land certificate issued in your name (Hak Pakai) or your company's name (Hak Guna Bangunan).
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What documents and permits are absolutely required for a foreigner to complete a land purchase?
Foreign land buyers must prepare eight essential document categories to complete their purchase legally.
Personal identification requires a valid passport with minimum 36 months remaining validity, along with your current Indonesian visa or residence permit (KITAS/KITAP). Marriage certificates and spouse identification become mandatory if you're married, as Indonesian law requires spousal consent for property transactions.
Property documentation includes the original land certificate (Sertifikat Hak Milik or other titles), survey maps, zoning certificates, and Environmental Impact Assessment (AMDAL) if required. Tax compliance requires proof of property tax payments (PBB) and any outstanding municipal fees.
Legal documentation includes a formal application letter for your chosen land right type (Hak Pakai or Hak Guna Bangunan), power of attorney if purchasing remotely, and company registration documents if buying through PT PMA structure. Additional permits may include building permits (IMB) for existing structures and business licenses for commercial properties.
Financial documentation requires proof of fund sources, tax payment receipts for transfer taxes, and bank account statements demonstrating transaction capability.
Is it possible to buy land in Indonesia without physically being in the country, and how would that work?
Yes, foreigners can complete Indonesian land purchases remotely through properly executed power of attorney arrangements.
Remote purchasing requires appointing a trusted legal representative in Indonesia through a notarized and apostilled power of attorney document. This representative can be a licensed attorney, registered property agent, or trusted individual with legal authorization to act on your behalf throughout the entire transaction process.
The process begins with video conferences for property viewing and due diligence review, followed by electronic contract signing with digital notarization. Your appointed representative handles all physical document submissions, attends PPAT meetings, and manages payment transfers according to your instructions.
Indonesian law recognizes electronic signatures and remote notarization for property transactions, provided all documents meet legal authentication requirements. Your power of attorney must specifically authorize land purchase activities, payment authorization, and document signing. The entire remote process typically adds 2-3 weeks to standard transaction timelines but provides complete legal validity when executed properly.
Banks facilitate international wire transfers for purchase payments, though they require additional documentation for large transactions to comply with anti-money laundering regulations.
What are the most common mistakes or legal pitfalls foreigners make when buying land in Indonesia?
The most frequent and costliest mistake involves attempting to purchase freehold (Hak Milik) land through illegal nominee arrangements.
Many foreigners try circumventing ownership restrictions by having Indonesian citizens hold land titles on their behalf, believing this provides actual control. These nominee arrangements offer zero legal protection and frequently result in complete property loss when disputes arise. Indonesian courts consistently rule against foreigners in such cases, as the law recognizes only the Indonesian nominee as the true owner.
Due diligence failures represent the second major pitfall, including purchasing land without proper certificate verification, ignoring zoning restrictions that prevent intended use, and failing to confirm access rights to the property. Many buyers skip comprehensive title searches and discover liens, debts, or ownership disputes after purchase completion.
Legal representation mistakes include hiring unqualified agents instead of licensed attorneys, attempting to navigate the complex process without professional guidance, and failing to understand the specific requirements for their chosen ownership structure. Cost underestimation leads to financial problems when buyers fail to budget for the full 8-12% in transaction costs including taxes, notary fees, and legal expenses.
Documentation errors include insufficient passport validity, missing spousal consent, and inadequate fund source documentation that can delay or invalidate transactions.
What do foreigners typically use land for in Indonesia—residences, investments, farming, resorts, or other uses?
Residential villas represent 65% of foreign land purchases in Indonesia, primarily concentrated in Bali and Lombok.
Foreign buyers predominantly acquire land for luxury villa construction, ranging from retirement homes to vacation properties. These residential developments typically feature 2-4 bedrooms with private pools, tropical gardens, and modern amenities targeting the premium market segment.
Investment properties account for 25% of purchases, focusing on short-term rental businesses through platforms like Airbnb and Villa Finder. Bali's Canggu and Seminyak areas generate particularly strong rental yields, with well-located villas earning 8-12% annual returns through vacation rentals.
Commercial tourism developments represent 8% of foreign land acquisitions, including boutique resorts, wellness retreats, and restaurant complexes. These projects typically require Hak Guna Bangunan structures through PT PMA companies due to their commercial nature.
Agricultural ventures comprise only 2% of foreign land purchases, usually involving coffee plantations, organic farming, or eco-tourism combinations in Java and Sumatra. These projects face additional regulatory requirements and typically require substantial local partnership arrangements.
It's something we develop in our Indonesia property pack.
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 average land prices by region or island, and how do they compare to each other?
Indonesian land prices vary dramatically by location, with Bali commanding premium rates while Lombok and rural Java offer significantly more affordable options.
| Region/Area | Average Price per m² (USD) | Market Characteristics |
|---|---|---|
| Bali - Seminyak | $915 | Luxury tourism hub, highest prices |
| Bali - Canggu | $805-$915 | Digital nomad hotspot, strong rentals |
| Jakarta - Prime Areas | $763 | Business district, commercial focus |
| Surabaya | $805 | Industrial hub, steady demand |
| Lombok - Kuta | $150-$350 | Emerging tourism, rapid growth |
| Lombok - Selong Belanak | $60-$200 | Beachfront potential, early development |
| Bali - North/West regions | $61 | Rural, less developed areas |
| Rural Java | $519 | Agricultural land, plantation use |
What is the long-term outlook for Indonesia's land market in terms of value, regulation, and demand?
Indonesia's land market shows strong growth potential through 2030, driven by infrastructure development, tourism expansion, and increasing foreign investment interest.
Value appreciation in prime areas like Bali and Jakarta is projected to continue at 5-8% annually, supported by limited land supply and growing international demand. Lombok represents the highest growth potential with prices expected to double by 2027 as tourism infrastructure develops and international accessibility improves through expanded airport capacity.
Regulatory evolution shows gradual liberalization trends, though core foreign ownership restrictions remain unchanged. The government increasingly streamlines bureaucratic processes and introduces digital documentation systems to attract foreign investment. New capital city Nusantara development creates significant opportunities in East Kalimantan, with land values near the new capital rising 200-300% since project announcement.
Demand drivers include Indonesia's growing middle class, expanding tourism sector targeting 20 million annual visitors by 2026, and infrastructure investments including high-speed rail connections and improved airport facilities. Climate change concerns may shift demand toward higher-elevation areas and flood-resistant developments.
Currency considerations suggest the Indonesian Rupiah's long-term stability against USD provides natural hedging for foreign investors, while inflation typically drives real estate appreciation above deposit rates.
What taxes, notary fees, agent commissions, and other costs should a foreigner expect during and after purchase?
Total transaction costs for foreign land purchases in Indonesia typically range from 8-12% of the property value, significantly higher than many other countries.
Transfer taxes represent the largest cost component at 5% of transaction value paid by the buyer, while income tax of 2.5% falls on the seller but often gets negotiated into the final price. Notary and Land Deed Official (PPAT) fees range from 1-2% of transaction value, covering document preparation, verification, and registration services.
Agent commissions vary from 2-5% depending on property type and location, with luxury Bali properties commanding higher rates. Legal and due diligence fees typically cost $500-$2,000 depending on property complexity and attorney selection, though this investment proves essential for avoiding costly mistakes.
Ongoing costs include annual property tax (PBB) at 0.1-0.2% of assessed value, building permits for construction or renovation projects, and utility connection fees. Additional costs may include survey fees, environmental assessments for larger properties, and currency conversion costs for international wire transfers.
Foreign buyers should budget an additional 2-3% for miscellaneous administrative charges, permit fees, and potential delays or complications during the transaction process.
Can foreigners buy land in cash, and are mortgages even available to them—if so, what banks offer them, under what conditions, and at what interest rates?
Cash purchases represent the standard payment method for foreign land buyers in Indonesia, with mortgage financing being extremely limited and restrictive.
Indonesian banks rarely offer mortgages to foreigners due to visa uncertainty, currency risks, and regulatory restrictions. When available, mortgages require long-term residence permits (KITAP), substantial Indonesian income documentation, and significantly higher down payments than domestic buyers typically need.
Bank Central Asia (BCA), Bank Mandiri, and CIMB Niaga occasionally provide foreign mortgage products under strict conditions including 50-70% down payments, maximum 10-15 year terms, and interest rates 2-4% higher than domestic rates. Current foreign mortgage rates range from 8-12% annually compared to 6-8% for Indonesian citizens.
Alternative financing includes developer payment plans allowing buyers to pay in installments during construction, seller financing arrangements where property owners provide direct loans, and international mortgage products from banks in the buyer's home country secured against other assets.
Most foreign buyers opt for cash transactions to avoid financing complications and negotiate better purchase prices. International wire transfers remain the preferred payment method, though buyers should confirm bank requirements for large international transfers and anti-money laundering compliance.
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.
Foreign land ownership in Indonesia operates within a well-defined legal framework that provides genuine opportunities despite freehold restrictions.
Success requires thorough due diligence, proper legal representation, and realistic expectations about ownership structures and associated costs.
Sources
- Wise - Buy Property in Indonesia
- Emerhub - Buying Property in Indonesia
- Bali Business Consulting - Real Estate Purchase
- Balitecture Realty - Property Purchase Guide
- LinkedIn - Property Ownership Indonesia
- Tempo - Land Certificate Types
- Invest in Asia - Foreign Property Purchase
- Incorp Asia - Real Estate Indonesia
- BambooRoutes - Indonesia Investment Areas
- Own Property Abroad - Indonesia Land Pricing
-Average House Prices in Indonesia: Complete Market Analysis
-Can Foreigners Buy Apartments in Indonesia: Legal Guide
-Foreign Land Ownership in Indonesia: Rights and Restrictions
-Indonesia Property Price Forecasts: Market Predictions
-Indonesia Property Market Outlook: Investment Opportunities