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 can purchase property through specific legal structures.
Property ownership for non-Indonesians is limited to apartments, condominiums, and houses with Right to Use (Hak Pakai) titles, with ownership periods typically lasting 30 years and renewable. While the process requires proper visa status and careful legal navigation, foreign property investment remains viable in popular destinations like Bali, Jakarta, and Lombok.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 buy apartments and houses on Right to Use land in Indonesia for 30-year renewable periods, but cannot own freehold land directly.
All foreign nationals face the same restrictions regardless of nationality, and valid residence permits (KITAS or KITAP) are required for property ownership.
| Property Type | Foreign Ownership | Key Restrictions |
|---|---|---|
| Apartments/Condos | Allowed | 30-year renewable ownership |
| Houses (Hak Pakai) | Allowed | Right to Use title only |
| Freehold Land | Prohibited | Indonesian citizens only |
| Long-term Leases | Allowed | Up to 70 years if structured properly |
| Commercial Property | Via PT PMA company | Foreign-owned company required |
| Popular Investment Areas | Bali, Jakarta, Lombok | 5-10% rental yields in Bali |
| Average Prices | USD 800-5,000/sqm | Varies by location and property type |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
What types of property can foreigners legally purchase in Indonesia, and what restrictions exist compared to locals?
Foreigners in Indonesia cannot own freehold land (Hak Milik) outright, which is reserved exclusively for Indonesian citizens.
Foreign nationals can purchase apartments and condominium units with ownership typically granted for 30-year renewable periods. They can also buy houses built on land with Right to Use (Hak Pakai) title for set terms, usually 30 years with extension possibilities.
Long-term lease arrangements allow foreigners to lease land for up to 70 years if structured correctly through proper legal channels. Commercial property purchases require establishing a foreign-owned company (PT PMA) to facilitate the transaction.
Indonesian citizens enjoy full freehold ownership rights and can purchase any property type without time limitations or structural requirements. Local buyers can own land directly under Hak Milik title, while foreigners must work within the Right to Use framework or leasehold arrangements.
It's something we develop in our Indonesia property pack.
Do property ownership rules vary by nationality, or do all foreigners face identical restrictions?
All non-Indonesian nationals face identical property ownership restrictions regardless of their country of origin.
No nationality receives preferential treatment or additional privileges in Indonesia's property market. Whether you're American, European, Australian, or from any other country, the same legal frameworks, ownership periods, and requirements apply to every foreign buyer.
The Indonesian government applies these regulations uniformly across all foreign nationals without exception. Special bilateral agreements or diplomatic relationships do not create property ownership advantages for citizens of specific countries.
This standardized approach ensures consistent application of property laws and eliminates potential discrimination based on nationality in real estate transactions.
What visa or residency status must foreigners have to buy and own property in Indonesia?
Foreigners must hold valid stay permits to purchase property in Indonesia, either temporary (KITAS) or permanent (KITAP) residency status.
The Indonesia Second Home Visa program offers property investment pathways for foreign buyers willing to deposit substantial funds or invest directly in real estate. Tourist visas do not qualify for property ownership, making proper residency documentation essential.
KITAS holders can own property for the duration of their permit validity, typically one to five years depending on the specific visa category. KITAP holders enjoy more stable ownership rights due to their permanent residency status.
Foreign buyers must maintain their residency status throughout the ownership period to retain property rights. Expired or invalid permits can jeopardize property ownership and complicate future transactions.
Can foreigners complete property purchases remotely, or is physical presence required in Indonesia?
Property purchases can be completed remotely through legally appointed representatives and notarized power of attorney arrangements.
While remote transactions are legally possible, physical presence during document signing and due diligence phases is strongly recommended for security and accuracy. Remote buyers must work with licensed local agents and qualified legal representatives to ensure proper documentation and compliance.
All transactions require notarization by Indonesian notaries, and remote buyers must provide authenticated power of attorney documents to their local representatives. Digital signatures and remote notarization are not accepted for property transactions under Indonesian law.
Property verification, title checks, and permit validation are more effectively conducted with direct oversight, making physical presence valuable for complex purchases. Remote buyers face higher risks of documentation errors or fraudulent transactions without on-ground supervision.
Don't lose money on your property in Indonesia
100% of people who have lost money there have spent less than 1 hour researching the market. We have reviewed everything there is to know. Grab our guide now.
What is the complete step-by-step process for foreigners buying property, and which documents are needed at each stage?
| Purchase Step | Required Documents | Key Actions |
|---|---|---|
| Initial Setup | Passport, KITAS/KITAP | Establish PT PMA if needed for commercial property |
| Property Search | Financial proof, tax number (NPWP) | Work with licensed agent, verify credentials |
| Due Diligence | Property certificates, building permits | Verify legal ownership and construction permits |
| Agreement Signing | Marriage certificate (if joint), notarized SPA | Sign Sale and Purchase Agreement before notary |
| Payment & Taxes | Bank statements, tax receipts | Pay transfer tax (1-5%), VAT, agent commissions |
| Title Transfer | Deed of Sale, land certificates | Complete ownership transfer through notary |
| Registration | All previous documents | Register with local authorities, obtain final title |
Is hiring a lawyer mandatory, recommended, or optional when foreigners purchase Indonesian property?
Legal representation is not legally mandatory for foreign property purchases in Indonesia but is strongly recommended for protection and compliance.
Indonesian property law contains complex regulations that foreign buyers may not fully understand without professional guidance. Lawyers provide essential due diligence services including title verification, permit checks, and contract review to prevent costly mistakes.
Legal professionals help navigate the Right to Use (Hak Pakai) system, ensure proper documentation, and verify that all permits and certificates are authentic and current. They also protect buyers from common scams like illegal nominee arrangements or fraudulent property schemes.
The cost of legal services typically ranges from 1-3% of property value, a worthwhile investment considering the potential risks of unrepresented transactions. Experienced lawyers familiar with foreign property regulations can expedite the process and ensure full legal compliance.
Foreign buyers attempting to purchase without legal representation face significantly higher risks of title disputes, invalid permits, or regulatory violations that could result in property loss.
What are all the taxes, fees, and additional costs involved in buying, owning, renting out, and selling Indonesian property?
Property purchase costs include Transfer Tax (BPHTB) ranging from 1-5% of property value, plus real estate agent commissions typically 2-5%.
Annual ownership costs include Land Tax (PBB) and Building Tax (IMB), along with notary fees, registration fees, and legal service charges during the purchase process. VAT may apply depending on property type and seller status.
Rental income generates tax obligations for foreign property owners, with income tax rates varying based on total annual earnings and residency status. Property management fees typically range 8-15% of rental income for professional services.
Resale transactions incur capital gains tax, agent commissions, and administrative fees for title transfer. Foreign sellers may face withholding tax requirements and additional documentation costs for international money transfers.
It's something we develop in our Indonesia property pack.
Can foreigners obtain mortgages in Indonesia, and what are the rates, conditions, and practical requirements?
Mortgage financing for foreigners is possible but uncommon, as most international buyers purchase Indonesian property with cash payments.
Indonesian banks offering foreign mortgages typically require permanent residency status (KITAP) or long-term presence with substantial local income documentation. Interest rates generally range from 8-12% annually with stricter lending conditions compared to loans for Indonesian citizens.
Loan-to-value ratios for foreigners rarely exceed 60-70% of property value, requiring substantial down payments of 30-40%. Banks demand extensive financial documentation including income statements, tax returns, employment contracts, and credit history from both Indonesia and the buyer's home country.
Practical challenges include currency exchange risks, complex approval processes, and limited bank options willing to finance foreign property purchases. Most lenders require local guarantors or collateral beyond the purchased property.
Foreign buyers should expect 3-6 month approval timeframes and higher fees for mortgage processing, legal documentation, and property valuation compared to cash transactions.
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 Indonesian areas attract the most foreign buyers for living, rental investment, or long-term growth?
Bali dominates foreign property investment with the highest tourism numbers, rental demand, and established expat communities making it the top choice for both living and investment purposes.
Jakarta attracts foreign buyers seeking urban investment opportunities, commercial real estate, and proximity to Indonesia's business center. The capital offers strong rental markets for apartments and condominiums targeting local and international professionals.
Lombok has emerged as a secondary investment destination with lower entry costs and developing tourism infrastructure. Batam appeals to foreign investors due to its proximity to Singapore and growing industrial development.
Yogyakarta and Bandung offer educational and cultural attractions for long-term foreign residents, though with smaller property markets compared to primary destinations. These areas provide more affordable living costs and authentic Indonesian cultural experiences.
What do recent data show about livability, tourism growth, rental returns, and market forecasts in popular Indonesian areas?
Bali consistently delivers the strongest rental yields ranging from 5-10% annually as of September 2025, driven by year-round tourism and short-term rental demand.
Tourism in Bali reached pre-pandemic levels by 2024 with international arrivals exceeding 5 million visitors annually, creating sustained rental income opportunities. Jakarta's residential rental market offers 4-8% yields primarily from long-term tenants in the business sector.
Lombok shows emerging potential with 4-8% rental yields as infrastructure development and government tourism promotion increase visitor numbers. Property price growth in Bali averaged 6-8% annually from 2023-2025, outperforming most other Indonesian regions.
Market forecasts predict continued strength in Bali's property sector through 2026-2027, with Jakarta showing steady urban residential demand. Lombok and Batam are projected to experience moderate growth as secondary markets mature.
Livability rankings consistently favor Bali for international residents due to healthcare access, expat services, and English-language amenities, while Jakarta scores higher for career opportunities and urban conveniences.
How do property prices vary across Indonesian cities and regions for both residential living and investment purposes?
| Location | Residential Price Range (USD/sqm) | Investment Price Range (USD/sqm) |
|---|---|---|
| Bali (Canggu, Seminyak) | $1,500 - $3,500 | $1,200 - $3,200 |
| Jakarta (Central areas) | $2,000 - $5,000 | $1,500 - $4,500 |
| Bali (Ubud, rural areas) | $800 - $2,000 | $700 - $1,800 |
| Lombok (Gili Islands area) | $800 - $2,500 | $700 - $2,100 |
| Batam (Marina areas) | $900 - $2,000 | $800 - $1,900 |
| Yogyakarta | $600 - $1,500 | $500 - $1,300 |
| Bandung | $700 - $1,800 | $600 - $1,600 |
What are the most frequent mistakes and pitfalls foreigners encounter when buying Indonesian property, and how can they be avoided?
1. **Using illegal nominee arrangements**: Many foreigners attempt to circumvent ownership laws by using Indonesian citizens as proxy owners, risking complete property loss when relationships sour or legal challenges arise.2. **Inadequate due diligence**: Failing to verify building permits, land certificates, or property licenses leads to legal complications, fines, or forced demolition of illegal structures.3. **Ignoring residency requirements**: Purchasing property without proper KITAS or KITAP status creates ownership vulnerabilities and potential legal violations that can result in property forfeiture.4. **Underestimating ongoing costs**: Many buyers focus only on purchase price while overlooking annual taxes, maintenance fees, management costs, and currency exchange risks for overseas income.5. **Insufficient legal representation**: Attempting to navigate Indonesia's complex property laws without qualified legal counsel frequently results in invalid contracts, title disputes, or regulatory violations that could have been prevented with proper guidance.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 property ownership in Indonesia requires careful navigation of legal frameworks, but offers viable opportunities for those who understand the regulations.
Success depends on proper residency status, qualified legal representation, and realistic expectations about ownership structures and ongoing costs.
Sources
- Wise - Buy Property in Indonesia
- Let's Move Indonesia - Property Ownership Laws Guide
- Makarim - Foreigners Property Rights
- Cekindo - Buy a House in Indonesia
- Emerhub - Property Laws and Regulations
- Exotiq Property - Can Foreigners Buy Property
- Emerhub - Buying Property Guide
- Mercury Estate - Property Purchase Procedure
- Indonesia Incorp - How to Buy Property
- DSG Pay - Property Buying for Foreigners