How to invest in property in Makassar?

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

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 Makassar. 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, Surabaya, and Makassar. 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.

How difficult is it for foreigners to invest in Makassar property compared to Western countries?

Investing in Makassar property as a foreigner is significantly more complex than in most Western countries where direct ownership is typically allowed.

Indonesia restricts foreign ownership through its Basic Agrarian Law, meaning foreigners cannot own freehold land (Hak Milik) that Indonesian citizens can purchase. Instead, foreign investors must use alternative structures like leaseholds, use rights, or company ownership.

Western countries like Australia, Canada, or the UK generally allow foreigners to purchase freehold property directly, though they may impose additional taxes or registration requirements. In contrast, Makassar requires foreigners to navigate multiple legal structures, each with different time limits, renewal processes, and documentation requirements.

As of September 2025, recent policy changes have simplified some aspects, allowing certain property purchases with just a passport for specified types and values, but the overall process remains more restrictive than Western markets.

The complexity extends to financing, as foreign mortgage options are limited and typically require higher down payments and shorter loan terms compared to domestic buyers or Western property markets.

What property types can foreigners actually buy in Makassar, and what's prohibited?

Foreigners can purchase property in Makassar through several legal mechanisms, but direct freehold ownership remains impossible.

Permitted property types include leasehold properties with terms of 25-30 years (renewable), covering both houses and land. The Hak Pakai (Right to Use) system allows foreigners with KITAS/KITAP or, under new regulations, sometimes just a passport to acquire use rights for similar periods.

Hak Guna Bangunan (Right to Build) permits foreigners to construct and own buildings while the land remains under Indonesian ownership. Apartment and condominium units are available to foreigners, though they cannot own more than 49% of any single building.

Company structures through PT PMA (foreign-owned Indonesian companies) provide another pathway, allowing investment properties under use rights with more flexible terms.

Prohibited purchases include Hak Milik (freehold land) reserved exclusively for Indonesian citizens, agricultural land, properties in border or strategic areas, and any rural properties designated for local use only.

What's the complete step-by-step buying process from start to finish?

Step	Process	Timeline
1. Structure Selection	Choose ownership type (leasehold, Hak Pakai, PT PMA)	1-2 weeks
2. Property Search	Identify properties and conduct market research	2-4 weeks
3. Due Diligence	Hire notary, check certificates, verify ownership	2-4 weeks
4. Financing	Secure cash funds or arrange mortgage	1-3 weeks
5. Negotiation	Agree on price, terms, and conditions	1-2 weeks
6. Contract Signing	Execute sale agreement, notary certification	1 week
7. Payment	Make deposit (typically 30%) and show financial capability	1 week
8. Registration	Register with local and national land offices	2-4 weeks
9. Final Approval	Receive ownership or lease certificate	1-2 weeks

Which documents are mandatory versus optional for the purchase?

Mandatory documents for foreign property purchase in Makassar include a valid passport with minimum 36 months remaining validity.

Essential paperwork includes an Indonesian tax number (NPWP) when required, appropriate visa documentation (KITAS/KITAP for Hak Pakai purchases), and comprehensive proof of financial capability through bank statements. The notarized sale and purchase agreement (Akta Jual Beli) is legally required for all transactions.

Building permits (IMB) must be verified and included when applicable to ensure the property complies with local construction regulations.

Optional or conditional documents vary based on your chosen ownership structure. PT PMA purchases require complete company documentation including articles of incorporation and shareholder agreements. Joint purchases with Indonesian spouses need marriage certificates, while business-oriented acquisitions may require additional tax documentation.

Power of attorney documents become necessary if you plan to complete the transaction through a legal representative rather than appearing in person at the final registration.

Can you complete the entire process remotely or must you be physically present?

Most of the Makassar property buying process can be handled remotely, including property searches, initial negotiations, and contract preparations.

However, physical presence or authorized legal representation remains required for critical final steps. The notarization process and official registration at the Land Office typically demand in-person appearance or a properly executed power of attorney.

Recent legislative changes in 2025 are gradually making remote purchases more feasible, but current practice still requires either personal attendance or legal representation for document signing and official registration.

Remote buyers should prepare comprehensive power of attorney documentation, ensuring their legal representative has explicit authority to complete all necessary transactions, including final payments, document signing, and certificate collection.

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

What are all the taxes, costs, and fees involved with a complete breakdown?

Property investment costs in Makassar typically total 6-8% of the purchase price beyond the property value itself.

Annual Land and Building Tax (PBB) amounts to 0.5% of the officially assessed property value, paid yearly regardless of occupancy. Transfer fees represent 2% of the appraised value, calculated during the ownership transfer process.

Professional service costs include notary fees ranging from 1-2% of the transaction value and legal or administrative fees typically between IDR 10-25 million per transaction. Stamp duties can reach up to 0.5% of the purchase price.

Real estate agent commissions usually cost 2-3% of the property price, while lease registration fees add another 1% of the total lease value for leasehold purchases.

Additional tax obligations include income tax on rental income if you plan to lease the property, with progressive rates reaching up to 35% for high annual rental income. Foreign buyers should budget an additional 10-15% above the listed property price to cover all associated costs and fees.

Can foreigners pay cash or get mortgages, and what are the conditions?

Cash purchases represent the most straightforward and common method for foreign property buyers in Makassar.

Mortgage options for foreigners are now available but remain limited to select banks with strict requirements. Eligible buyers must hold Indonesian residency status (KITAS/KITAP), meet higher minimum property values, and accept stricter lending conditions including loan-to-value ratios of 60-70%.

Interest rates for foreign borrowers typically range from 8-12% annually, significantly higher than rates for Indonesian citizens. Maximum loan periods are shorter, usually capped at 20 years compared to 25-30 years for locals.

Banks offering specialized foreign mortgage products include Permata Bank and Commonwealth Bank, but documentation requirements are extensive, requiring proof of Indonesian income, employment history, and comprehensive financial statements.

Successful mortgage applications require advance preparation of all documentation, eligibility confirmation with multiple banks, and consideration of reputable international banks with Indonesian operations for potentially better terms and service.

How long does the complete purchase process typically take?

The total timeline for purchasing property in Makassar ranges from 1-3 months for straightforward transactions.

Initial research and negotiation phases typically require 2-6 weeks, depending on market knowledge and property availability. Due diligence and legal preparation add another 2-4 weeks for document verification, legal checks, and notary preparation.

Contract signing and payment processing usually take 1-2 weeks once all parties agree on terms and conditions. The final transfer and registration phase requires 2-4 weeks for official processing through local and national land offices.

Company-based purchases through PT PMA structures can extend timelines to 10+ weeks due to additional corporate documentation and approval requirements.

Factors that can accelerate the process include having all documentation prepared in advance, using experienced legal representation, and choosing cash payment over mortgage financing.

How reliable are Makassar real estate agents and how do you identify trustworthy ones?

Real estate agents in Makassar vary significantly in reliability, ranging from well-established licensed firms to informal or semi-professional operators.

Trustworthy agents typically hold verifiable business licenses, maintain established local reputations, and provide clear references from previous foreign clients. Look for companies with positive Google reviews, international affiliations, or partnerships with recognized property developers.

Reliable agents will insist on proper documentation, official contracts, and notary involvement throughout the transaction process. They should be transparent about all costs, fees, and legal requirements without pressuring rushed decisions.

Warning signs include agents requesting cash-only transactions without proper documentation, promises of arrangements that seem too good to be true, or reluctance to provide references or business registration details.

The safest approach involves working with agents recommended by established law firms, international businesses, or other foreign property owners who have successfully completed purchases in Makassar.

Will Indonesia's legal system protect foreign buyers if problems arise?

Foreign buyers receive increasing legal protection under Indonesia's evolving property laws, but the system generally prioritizes local interests in disputes.

Indonesian courts handle property disputes through established legal procedures, but foreign buyers face language barriers, complex legal processes, and potentially longer resolution times. Recent legislation has strengthened foreign investor protections, particularly for properly documented transactions.

Essential precautions include conducting thorough due diligence through registered notaries, retaining qualified local real estate lawyers throughout the process, and ensuring all agreements include proper legal documentation and registration.

Never rely on verbal agreements or informal arrangements, as Indonesian law requires written contracts and official registration for legal enforceability. Always use licensed notaries and avoid cash-only transactions without proper legal documentation.

The most effective protection comes from working with experienced legal professionals who understand both Indonesian property law and foreign investor rights, ensuring all transactions comply fully with current regulations.

What are the most common mistakes foreigners make when buying Makassar property?

1. **Attempting direct freehold purchases:** Many foreigners try to buy Hak Milik land directly, which is illegal and can result in transaction cancellation and financial loss.2. **Inadequate legal structure planning:** Failing to choose the appropriate ownership structure (leasehold, Hak Pakai, PT PMA) for their specific situation and long-term goals.3. **Working with unlicensed agents:** Trusting informal agents or brokers without proper credentials, leading to fraudulent transactions or legal complications.4. **Insufficient due diligence:** Not properly verifying property history, seller ownership, land certificates, or potential legal encumbrances before purchase.5. **Underestimating total costs:** Budget planning that only considers purchase price without accounting for taxes, fees, notary costs, and ongoing expenses.6. **Poor market research:** Overpaying due to limited local market knowledge or failing to negotiate effectively based on comparable property values.7. **Ignoring zoning regulations:** Purchasing property without understanding local land use restrictions or development limitations.

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.

Which neighborhoods do foreigners typically choose in Makassar?

Foreign property buyers in Makassar gravitate toward neighborhoods offering lifestyle amenities, international accessibility, and investment potential.

Losari Beach represents the most popular area for foreign investment, famous for vibrant sunset views, numerous restaurants, and easy access to international facilities. The beachfront location provides both lifestyle appeal and strong rental potential for tourism-related income.

Areas around Fort Rotterdam attract buyers interested in cultural significance and central location, offering proximity to historical sites while maintaining access to modern amenities and business districts.

Downtown Makassar appeals to investors seeking commercial opportunities, nightlife access, and improved infrastructure development. Properties near major business centers typically show stronger appreciation potential and rental demand.

Neighborhoods near international schools and hotels draw foreign families and business professionals, creating consistent rental markets and property value stability. Areas around major development projects like Makassar New Port and commercial centers attract both local and foreign buyers looking for growth potential and modern amenities.

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.

Sources

1. Own Property Abroad - How to Buy Property in Makassar
2. Let's Move Indonesia - Buy Property as a Foreigner
3. Bali Business Consulting - Foreigners Purchase Real Estate
4. Global Property Guide - Indonesia Buying Guide
5. Indonesia Incorp - Real Estate Indonesia
6. Let's Move Indonesia - Expat Mortgage Possibilities
7. BambooRoutes - Makassar Property
8. Indonesia Real Estate - Property Buying Process
9. iLot Property Bali - Indonesian Property Loan
10. Rumah123 - Foreigner Mortgage Indonesia