Can foreigners own land in Indonesia?

Last updated on August 26, 2025

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 freehold land in Indonesia, but several legal pathways allow property control and investment through specific ownership structures.

As of September 2025, foreign property ownership in Indonesia operates through alternative legal arrangements including Hak Pakai (Right to Use), leasehold agreements, and company structures, each offering different rights and requirements for international investors.

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.

Quick Summary:

Foreigners cannot own freehold land in Indonesia but can control property through Hak Pakai (80-year usage rights), leasehold agreements (25-80 years), or company structures for commercial purposes.

Popular areas include Bali's Canggu and Seminyak ($600-$1,000+ per m²), Lombok's coastal regions ($60-$350 per m²), and Jakarta's apartment market ($80,000-$400,000+).

Ownership Type	Duration	Requirements
Hak Pakai (Right to Use)	Up to 80 years	Valid stay permit (KITAS/KITAP)
Hak Sewa (Leasehold)	25-80 years	No residency requirement
Hak Guna Bangunan (HGB)	30+ years	PT PMA company structure
Hak Guna Usaha (HGU)	35+ years	PT PMA for agriculture
Strata Title (Apartments)	Freehold equivalent	Valid stay permit

Who is the author of this content?

BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Thailand, Indonesia, Australia, etc.).

We are a team of financial experts, legal professionals, developers, and local real estate specialists dedicated to helping people like you avoid mistakes when investing in real estate in a foreign place, particularly in Indonesia. If you'd like to learn more about us, you can check our presentation page.

How this content was created 🔎📝

At BambooRoutes, we explore the Indonesian real estate market every day. Our team doesn't just analyze data from a distance—we're actively engaging with local realtors, investors, and property managers in cities like Jakarta, Bali, and Lombok. This hands-on approach allows us to gain a deep understanding of the market from the inside out.

These observations are originally based on what we've learned through these conversations and our observations. But it was not enough. To back them up, we also needed to rely on trusted resources

We prioritize accuracy and authority. Trends lacking solid data or expert validation were excluded.

Trustworthiness is central to our work. Every source and citation is clearly listed, ensuring transparency. A writing AI-powered tool was used solely to refine readability and engagement.

To make the information accessible, our team designed custom infographics that clarify key points. We hope you will like them! All illustrations and media were created in-house and added manually.

Fact-checked and reviewed by our local expert

✓✓✓

Daniel Rouquette 🇫🇷

CEO & Co-Founder at Villa Finder

Daniel Rouquette has deep expertise in Indonesia's short-term rental market, thanks to Villa Finder's strong presence across the country. As the CEO and Co-Founder of Villa Finder, he has been managing one of the largest villa rental platforms in the Asia-Pacific region since 2012. The company offers a carefully curated selection of over 4,000 villas in 28 destinations, ensuring guests receive high-end accommodation and tailored services.

Can foreigners buy land in Indonesia?

Foreigners cannot buy freehold land (Hak Milik) in Indonesia under any circumstances.

Only Indonesian citizens are legally permitted to own freehold land titles. However, foreigners can control and invest in Indonesian property through several alternative legal structures that provide substantial usage rights.

The main options include Hak Pakai (Right to Use) for up to 80 years, Hak Sewa (leasehold) agreements for 25-80 years, and company-based ownership through PT PMA structures for commercial purposes. Each pathway has specific requirements, costs, and limitations that foreign investors must understand before proceeding.

These legal alternatives allow foreigners to build homes, operate businesses, and generate rental income, but the underlying land ownership always remains with Indonesian entities or the state.

It's something we develop in our Indonesia property pack.

What types of land ownership rights can foreigners access in Indonesia?

Foreigners can access four main types of land rights in Indonesia, each designed for different purposes and investment goals.

Land Right Type	Duration	Primary Use
Hak Pakai (Right to Use)	30 years, renewable to 80 years total	Residential properties, villas
Hak Sewa (Leasehold)	25-80 years depending on agreement	Any purpose, most flexible option
Hak Guna Bangunan (HGB)	30 years, renewable to 80 years total	Commercial development, hotels
Hak Guna Usaha (HGU)	35 years, renewable to 95 years total	Agricultural and plantation use
Strata Title	Equivalent to freehold for units	Apartments and condominiums

Does land ownership in Indonesia provide a pathway to residency or citizenship?

Land ownership in Indonesia does not provide any pathway to residency or citizenship for foreigners.

However, certain land ownership structures require foreigners to already hold valid long-term stay permits. For Hak Pakai titles, foreign buyers must maintain KITAS (Stay Permit), KITAP (Permanent Stay Permit), or the new Second Home Visa throughout the ownership period.

The relationship works in reverse - you need residency status to access certain land rights, but land ownership never grants residency status. Foreign investors must secure their visa and residency status independently through Indonesia's immigration programs.

Some investors use the B211A visa for property viewing trips, then apply for investment visas or retirement visas separately from their property purchases.

Where in Indonesia do foreigners typically purchase the most land?

Bali dominates foreign land purchases, accounting for approximately 70% of all foreign property investments in Indonesia as of September 2025.

Bali South Coast: Canggu, Seminyak, Berawa, and Umalas attract the highest foreign investment volumes, with land prices ranging $600-$1,000+ per square meter
Bali Central: Ubud and surrounding areas popular for lifestyle and wellness-focused developments, with prices typically $300-$600 per square meter
Lombok: Kuta Lombok, Selong Belanak, and Tanjung Aan represent emerging opportunities with land prices $60-$350 per square meter
Jakarta: Primarily apartment and condominium purchases for business purposes, with limited land acquisition opportunities
Emerging Destinations: Gili Islands, Flores, and parts of Java gaining attention from early-stage investors seeking higher returns

Bali's dominance stems from established tourism infrastructure, international airport access, and proven rental income potential for foreign investors.

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What is the step-by-step process for foreigners to purchase land in Indonesia?

The Indonesian land purchase process typically takes 2-3 months from initial agreement to final registration.

Select Ownership Structure: Choose between Hak Pakai, Hak Sewa, strata title, or PT PMA company structure based on intended use and residency status
Due Diligence Phase: Engage licensed notary (PPAT) and lawyer to verify clear title, check zoning restrictions, and confirm no outstanding disputes or liens
Document Preparation: Gather required documents including passport, visa/KITAS, Indonesian tax number (NPWP), bank statements, and marriage certificate if applicable
Preliminary Purchase Agreement: Sign binding agreement and pay 10-30% deposit to secure the property
Notarial Sale and Purchase Deed: Complete official transaction before certified notary (PPAT) with all parties present
Tax and Fee Payment: Pay 5% transfer tax (BPHTB), 0.5-1.5% notary fees, and other associated costs
Land Office Registration: Submit completed transaction to National Land Agency (BPN) for official title transfer
Visa Compliance: If using Hak Pakai, ensure valid long-term visa status is maintained throughout ownership period
Certificate Collection: Receive final ownership certificate from land registry office, completing the legal transfer process

What documents are required for foreigners to buy land in Indonesia?

Foreign land buyers must provide comprehensive documentation to complete legal purchase requirements in Indonesia.

Document Category	Specific Requirements	Validity Period
Identity Documents	Valid passport with 36+ months remaining	Must be current throughout process
Residency Status	KITAS, KITAP, or appropriate long-term visa	Required for Hak Pakai purchases
Tax Compliance	Indonesian tax number (NPWP)	Must be obtained before purchase
Financial Proof	Bank statements and proof of funds	Recent statements preferred
Property Documents	Seller's land ownership certificate	Must be verified current and clear
Legal Agreements	Deed of Sale and Purchase (Akta Jual Beli)	Prepared by licensed notary
Additional Documents	Marriage certificate (joint purchases), company documents (PT PMA)	As applicable to specific circumstances

Can foreigners buy land in Indonesia without being physically present?

Yes, foreigners can purchase land in Indonesia without being physically present through Power of Attorney arrangements.

The Power of Attorney (POA) must be properly executed and notarized, designating a trusted representative such as a licensed lawyer, registered property agent, or certified notary to act on the buyer's behalf. This representative can sign documents, make payments, and complete the entire transaction process.

However, remote purchases carry additional risks including limited ability to conduct personal due diligence, potential communication challenges, and increased reliance on third-party verification of property conditions and legal status.

Many foreign investors choose to visit Indonesia for initial property selection and due diligence, then use POA for final completion if return travel is not feasible.

It's something we develop in our Indonesia property pack.

What are the classic mistakes and pitfalls foreigners make when buying land in Indonesia?

Foreign buyers commonly make five critical mistakes that can result in significant financial losses or legal complications.

Using Illegal Nominee Arrangements: Allowing Indonesian citizens to hold freehold title "on behalf" of foreigners is illegal and provides no legal protection
Inadequate Due Diligence: Failing to verify clear title, outstanding debts, zoning restrictions, or access rights before purchase
Underestimating Hidden Costs: Not budgeting for taxes, permits, utility connections, road access, and ongoing maintenance expenses
Wrong Legal Structure: Choosing inappropriate ownership structure without considering intended use, residency status, and long-term goals
Treating Leasehold as Freehold: Misunderstanding that leasehold agreements do not provide inheritance rights or the same legal protections as freehold ownership

Additional pitfalls include purchasing in areas without proper zoning for intended use, failing to understand renewal conditions for long-term titles, and not maintaining required visa status for certain ownership types.

infographics rental yields citiesIndonesia

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 do foreigners typically use land for in Indonesia?

Foreign land purchases in Indonesia serve four primary purposes, with residential and hospitality investments dominating the market.

Residential villa development represents the largest category, particularly in Bali and Lombok, where foreign investors build luxury homes for personal use, holiday properties, or short-term rental operations targeting international tourists.

Tourism and hospitality businesses including boutique hotels, resort developments, and vacation rental properties constitute the second-largest use category, typically requiring PT PMA company structures for legal compliance.

Retirement and long-term relocation purposes account for approximately 25% of foreign land purchases, with buyers using Hak Pakai arrangements to establish permanent residences in Indonesia.

Speculative investment and development represent emerging opportunities, particularly in up-and-coming tourism destinations where foreign investors purchase land anticipating future appreciation and development potential.

What are the average land prices in popular areas for foreigners in Indonesia?

Land prices in Indonesia's foreign-popular areas vary significantly based on location, proximity to amenities, and development status as of September 2025.

Location	Land Price per m²	Typical Villa Price Range
Bali - Canggu/Seminyak	$600-$1,000+	$240,000-$2,000,000+
Bali - Ubud Central	$300-$600	$150,000-$800,000
Bali - Berawa/Umalas	$500-$800	$200,000-$1,500,000
Lombok - Kuta	$150-$350	$80,000-$400,000
Lombok - Selong Belanak	$60-$200	$40,000-$250,000
Lombok - Tanjung Aan	$150-$300	$75,000-$350,000
Jakarta - Premium Apartments	N/A (unit-based)	$80,000-$400,000+

What taxes, costs, and fees are associated with land ownership in Indonesia for foreigners?

Foreign land ownership in Indonesia involves multiple tax obligations and fees that buyers must budget for both during purchase and ongoing ownership.

The primary purchase costs include 5% transfer tax (BPHTB) paid by the buyer, notary and legal fees ranging 0.5-1.5% of transaction value, and registration fees for title transfer. New construction projects may also incur 10-11% VAT depending on the specific circumstances.

Annual ongoing costs include property tax (PBB) at approximately 0.1% of official land value, which is typically much lower than market value. Additional costs may include building permits, utility connections, and maintenance fees for developed properties.

Due diligence and legal verification costs vary by region and property complexity but typically require budgeting several thousand USD for comprehensive legal checks, surveys, and professional services.

Foreign investors should budget approximately 7-10% of purchase price for total transaction costs including all taxes, fees, and professional services.

Can foreigners pay cash for land in Indonesia and what are the conditions?

Cash payment is widely accepted and often preferred for Indonesian land transactions, with most sellers accepting international bank transfers or SWIFT wire transfers.

Indonesian banks typically require documentation of fund sources for large cash transactions, particularly amounts exceeding $50,000 USD equivalent. Foreign buyers must demonstrate legitimate income sources and may need to provide tax clearance from their home countries.

Some off-plan developments accept cryptocurrency payments, though this remains uncommon for established land transactions. Cash purchases often receive 5-10% discounts compared to financed purchases due to reduced transaction complexity and faster completion timelines.

Payment timing typically involves 10-30% deposit upon signing preliminary agreements, with the balance due at final closing before the notary. Escrow services are available through reputable law firms for additional transaction security.

It's something we develop in our Indonesia property pack.

Is it possible for foreigners to get mortgages for land in Indonesia and what are the rates and conditions?

Foreigners can obtain mortgages for Indonesian property, but options are limited and requirements are strict compared to cash purchases.

Local Indonesian banks including BCA, Mandiri, and CIMB Niaga offer mortgage products to foreigners holding valid KITAS/KITAP status and Hak Pakai or HGB titles. However, not all banks provide foreign lending, and policies change frequently.

Typical mortgage conditions require 30-50% down payments, compared to 10-20% for Indonesian citizens. Interest rates range 8-12% annually as of September 2025, significantly higher than many Western markets. Loan terms typically extend 10-15 years maximum for foreigners, shorter than the 20-25 year terms available to locals.

Additional requirements include proof of Indonesian income or substantial foreign income, local bank account maintenance, and property insurance. Some lenders require borrowers to maintain Indonesian residency throughout the loan period.

Many foreign investors choose cash purchases to avoid complex lending requirements and secure better negotiating positions with sellers.

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 requires careful navigation of complex legal structures, but offers substantial opportunities for investors willing to understand the requirements and work within established frameworks.

Success depends on choosing the appropriate ownership structure, conducting thorough due diligence, and maintaining compliance with visa and tax requirements throughout the ownership period.