Can foreigners own land in Indonesia?

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

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BAMBOOROUTES

A team specialized in real estate investing in APAC countries (Japan, Indonesia, 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

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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.

What types of land ownership can foreigners access in Indonesia?

Foreigners cannot directly own freehold land (Hak Milik) in Indonesia, which is reserved exclusively for Indonesian citizens.

However, foreign individuals can acquire Hak Pakai (Right to Use) for residential purposes, typically lasting 30 years and extendable up to 80 years total. They can also obtain Hak Sewa (Right to Lease) for periods ranging from 25 to 80 years depending on the agreement terms.

Foreign investors who establish a foreign-owned company (PT PMA) can access Hak Guna Bangunan (HGB - Right to Build), allowing them to construct and own structures for up to 30 years with extension possibilities. For agricultural purposes, PT PMA structures can obtain Hak Guna Usaha (Right to Cultivate) for up to 35 years, also extendable.

All these alternative titles come with specific restrictions, including limitations on land size, minimum investment values, and exclusions from areas designated for national security, environmental protection, or cultural heritage.

Can foreigners convert leasehold rights to full ownership over time?

No conversion pathway exists for foreigners to upgrade from leasehold or other limited titles to freehold ownership.

Freehold land (Hak Milik) remains permanently restricted to Indonesian citizens only, and this restriction cannot be circumvented through time, investment, or any legal process available to foreign nationals.

The only way for a foreigner to eventually obtain freehold land rights is by becoming an Indonesian citizen through the naturalization process, which requires meeting specific residency, language, and other citizenship requirements.

Foreign buyers should plan their investments understanding that their land rights will always remain within the leasehold or usage rights framework, regardless of how long they hold the property.

Which Indonesian regions attract the most foreign land buyers?

Bali dominates foreign land purchases, particularly in areas like Badung, Denpasar, Canggu, Seminyak, and Uluwatu, driven by tourism infrastructure and lifestyle appeal.

Region	Average Land Price (2025)	Foreign Buyer Appeal
Bali (Seminyak)	IDR 15 million/sqm (~$915)	Premium tourist zone, established infrastructure
Bali (General areas)	IDR 1.87 billion/plot (~$114,000)	7% annual growth, tourism hub
Jakarta (Central/South)	IDR 3 billion/plot (~$148,000)	Business hub, large expat community
Lombok (Kuta area)	$150-$350/sqm	Emerging destination, lower entry costs
Lombok (Selong Belanak)	$60-$200/sqm	Underdeveloped, high growth potential
Tangerang/Bandung	Varies by location	Proximity to industry, expat amenities

What is the complete process for foreigners to purchase land legally?

The land purchase process begins with selecting the appropriate ownership structure based on intended use and eligibility.

1. **Choose ownership structure** - Determine whether Hak Pakai, Hak Sewa, or PT PMA setup best suits your needs and budget2. **Property identification** - Work with licensed real estate agents to find properties eligible for foreign ownership3. **Comprehensive due diligence** - Verify land certificates, building permits, ownership history, zoning compliance, and check for any existing disputes4. **Preliminary agreement execution** - Sign initial contracts and pay deposit (typically 10-30% of purchase price)5. **Notarial deed preparation** - Execute the Sale and Purchase Agreement (Akta Jual Beli) before a licensed notary (PPAT)6. **Tax and fee settlement** - Pay all required buyer taxes, seller taxes, notary fees, and registration costs7. **Official registration** - Notary registers the transaction with the National Land Office (BPN)8. **Certificate issuance** - Receive the appropriate Hak Pakai, Hak Sewa, or HGB certificate confirming your land rights

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

Which documents must foreigners provide to buy land?

Foreign land buyers must present a valid passport with minimum 3 years remaining validity and obtain an Indonesian tax number (NPWP).

Legal residency status requires either KITAS (Temporary Stay Permit) or KITAP (Permanent Stay Permit), along with comprehensive proof of funds including recent bank statements and salary documentation. If purchasing jointly with an Indonesian spouse, a marriage certificate becomes mandatory.

Property-specific documentation includes verified land certificates, building permits (IMB), proof of current tax compliance, and the Deed of Sale and Purchase (Akta Jual Beli). For PT PMA purchases, complete company registration documents, articles of association, and business licenses are essential.

All foreign documents require official translation into Bahasa Indonesia and proper notarization before submission to Indonesian authorities.

Can foreigners complete land purchases without visiting Indonesia?

Yes, foreigners can legally purchase land in Indonesia without physical presence through power of attorney arrangements.

Remote purchases require granting legal power of attorney to a trusted representative in Indonesia, who can act on your behalf throughout the transaction process. Digital signatures are accepted in some cases, though this varies by notary and transaction complexity.

All power of attorney documents must be properly notarized and legalized, and working with reputable real estate agents or legal professionals becomes crucial for remote transactions. Due diligence becomes even more critical when buying remotely, as you cannot personally inspect the property or verify conditions.

Remote buyers should budget for additional legal fees and allow extra time for document verification and communication between all parties involved in the transaction.

What are the most common legal pitfalls for foreign buyers?

The most dangerous mistake involves attempting nominee arrangements, where foreigners illegally use Indonesian citizens as proxies to hold freehold titles.

Incomplete due diligence frequently causes problems, including unclear title ownership, unresolved zoning issues, unpaid property taxes, or existing legal disputes that buyers discover only after purchase completion.

Many foreigners fail to use licensed notaries (PPAT), ignore specific restrictions on land use or location, or misunderstand renewal and extension terms for their leasehold titles. Falling victim to land scams in restricted areas or purchasing land that cannot legally be owned by foreigners represents another significant risk.

Proper legal representation, thorough verification of all documents, and understanding all ownership limitations before signing any agreements can prevent most of these costly mistakes.

How do foreigners typically use their Indonesian land?

Residential use dominates foreign land purchases, primarily for private villas, vacation homes, and permanent relocation properties.

**Primary land uses by foreign buyers:**- **Luxury residential development** - Private villas and upscale homes in tourist areas- **Vacation rental business** - Guesthouses, boutique hotels, and short-term rental properties - **Commercial ventures** - Restaurants, cafes, coworking spaces, and retail establishments- **Tourism infrastructure** - Resorts, tour operator facilities, and hospitality services- **Agricultural projects** - Organic farming, plantation development through PT PMA structures- **Mixed-use development** - Combining residential and commercial elements for investment returns

Business-oriented purchases typically require PT PMA company structures, while individual residential use can often be accomplished through Hak Pakai arrangements depending on the specific location and local regulations.

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 current land prices in popular Indonesian regions?

As of June 2025, Bali leads Indonesian land prices with Seminyak averaging IDR 15 million per square meter (approximately $915).

Bali's overall market shows plots averaging IDR 1.87 billion (around $114,000), with the island experiencing consistent 7% annual growth over the past five years. Jakarta's central areas command premium prices at IDR 3 billion per plot (approximately $148,000) due to business hub status and established expat communities.

Lombok presents more affordable entry points, with Kuta areas ranging from $150-$350 per square meter, while emerging zones like Selong Belanak offer opportunities from $60-$200 per square meter. Secondary cities like Surabaya average IDR 1.75 billion per plot (around $87,000).

Land appreciation in Bali and Lombok continues accelerating due to sustained tourism growth and foreign investment demand, with Lombok experiencing particularly rapid price increases as infrastructure development progresses.

What are all the costs involved in buying and owning land?

Buyer's Transfer Tax (BPHTB) represents the largest single cost at 5% of the property's assessed value.

Cost Type	Percentage/Amount	When Paid
Buyer's Transfer Tax (BPHTB)	5% of property value	At closing
Seller's Tax	2.5% of property value	At closing (seller responsibility)
Notary/PPAT Fees	1-2% of property value	At closing
Land Registration Fee	~0.2% of property value	During registration
Annual Land Tax (PBB)	Varies by location	Annually
Due Diligence/Legal Fees	Varies by provider	Before purchase
Extension/Renewal Fees	Varies by title type	At renewal periods

Can foreigners obtain mortgages for Indonesian land purchases?

Foreigners can now apply for mortgages (KPR) for properties with Hak Pakai or HGB titles, but not for freehold (Hak Milik) properties.

Mortgage availability depends heavily on the lending bank, as not all Indonesian financial institutions offer loans to foreign nationals. Eligibility typically requires valid KITAS or KITAP residency status, verifiable income documentation, substantial down payment (often 30-50% of property value), and clean credit history.

Interest rates for foreign borrowers generally exceed those offered to Indonesian citizens, with stricter lending conditions and shorter loan terms. Banks may require additional collateral or guarantees from Indonesian citizens or companies.

Foreigners should expect longer approval processes and may need to demonstrate ties to Indonesia through business activities or extended residency to improve mortgage eligibility chances.

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.

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

Sources

1. Wise - Buy Property in Indonesia
2. Indoned - Land Titles in Indonesia Guide
3. Bali Exception - PT PMA Property Ownership
4. Nour Estates - Foreigners Buy Property Lombok
5. Emerhub - Buying Property in Indonesia
6. Invest in Asia - Foreigner Property Purchase
7. LinkedIn - Property Ownership for Foreigners
8. Mr Fix It Bali - Land Certificates
9. Kompas - Foreign Property Demand Jakarta Bali
10. Own Property Abroad - Indonesia Land Pricing