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 can legally buy property in Indonesia through leasehold agreements, Hak Pakai (Right to Use), or strata-title apartments, with the Second Home Visa now being the main pathway for non-residents who invest at least IDR 2 billion (~$130,000).
As of June 2025, Bali remains the top choice for foreign property buyers with prices ranging from $200,000 in Ubud to over $2 million in Seminyak, while emerging markets like Lombok offer entry points as low as $50,000 with higher potential returns of 7-15% annually.
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 cannot own freehold land in Indonesia but can secure property through Hak Pakai (30-80 years), leasehold agreements (25-30 years), or strata-title apartments, with most buyers needing a Second Home Visa or stay permit.
The complete buying process involves choosing your ownership structure, conducting due diligence, signing contracts with a mandatory notary, paying taxes totaling about 8-10% of the property value, and registering your ownership with the National Land Office.
| Ownership Type | Duration | Requirements | Best For |
|---|---|---|---|
| Hak Pakai (Right to Use) | 30 years + extensions up to 80 years | Second Home Visa or KITAS/KITAP | Long-term residents, retirees |
| Leasehold (Hak Sewa) | 25-30 years, renewable | No residency required | Short-term investors, digital nomads |
| Strata Title (HMSRS) | 25-30 years, extendable | Second Home Visa or KITAS/KITAP | Apartment/condo buyers |
| PT PMA (Foreign Company) | Up to 80 years | Company registration | Commercial property, developers |
Fact-checked and reviewed by our local expert
Daniel Rouquette 🇫🇷
CEO & Co-Founder at Villa Finder
What types of property can foreigners actually own in Indonesia?
Foreigners cannot directly own freehold land (Hak Milik) in Indonesia, but you have four main options to legally control property.
The most popular choice is Hak Pakai (Right to Use), which gives you the right to use land and buildings for residential purposes for 30 years initially, extendable up to 80 years total. You'll need either a Second Home Visa or a stay permit (KITAS/KITAP), and the property must meet minimum price requirements - IDR 5 billion in Bali or IDR 10 billion in Jakarta.
Leasehold agreements (Hak Sewa) are simpler - you don't need any special visa, just sign a private contract for typically 25-30 years with extension options. These aren't always registered with the land office, which makes them less secure but more accessible.
For apartments, you can buy strata-title units (HMSRS) in eligible buildings, which means you own the unit but not the land underneath. The ownership period follows the land title, usually 25-30 years with extension possibilities.
If you're planning a business or rental operation, setting up a PT PMA (foreign-owned company) lets you hold property for up to 80 years, though this route is for commercial purposes, not personal residences.
It's something we develop in our Indonesia property pack.
Do you need special visas or permits to buy property in Indonesia?
Yes, you need specific visas or permits to legally purchase most types of property in Indonesia as a foreigner.
The Second Home Visa, introduced in 2022, has become the main pathway for non-residents. You qualify by investing at least IDR 2 billion (~$130,000) in Indonesian property or a local bank deposit, and it lets you stay for 5-10 years. This visa allows you to buy property under Hak Pakai or strata-title arrangements.
If you already have a KITAS (temporary stay permit) or KITAP (permanent stay permit) through work, retirement, or family connections, you're also eligible to purchase property. As of recent updates in 2025, some regions even allow foreigners to buy property with just a valid passport or visa, with the stay permit granted after the purchase.
For leasehold properties, you technically don't need any special visa - a tourist visa is sufficient since it's just a rental contract. However, having proper residency status gives you more security and options.
If you're buying through a PT PMA (foreign company), you'll need to register the company first, which has its own requirements including minimum investment thresholds.
Can you buy Indonesian property remotely or do you need to be there in person?
You don't have to be physically present in Indonesia to complete a property purchase - remote transactions are legally possible and commonly done.
You can appoint a legal representative through a power of attorney to handle the transaction on your behalf. This person can sign documents, attend notarial meetings, and complete all necessary procedures while you're abroad.
The key requirement is that all property transactions must be executed before a notary/PPAT (Land Deed Official), but your authorized representative can appear instead of you. The power of attorney document needs to be properly notarized and, if created abroad, apostilled or legalized by the Indonesian embassy.
Many foreigners successfully buy Indonesian property while living in their home countries, especially investors purchasing rental properties in Bali or Jakarta. However, visiting at least once during the due diligence phase is highly recommended to inspect the property and meet with legal professionals.
Make sure to use a reputable lawyer to draft the power of attorney and choose a trustworthy representative - ideally an independent legal professional rather than someone connected to the seller.
What taxes do foreign property owners pay in Indonesia?
Foreign property owners in Indonesia face several tax obligations, both when buying and throughout ownership.
For annual taxes, you'll pay Land and Building Tax (PBB) of 0.1-0.5% of the assessed property value each year, depending on location and property type. If you rent out your property, rental income is taxed at 10% for tax residents or 20% for non-residents on the gross rental amount, though tax treaties might reduce this to 10%.
When buying property, expect to pay Land and Building Acquisition Fee (BPHTB) at 5% of the property value above the non-taxable threshold. There's also VAT at 11% on new properties or when buying from a taxable entrepreneur. The seller pays 2.5% income tax on the transaction value.
If you eventually sell your property, you'll owe 2.5% of the sale price as income tax, while the buyer pays the 5% acquisition fee. Capital gains from property sales may also be subject to additional income tax depending on your residency status.
Don't forget about notary fees (1-2% of transaction value) and other administrative costs. In total, expect to pay 8-10% in taxes and fees when purchasing, plus ongoing annual obligations.
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What's the complete step-by-step process to buy property as a non-resident?
Here's the exact process you'll follow to buy property in Indonesia as a foreign non-resident.
First, decide on your ownership structure - Hak Pakai for long-term residence, leasehold for flexibility, strata-title for apartments, or PT PMA for business purposes. This choice determines everything else.
Next, conduct thorough due diligence with a lawyer to verify the property's ownership, check for liens or disputes, confirm zoning compliance, and ensure all building permits are valid. This step typically takes 2-4 weeks and costs around 1% of the property value.
| Step | What You Do | Documents Needed | Timeframe |
|---|---|---|---|
| 1. Prepare Documents | Gather all required paperwork | Passport, visa, tax number (NPWP), proof of funds, marriage certificate | 1-2 weeks |
| 2. Sign Preliminary Agreement | Pay 10-30% deposit | Conditional sales contract | 1 day |
| 3. Notarial Deed | Sign Sale & Purchase Agreement with notary/PPAT | All documents from step 1 | 1 day |
| 4. Pay Taxes & Fees | Settle BPHTB (5%), seller's tax (2.5%), notary fees | Tax payment receipts | 1-3 days |
| 5. Register Ownership | Notary registers with National Land Office | All transaction documents | 2-4 weeks |
| 6. Obtain Visa | Apply for Second Home Visa if needed | Property purchase proof, bank statements | 2-4 weeks |
| 7. Receive Certificate | Collect your Hak Pakai or strata-title certificate | ID and receipt | 1 day |
The entire process typically takes 2-3 months from initial agreement to receiving your ownership certificate. Having a good lawyer and notary speeds things up considerably.
Should you hire an Indonesian lawyer and notary, or can you do it yourself?
You absolutely must use a notary/PPAT for any property transaction in Indonesia - it's legally required, not optional.
While a lawyer isn't legally mandatory, it's strongly advisable to hire one, especially as a foreigner. Indonesian property law is complex, documents are in Bahasa Indonesia, and the risks of making mistakes are high. A lawyer handles due diligence, reviews contracts, ensures legal compliance, and protects your interests throughout the transaction.
The notary/PPAT drafts and legalizes the deed, handles tax payments, and registers your ownership with the National Land Office. Without them, your transaction isn't legally valid. Notary fees typically run 1-2% of the property value.
Choose independent professionals - never use a notary or lawyer recommended solely by the seller or agent, as this creates conflicts of interest. Interview multiple lawyers, check their experience with foreign buyers, and ensure they speak fluent English.
For maximum protection, use both a lawyer (for advice and due diligence) and a notary (for the legal transaction). This typically costs 2-3% of your property value but prevents costly mistakes that could result in losing your entire investment.
It's something we develop in our Indonesia property pack.
Where do most foreigners live in Indonesia right now?
Bali dominates as the top destination for foreign property buyers, with Canggu, Seminyak, Ubud, Uluwatu, and Sanur hosting the largest expat communities.
Canggu has exploded as the digital nomad capital, attracting young professionals with its beachfront co-working spaces and vibrant social scene. Seminyak remains the luxury hub with high-end villas and restaurants. Ubud appeals to wellness-focused buyers seeking a cultural experience away from the coast. Uluwatu attracts surfers and luxury villa investors, while Sanur is preferred by retirees and families for its calm beaches and established infrastructure.
In Jakarta, expatriates cluster in Kemang (the traditional expat area), SCBD (the business district), and Menteng (for embassy staff and executives). These areas offer international schools, Western restaurants, and modern apartments.
Lombok is emerging as Bali's quieter alternative, with Kuta Lombok and Selong Belanak seeing rapid foreign investment. Property prices are 50-70% lower than Bali with similar or better rental yields.
Other growing areas include Bandung (tech professionals), Surabaya (industrial expats), Yogyakarta (culture enthusiasts), and the Jakarta satellites of Tangerang and Bekasi (affordable family housing).
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 locations offer the best investment returns in 2025?
Bali still delivers the highest rental yields for foreign investors, with Canggu and Uluwatu properties earning 7-15% annually from short-term rentals.
However, Lombok presents the best growth opportunity in 2025. Entry prices in South Lombok (Kuta area) are IDR 350-450 million per are (~$24,000-31,000), compared to IDR 5 billion (~$345,000) in Seminyak. With new infrastructure including expanded airports and better roads, Lombok properties are appreciating 15-20% annually while offering similar rental yields to Bali.
- Canggu, Bali - Rental yields 10-15%, strong digital nomad demand, prices at IDR 5 billion per are
- South Lombok - Entry at IDR 350-450 million per are, 15-20% annual appreciation, emerging surf destination
- Uluwatu, Bali - Luxury market, 8-12% yields, ocean-view villas from $300,000
- Ubud, Bali - Steady 7-10% yields, wellness tourism boom, entry from $200,000
- Bandung - Tech hub growth, 6-8% yields, benefits from Jakarta overflow
- Tangerang/Bekasi - Jakarta satellites, 5-7% yields, strong local demand
- East Lombok - Ultra-low entry at IDR 75-100 million per are, highest risk but 20%+ potential returns
For lifestyle buyers prioritizing quality of life over returns, Sanur (Bali) and Yogyakarta offer established expat communities with good infrastructure at moderate prices.
What are typical property prices across Indonesia in 2025?
Property prices in Indonesia vary dramatically by location, with Bali commanding the highest prices and outer islands offering significant value.
In Bali's premium areas, land prices per are (100m²) reach IDR 5 billion (~$345,000) in Seminyak and Canggu. A typical 2-bedroom villa in these areas costs $500,000 to $1.5 million. Ubud offers better value at IDR 33-67 million per 100m² ($200,000-700,000 for villas), while Sanur sits in between at IDR 1.5 billion per are ($250,000-800,000 for houses).
| Location | Land Price (per 100m²) | 2-Bed Villa/House | 1-Bed Apartment | Rental Yield |
|---|---|---|---|---|
| Seminyak, Bali | IDR 5 billion ($345,000) | $500,000-$2 million | $200,000-$400,000 | 8-12% |
| Canggu, Bali | IDR 5 billion ($345,000) | $400,000-$1.5 million | $180,000-$350,000 | 10-15% |
| Ubud, Bali | IDR 33-67 million | $200,000-$700,000 | $100,000-$200,000 | 7-10% |
| South Lombok | IDR 350-450 million ($24,000-$31,000) | $100,000-$400,000 | $50,000-$150,000 | 8-12% |
| Jakarta Central | N/A (mostly apartments) | N/A | $150,000-$500,000 | 5-7% |
| Bandung | IDR 500 million-1 billion | $150,000-$500,000 | $80,000-$200,000 | 6-8% |
Remember that foreigners must meet minimum price requirements - IDR 5 billion for landed houses in Bali and IDR 10 billion in Jakarta, though apartments have lower thresholds at IDR 2 billion.
What expensive mistakes do foreigners commonly make when buying Indonesian property?
The biggest mistake foreigners make is using nominee arrangements where an Indonesian citizen holds the title on their behalf - this is illegal and you have zero legal protection.
Many buyers skip proper due diligence to save money, then discover their property has liens, disputes, or invalid permits. Always spend the 1-2% on professional due diligence - it's far cheaper than losing your entire investment. Some foreigners also forget to register their title with the land office, leaving them with just a contract but no legal ownership.
Tax mistakes are common too. Buyers forget about the 5% acquisition tax, 11% VAT on new properties, and annual property taxes. If you rent out your property without declaring income, you'll face penalties plus 20% tax on all rental income as a non-resident.
Using the seller's recommended notary or lawyer is another costly error. These professionals may prioritize the seller's interests, leaving you with unfavorable contract terms or missed red flags. Always hire your own independent legal team.
Finally, many foreigners buy in areas they don't know well, choosing properties that look good on paper but have poor rental demand, infrastructure issues, or are overpriced for the local market.
Can foreigners get mortgages in Indonesia and how does financing work?
Yes, some Indonesian banks offer mortgages to foreigners, but the terms are much stricter than for locals.
You'll need a valid KITAS or KITAP (stay permit) - tourist visas won't qualify. Banks typically require 30-50% down payment compared to 10-20% for Indonesians. Loan terms are shorter, usually 10-15 years maximum versus 20-30 years for locals. Interest rates for foreigners run 9-12% annually, about 2-3% higher than local rates.
Major banks offering foreigner mortgages include Bank Mandiri, BCA, and CIMB Niaga. Each has different requirements, but generally you'll need proof of income (employment contract or business ownership), Indonesian tax number (NPWP), bank statements showing stable income, and sometimes a local guarantor.
Many foreigners find it easier to secure financing from their home country or use alternative methods like developer financing, private loans, or leveraging assets back home. Some developers offer in-house payment plans with 30-40% down and the balance over 2-5 years.
Working with a mortgage broker familiar with foreigner applications significantly improves your chances and helps navigate the complex requirements.
It's something we develop in our Indonesia property pack.
What's the total cost breakdown for buying and owning property in Indonesia?
Beyond the purchase price, expect to pay 8-10% in immediate transaction costs and 1-3% annually in ongoing expenses.
When buying, you'll pay Land and Building Acquisition Fee (BPHTB) at 5% of the property value above the non-taxable threshold. The seller pays 2.5% income tax, but this often gets negotiated into the price. Add 11% VAT for new properties or when buying from a developer. Notary and legal fees typically total 1-2% of the transaction value.
For annual costs, Land and Building Tax (PBB) runs 0.1-0.5% of the assessed value. If you rent out the property, expect to pay 10% tax as a resident or 20% as a non-resident on gross rental income. Property management fees (if using a company) are typically 20-30% of rental income for short-term rentals or 10% for long-term.
Don't forget maintenance costs - pools, gardens, and tropical weather mean higher upkeep. Budget $200-500 monthly for a villa or $50-150 for an apartment. Insurance costs about 0.1-0.3% of property value annually.
Registration and permit fees vary by property type but usually total IDR 5-10 million (~$350-700) for initial setup.
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 Indonesia as a foreigner requires careful navigation of ownership structures, visa requirements, and legal processes, but the potential rewards - especially in emerging markets like Lombok with 15-20% annual appreciation - make it an attractive investment destination in 2025.
Remember that while you cannot own freehold land, options like Hak Pakai (up to 80 years) and leasehold agreements provide secure, long-term control of property, with the Second Home Visa opening doors for non-residents who invest at least IDR 2 billion (~$130,000).
Sources
- Exotiq Property - Can Foreigners Buy Property in Indonesia
- Let's Move Indonesia - Buy Property as a Foreigner
- BVR Property - Property Rights in Indonesia
- Immigrant Invest - Indonesia Second Home Visa
- CPT Corporate - Step by Step Guide
- Invest Islands - Property Tax Guide
- Wise - Buy Property in Indonesia
- Exotiq Property - Where Expats Live
- CrowdSQ - Top 5 Cities for Investment
- Venture Villas - Bali Market Trends 2025