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Buying property in Makassar as a foreigner is more complex than in most Western countries, with distinct ownership options, legal safeguards, and a nuanced process requiring careful documentation and market knowledge.
Foreigners in Indonesia cannot acquire full freehold ownership and must navigate alternatives like leasehold, Right to Use, or through foreign-owned companies. The process typically takes 6-12 weeks and involves mandatory notarial documentation, specific ownership structures, and higher down payments compared to Western markets.
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Foreigners can purchase property in Makassar through leasehold, Right to Use (Hak Pakai), or via foreign-owned companies, but cannot obtain full freehold ownership.
The buying process takes 6-12 weeks on average, requires mandatory notarial documentation, and involves higher costs and restrictions compared to Western property markets.
| Ownership Type | Duration/Rights | Requirements |
|---|---|---|
| Leasehold | 25-30 years, extendable | Valid passport, legal stay proof |
| Hak Pakai (Right to Use) | 25-30 years, renewable | KITAS/KITAP residency status |
| PT PMA Company | Varies by business license | Foreign investment company setup |
| Hak Guna Bangunan | 30 years, extendable to 80 | Specific application, residency |
| Condominium/Apartment | Varies by ownership type | Up to 49% of building units |
| Freehold (Hak Milik) | Not available | Prohibited for foreigners |
| Commercial via PT PMA | Business-linked duration | Active business operations |
How easy is it compared to buying a house in Western countries?
Purchasing property in Makassar involves significantly more legal restrictions and procedural hurdles for foreigners than in Western markets.
Foreigners in Indonesia cannot acquire full freehold (Hak Milik) ownership and must navigate alternatives like leasehold (Hak Sewa), Right to Use (Hak Pakai), Right to Build (Hak Guna Bangunan), or through a foreign-owned company (PT PMA). By contrast, many Western countries offer full freehold or condominium ownership to foreign buyers with minimal restrictions.
The documentation requirements are more extensive, involving mandatory notarial processes, specific visa or residency status verification, and complex ownership structure decisions that don't exist in most Western property markets. Legal safeguards exist but require more careful navigation than typical Western transactions.
Processing times in Makassar typically range from 6-12 weeks compared to 4-8 weeks in Western countries, and the involvement of licensed notaries is mandatory rather than optional.
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What are the exact steps in the process from start to finish?
The property acquisition process in Makassar follows a structured seven-step sequence that must be completed in order.
First, select your ownership structure by choosing between leasehold, Hak Pakai, Hak Guna Bangunan, or via PT PMA, according to your needs and legal eligibility. This decision impacts all subsequent steps and cannot be easily changed later.
Second, engage a licensed notary and legal advisor, which is critical for document verification and compliance with Indonesian property law. Third, conduct thorough due diligence by reviewing title, land status, legal encumbrances, and ensuring the seller owns what's being sold.
Fourth, negotiate and sign the purchase agreement with a standard 30% down payment and clear payment terms. Fifth, register ownership or rights through the notary who helps process registration with the local land office, with documentation varying by ownership type.
Sixth, obtain relevant visas or business permits if operating through PT PMA or seeking residency, applying for Investor KITAS, Second Home visa, or other required permits. Finally, finalize payment and possession by completing financial transactions, receiving property certificates, and taking physical possession.
What documents do I need to prepare and which ones are mandatory versus optional?
Document requirements for foreign property buyers in Makassar are divided into mandatory and optional categories based on your chosen ownership structure.
| Document Type | Status | Purpose |
|---|---|---|
| Valid passport | Mandatory | Identity verification |
| Proof of residence/legal stay (KITAS/KITAP) | Mandatory for Hak Pakai | Residency status verification |
| Investment documentation for PT PMA | Mandatory if using PT PMA | Company registration proof |
| Property sales agreement and notarial deed | Mandatory | Legal ownership transfer |
| Proof of payment/financial statements | Mandatory | Transaction verification |
| Land and building certificate | Mandatory | Due diligence and transfer |
| Tax identification | Mandatory | Property tax registration |
| Powers of attorney | Optional | Remote purchase facilitation |
| Supporting documents for visa applications | Optional | Secondary residency |
| Business plans | Optional | PT PMA or Investor KITAS applications |
Can I buy a property in Makassar without physically being in Indonesia?
Foreigners can successfully buy property in Makassar without physically being in Indonesia by appointing a trusted legal representative.
The process requires using a notarized power of attorney to manage the transaction on your behalf, which must be properly executed and authenticated. Your legal representative will handle property viewing, negotiations, documentation, and the final transaction process.
Remote purchases require additional documentation including authenticated powers of attorney, detailed property information packages, and secure payment arrangements through established banking channels. Video calls and digital documentation can facilitate property selection and contract review.
However, remote purchases carry higher risks including limited property inspection opportunities, reliance on third-party representations, and potential communication challenges during complex negotiations.
Many successful remote buyers work with established real estate agencies and legal firms that specialize in foreign transactions and provide comprehensive remote buying services.
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What types of properties can foreigners buy and what is strictly off-limits?
Foreign property ownership in Makassar is permitted for specific property types but strictly prohibited for others.
Foreigners can purchase leasehold landed houses or villas with 25-30 year terms that are extendable, and condominium or apartment units, typically up to 49% of units in a building. Commercial properties can be acquired via PT PMA structures but must be linked to active business activities.
Land with Hak Pakai or Hak Guna Bangunan titles is available subject to specific application processes and often residency requirements, providing long-term use rights rather than ownership.
Strictly off-limits to foreigners is freehold land and house ownership (Hak Milik/SHM), which is not permitted except under indirect structures or if married to an Indonesian citizen. This represents the most significant restriction compared to Western property markets.
Agricultural land, certain strategic locations near borders or military installations, and properties in areas designated for Indonesian citizens only are also prohibited for foreign ownership.
Is there any path from property ownership to residency or even citizenship?
Property ownership itself does not directly confer residency or citizenship rights in Indonesia.
However, using Hak Pakai or PT PMA structures can help qualify for limited residency visas such as the Second Home Visa (5-10 years) or Investor KITAS (2 years), which require separate applications and meeting specific investment thresholds.
The Second Home Visa requires property investments of at least $130,000 USD and provides renewable residency without work rights, while Investor KITAS requires active business operations through PT PMA structures.
Citizenship is not possible solely through property investment in Indonesia and requires separate naturalization processes including long-term residency, language proficiency, and other stringent requirements that are independent of property ownership.
Property investment can support visa applications by demonstrating financial stability and commitment to Indonesia, but it's not an automatic pathway to permanent residency or citizenship.
Are real estate agents in Makassar generally reliable and how do I choose one?
Real estate agent reliability in Makassar varies significantly, with reputable agencies generally being local branches of international firms.
Most trustworthy agencies include local branches of international firms such as JLL, Knight Frank, or Colliers, which have licensed, experienced staff and established procedures for foreign transactions.
When selecting an agent, always verify their license, request client references from previous foreign buyers, confirm their market specialization in your target areas, and avoid agents unwilling to provide written documentation or registration support.
Reliable agents should provide comprehensive market analysis, transparent fee structures, assistance with legal documentation, and ongoing support throughout the purchase process and beyond.
Red flags include agents requesting upfront payments, refusing to provide written agreements, lacking proper licensing, or making unrealistic promises about ownership structures or investment returns.
Will the legal system protect me as a foreign buyer and what safeguards exist?
Foreign buyers in Makassar are protected by mandatory notarial deeds, registered property agreements, and land office verification systems.
The legal system requires licensed notaries and formal documentation for all property transactions, with registered property agreements and land office verification for Hak Pakai and leasehold deals providing official protection.
However, land disputes, fraud, and improper registrations do occur, making the use of respected agencies and legal advisors crucial for additional protection beyond basic legal requirements.
Title insurance is not commonly available, so thorough due diligence including land status verification, encumbrance checks, and proper legal representation becomes essential for risk mitigation.
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 most common mistakes and pitfalls foreigners run into when buying?
The most frequent mistakes foreign buyers make in Makassar involve misunderstanding ownership rights and skipping essential due diligence steps.
Misunderstanding actual ownership rights versus expectations is the primary pitfall, with many foreigners assuming they can obtain freehold ownership similar to Western countries. Not verifying land status including encumbrances and zoning restrictions leads to legal complications and potential financial losses.
Skipping due diligence and relying solely on agent representations without independent verification creates vulnerability to fraud or misrepresentation. Not using a licensed notary or legal expert for transaction and registration processes violates legal requirements and removes essential protections.
Incomplete tax and fee planning leads to unexpected costs that can increase total investment by 5-10% beyond the purchase price.
Other common mistakes include choosing inappropriate ownership structures for their circumstances, failing to understand lease renewal procedures, and inadequate legal representation during complex transactions.
What taxes, fees, and extra costs should I expect, with a full breakdown?
Total transaction costs for foreign property buyers in Makassar typically range from 8-15% of the purchase price.
Annual Land and Building Tax (PBB) is 0.5% of assessed land and building value, paid yearly to local government. Title Transfer Fee typically costs 2-5% of purchase price and covers official ownership transfer processing.
Notary and legal fees range from 1-2% of purchase price for mandatory documentation and registration services. Stamp duty is approximately 0.5% of property value and covers official documentation requirements.
Lease registration fees cost 1% of lease value for leasehold properties and must be paid during initial registration. Bank and mortgage fees apply if using financing and can add 1-3% to total costs.
VAT and income taxes may apply on some transactions, with property rental income taxed up to 35% for non-residents, making tax planning essential for investment properties.
Can I buy a house in cash, and how does it compare to using financing?
Property can be purchased in cash with fewer complications, and cash deals are common in Makassar, especially for leasehold or smaller units.
Cash purchases eliminate financing approval delays, reduce total transaction costs by avoiding bank fees, and provide stronger negotiating positions with sellers who prefer guaranteed transactions.
Bank financing is possible but restricted for foreigners, typically requiring KITAP residency or PT PMA company structure. Down payments are high at 30-40% of property value, and loan-to-value ratios are lower with maximum 60% financing.
Interest rates for foreign borrowers typically range from 7-12% annually, significantly higher than rates available to Indonesian citizens. Approval processes can be slow with rigorous documentation requirements and lengthy evaluation periods.
Cash buyers complete transactions faster, avoid currency exchange risks during extended financing periods, and eliminate ongoing loan obligations that could complicate future visa or residency applications.
Is it possible for foreigners to get a mortgage, what rates and conditions apply, and what tips help secure one?
Foreign mortgage eligibility in Makassar is limited but available through specific banks with strict requirements.
Banks such as Commonwealth and Permata Syariah offer mortgages to foreigners who hold KITAP residency or operate through PT PMA companies, show sufficient documented income, and accept higher interest rates typically ranging from 7-12% annually.
Mortgage applicants must provide at least 30% down payment, with the property required to be leasehold (Hak Guna Bangunan) rather than other ownership structures. Maximum loan-to-value ratios are 60% compared to higher ratios available to Indonesian citizens.
Essential tips for securing foreign mortgages include establishing relationships with local banks before property shopping, preparing comprehensive documentation including income statements and business records, and negotiating flexible terms in the property contract to accommodate financing timelines.
Working with experienced mortgage brokers who specialize in foreign lending can significantly improve approval chances and help navigate complex application processes.
It's something we develop in our Indonesia property pack.
How long does the entire process usually take from offer to ownership?
The complete property purchase process in Makassar typically takes 6-12 weeks when completed professionally.
The initial phase from offer to signed agreement takes 1-3 weeks, including negotiation, initial documentation review, and agreement finalization. Due diligence and payment processing requires 2-4 weeks for thorough title verification, legal checks, and financial arrangements.
Registration and handover takes 2-4 weeks for official documentation processing, land office registration, and final ownership transfer completion.
Cash transactions can be completed faster, potentially within 6-8 weeks, while complex PT PMA setups or financing arrangements may extend the process to 12-16 weeks depending on approval timelines.
Delays commonly occur during due diligence if title issues are discovered, during visa or permit applications for new residency status, or when additional documentation is required by banks or government agencies.
Where do foreigners usually buy in Makassar and why those areas?
Foreign property buyers in Makassar concentrate in five primary areas based on infrastructure, growth potential, and lifestyle factors.
Biringkanaya attracts foreign buyers due to high growth potential, new development projects, and excellent airport access making it convenient for international travelers. Property prices remain competitive while offering strong appreciation prospects.
Manggala appeals to cost-conscious buyers seeking affordable properties in up-and-coming areas with significant development potential and improving infrastructure connections.
Rappocini draws investors due to its proximity to universities, creating stable rental demand from students and academic staff, while offering relatively affordable property prices.
Tanjung Bunga is preferred by luxury buyers seeking beachside properties with premium amenities, resort-style living, and higher-end investment opportunities.
Makassar City Center attracts business-focused investors due to its commercial environment, proximity to business hubs, and potential for high rental yields from corporate tenants and business travelers.
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 property in Makassar as a foreigner requires careful navigation of ownership restrictions, mandatory legal procedures, and higher transaction costs compared to Western markets.
Success depends on choosing appropriate ownership structures, using licensed professionals, conducting thorough due diligence, and understanding the 6-12 week timeline from offer to ownership.
Sources
- Own Property Abroad - How to Buy Property in Makassar
- Let's Move Indonesia - Buy Property as a Foreigner
- BambooRoutes - Makassar Property Guide
- Emerhub - Buying Property in Indonesia
- Cekindo - Buy a House in Indonesia
- Indonesia Real Estate - Agencies
- Indonesia Real Estate - Property Taxes
- Rumah123 - Foreigner Mortgage in Indonesia
- Nour Estates - Foreigner Loans in Indonesia
- BambooRoutes - Makassar Area Guide
-Complete Guide to Makassar Property Buying Process
-Makassar Property Taxes and Fees Breakdown
-How Much Does Property Cost in Makassar
-How to Invest in Makassar Property Market
-Should You Buy Property in Makassar
-Average Rental Prices in Makassar