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
Buying residential property in Medan as a foreigner comes with unique risks that most buyers only discover after it is too late.
We constantly update this blog post to reflect the latest regulations, scam patterns, and market conditions specific to Medan in early 2026.
This guide covers the legal structures you can actually use, the scams that target foreigners most often, and the verification steps that separate safe transactions from disasters.
And if you're planning to buy a property in this place, you may want to download our pack covering the real estate market in Medan.
How risky is buying property in Medan as a foreigner in 2026?
Can foreigners legally own properties in Medan in 2026?
As of early 2026, foreigners cannot own freehold land (called Hak Milik) in Medan because Indonesian law reserves this right exclusively for Indonesian citizens.
The main restriction foreigners face in Medan is that they must use a registered Right to Use (Hak Pakai) title rather than full ownership, and North Sumatra province requires a minimum purchase price of IDR 2 billion (around USD 125,000) for landed houses.
The most common legal structure foreigners use in Medan is Hak Pakai, which grants usage rights for an initial 30 years, extendable by 20 years, and renewable for another 30 years, totaling up to 80 years of registered, enforceable rights.
What makes this important is that Hak Pakai is a registered land right at the National Land Agency (BPN), meaning you have legal protection that can be enforced in court, unlike informal arrangements or nominee structures.
The single biggest trap foreigners fall into in Medan is accepting a "nominee" arrangement where an Indonesian citizen holds the title on their behalf, which is illegal and leaves the foreigner with no legal claim if the relationship turns hostile.
What buyer rights do foreigners actually have in Medan in 2026?
As of early 2026, foreigners in Medan have the right to hold a registered Hak Pakai title that appears in the National Land Agency's records, which means their usage rights are enforceable and transferable to other eligible foreigners or back to Indonesian citizens.
If a seller breaches a contract in Medan, foreigners can pursue legal remedies through Indonesian courts, but the practical reality is that disputes are slow and uncertain, so the best protection is ensuring the transaction is properly registered with BPN rather than relying on private agreements alone.
The most common right that foreigners mistakenly assume they have in Medan is the ability to hold freehold title through a nominee arrangement, which is not a legal right at all and leaves them with zero enforceable ownership if the nominee changes their mind, dies, or sells the property.
How strong is contract enforcement in Medan right now?
Contract enforcement for real estate transactions in Medan sits in the middle band compared to global standards, meaning it is not lawless but also not as reliable as Singapore or Australia, with Indonesia ranking 69th out of 143 countries on the World Justice Project's 2025 Rule of Law Index.
The main weakness foreigners should know about in Medan is that civil justice can be slow and unpredictable, so even if you have a valid contract, enforcing it through courts may take years and cost more than the property is worth.
This is why experienced buyers in Medan design their transactions to avoid disputes entirely by verifying everything through the land office before signing, rather than assuming they can sue their way out of problems later.
By the way, we detail all the documents you need and what they mean in our property pack covering Medan.
Buying real estate in Medan can be risky
An increasing number of foreign investors are showing interest. However, 90% of them will make mistakes. Avoid the pitfalls with our comprehensive guide.
Which scams target foreign buyers in Medan right now?
Are scams against foreigners common in Medan right now?
Real estate scams targeting foreigners in Medan are common enough that you should assume adversarial behavior in every transaction, with Indonesia's financial regulator (OJK) reporting over 166,000 scam cases nationally in mid-2025 with losses exceeding IDR 3.4 trillion.
The type of property transaction most frequently targeted by scammers in Medan is the sale of landed houses to foreigners who believe they can "own" freehold through a nominee, because these buyers are already operating outside the legal system and have no official recourse.
The profile of foreign buyer most commonly targeted in Medan is someone who arrives with limited knowledge of Indonesian law, over-trusts local agents or acquaintances, and accepts informal arrangements to avoid the complexity of proper Hak Pakai registration.
The single biggest warning sign that a deal may be a scam in Medan is when someone discourages you from verifying ownership through the land office (BPN) by saying it will "take too long" or that they "know people" who can skip the process.
What are the top three scams foreigners face in Medan right now?
The top three scams foreigners face in Medan are nominee ownership fraud (where a local holds the title and later claims the property), fake or dirty title schemes (forged certificates or double sales to multiple buyers), and hidden encumbrance traps (undisclosed mortgages or liens that block the transfer).
The most common scam in Medan unfolds like this: a local contact offers to hold freehold title "on your behalf," you pay the full price, sign a private side agreement, and later discover that legally the property belongs entirely to the nominee, who can sell it, mortgage it, or simply refuse to cooperate.
The most effective protection against each of these three scams in Medan is the same: verify ownership and encumbrances through the land office (BPN) before paying any money, use a licensed notary (PPAT) to handle the transaction, and never sign any arrangement that keeps your name off the official registry.
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.
How do I verify the seller and ownership in Medan without getting fooled?
How do I confirm the seller is the real owner in Medan?
The standard verification process in Medan starts with requesting the land certificate (SHM, HGB, or Hak Pakai) from the seller, then having your notary (PPAT) verify the certificate's authenticity and current status directly with the Medan land office (BPN Kota Medan).
The official document foreigners should check in Medan is the land book record held at BPN, which shows the registered owner's name, any encumbrances, and the certificate's validity, because paper certificates can be forged but the land office database cannot be faked.
The most common trick fake sellers use in Medan is presenting a photocopy or screenshot of a certificate and claiming the original is "at the bank" or "being processed," which is a red flag because legitimate sellers can always produce original documents for verification, and this happens commonly enough that you should treat it as an immediate warning sign.
Where do I check liens or mortgages on a property in Medan?
The official registry where you check liens or mortgages on a property in Medan is the National Land Agency (BPN) office for Kota Medan, which maintains records of all registered security rights (Hak Tanggungan) and encumbrances against each land parcel.
When checking for liens in Medan, you should specifically request a certificate verification (pengecekan sertifikat) and encumbrance check that shows whether any Hak Tanggungan (mortgage) is registered, along with any court orders, disputes, or administrative blocks on the title.
The type of encumbrance most commonly missed by foreign buyers in Medan is unpaid property taxes (PBB) that create a de facto lien on the property, because these do not always appear on the certificate but can block registration or create surprise costs at closing.
It's one of the aspects we cover in our our pack about the real estate market in Medan.
How do I spot forged documents in Medan right now?
The most common type of forged document used in property scams in Medan is a fake or altered land certificate (SHM/HGB), which sometimes happens in informal transactions where buyers skip land office verification and rely only on the paper document shown by the seller.
The red flags that indicate a document may be forged in Medan include inconsistent fonts or printing quality, certificate numbers that do not match BPN records, missing security features, and sellers who discourage you from verifying at the land office or rush you to sign before checking.
The official verification method you should use in Medan is to have your notary (PPAT) submit the certificate for a formal check (pengecekan) at BPN Kota Medan, which will confirm whether the certificate matches the land book, whether the registered owner matches the seller, and whether there are any blocks or disputes.
Get the full checklist for your due diligence in Medan
Don't repeat the same mistakes others have made before you. Make sure everything is in order before signing your sales contract.
What "grey-area" practices should I watch for in Medan?
What hidden costs surprise foreigners when buying a property in Medan?
The three most common hidden costs foreigners overlook in Medan are the acquisition tax (BPHTB) at 5% of the transaction value minus the IDR 80 million threshold (around IDR 50 million or USD 3,100 or EUR 2,900 on a typical transaction), notary/PPAT fees ranging from 0.5% to 1% (around IDR 10 to 20 million or USD 625 to 1,250), and miscellaneous administrative costs that can add another IDR 2 to 5 million (USD 125 to 310).
The hidden cost most often deliberately concealed by sellers or agents in Medan is the true BPHTB calculation, because parties sometimes agree to declare a lower transaction value on paper to reduce taxes, which is a common practice that creates legal risk for the buyer if authorities later audit the transaction.
If you want to go into more details, we also have a blog article detailing all the property taxes and fees in Medan.
Are "cash under the table" requests common in Medan right now?
Cash under the table requests in Medan property transactions are common, often framed as "admin fees," "speed money," or incentives to declare a lower transaction price on official documents, reflecting broader patterns in Indonesia's business environment.
The typical reason sellers give for requesting undeclared cash payments in Medan is to reduce the official transaction value and lower taxes (BPHTB for the buyer, income tax for the seller), with some also citing "faster processing" at government offices.
The legal risks foreigners face if they agree to an undeclared cash payment in Medan include having their transaction audited and reassessed for tax, potential penalties for tax evasion, and the practical problem that if disputes arise later, you can only prove you paid the lower declared amount, not what you actually spent.
Are side agreements used to bypass rules in Medan right now?
Side agreements to bypass rules are common in Medan property transactions, especially when foreigners want to "own" freehold land through nominee arrangements or when both parties want to declare a lower transaction value to reduce taxes.
The most common type of side agreement in Medan is the nominee ownership contract, where an Indonesian citizen holds the title and signs a private agreement acknowledging the foreigner as the "true" owner, but this document has no legal force and cannot override the official land registry.
The legal consequences foreigners face if a side agreement is discovered in Medan include the agreement being declared void by Indonesian courts (since it violates land ownership laws), potential loss of the entire property with no compensation, and in some cases immigration consequences if authorities determine the arrangement was designed to circumvent nationality restrictions.
We made this infographic to show you how property prices in Indonesia compare to other big cities across the region. It breaks down the average price per square meter in city centers, so you can see how cities stack up. It’s an easy way to spot where you might get the best value for your money. We hope you like it.
Can I trust real estate agents in Medan in 2026?
Are real estate agents regulated in Medan in 2026?
As of early 2026, real estate agents in Medan are regulated under Indonesia's Ministry of Trade rules (Permendag No. 51/2017), which require property brokerage companies (P4) to be properly registered, employ certified brokers, and use written agreements with clients.
The official license or certification a legitimate real estate agent should have in Medan is registration as a property brokerage company (P4) with the Ministry of Trade, and individual agents should hold a competency certificate (sertifikat kompetensi) from an accredited institution.
Foreigners can verify whether an agent is properly licensed in Medan by requesting proof of the company's P4 registration and the agent's personal competency certificate, then checking with the Ministry of Trade or local trade office if anything seems unclear, though in practice many foreigners simply ask their notary (PPAT) to recommend a vetted agent.
Please note that we have a list of contacts for you in our property pack about Medan.
What agent fee percentage is normal in Medan in 2026?
As of early 2026, the normal agent fee percentage in Medan for residential property sales is around 2% to 3% of the transaction value, which is consistent with standard practice across Indonesia's major cities.
The typical range of agent fee percentages in Medan covers most transactions at 2% to 3%, though harder-to-sell properties or those requiring extensive marketing may see fees up to 5%, while anything significantly higher should be questioned.
In Medan, the seller typically pays the agent commission in standard transactions, though this should always be confirmed in writing before you engage an agent, and buyers should watch for agents who try to add undisclosed markups to the seller's asking price.
Get the full checklist for your due diligence in Medan
Don't repeat the same mistakes others have made before you. Make sure everything is in order before signing your sales contract.
What due diligence actually prevents disasters in Medan?
What structural inspection is standard in Medan right now?
The standard structural inspection process for property purchases in Medan is not mandatory by law, so buyers must arrange and pay for their own inspection, which means many foreigners skip this step and later regret it when problems emerge.
A qualified inspector in Medan should check the roof condition and waterproofing, wall integrity and signs of cracking or moisture, electrical systems and grounding, plumbing and drainage (especially important given Medan's heavy rainfall), and foundation stability.
The type of professional qualified to perform structural inspections in Medan is a licensed civil engineer or building inspector, and while there is no single official registry, your notary or a reputable agent can usually recommend someone with local experience.
The most common structural issues inspections reveal in Medan properties are water damage from poor drainage or leaky roofs, electrical wiring that does not meet safety standards, and foundation settling or cracking in areas prone to flooding or with poor soil conditions.
How do I confirm exact boundaries in Medan?
The standard process for confirming exact property boundaries in Medan involves requesting a land measurement (pengukuran) from BPN that compares the registered parcel dimensions in the land book against the physical boundaries on the ground.
The official document that shows the legal boundaries of a property in Medan is the land certificate (sertifikat tanah) which includes a site map (surat ukur) with dimensions, though this map should be verified against BPN's records because the physical markers may have shifted over time.
The most common boundary dispute that affects foreign buyers in Medan involves neighbors who have gradually encroached on the property over years, building fences or structures beyond their legal boundary, which only becomes apparent when you try to develop or sell the land.
The professional you should hire to physically verify boundaries in Medan is a licensed surveyor (juru ukur) who can compare the cadastral records at BPN with actual conditions on site, and your notary (PPAT) can typically arrange this as part of the transaction process.
What defects are commonly hidden in Medan right now?
The top three defects sellers frequently conceal in Medan are water damage hidden under fresh paint (common), electrical systems that look modern but are poorly grounded (common), and unpermitted extensions or renovations that do not match official building permits (sometimes happens, especially in fast-developing areas).
The inspection technique that helps uncover hidden defects in Medan is a combination of moisture meters to detect water damage behind walls, electrical testing equipment to verify grounding and circuit safety, and a document check comparing the actual building footprint against the building permit (PBG/IMB) to catch illegal additions.
We have made this infographic to give you a quick and clear snapshot of the property market in Indonesia. It highlights key facts like rental prices, yields, and property costs both in city centers and outside, so you can easily compare opportunities. We’ve done some research and also included useful insights about the country’s economy, like GDP, population, and interest rates, to help you understand the bigger picture.
What insider lessons do foreigners share after buying in Medan?
What do foreigners say they did wrong in Medan right now?
The most common mistake foreigners say they made when buying property in Medan is trusting the agent's or seller's verbal assurances instead of independently verifying ownership and encumbrances at the land office before paying any money.
The top three regrets foreigners mention after buying in Medan are accepting a nominee arrangement that later caused legal problems, paying deposits before completing proper due diligence, and underestimating how long official processes take which created stressful delays.
The single piece of advice experienced foreign buyers most often give to newcomers in Medan is to treat land office verification as non-negotiable, no matter how trustworthy the seller or agent seems, because the registry is the only proof that matters.
The mistake foreigners say cost them the most money or stress in Medan is entering a nominee arrangement, because when the relationship goes wrong, they discover they have no legal standing to recover their investment, and courts will not enforce private agreements that violate land ownership laws.
What do locals do differently when buying in Medan right now?
The key difference in how locals approach buying property in Medan compared to foreigners is that locals prioritize the certificate status and land office checks immediately, often before even visiting the property, because they understand that paper documents without BPN verification are meaningless.
The verification step locals routinely take that foreigners often skip in Medan is checking the property's tax payment history (PBB) at the local tax office, because unpaid taxes create problems at closing and locals know that sellers sometimes hide years of arrears that become the buyer's problem.
The local knowledge advantage that helps Medan residents get better deals is their network of family connections to notaries, land office staff, and neighborhood contacts who can informally verify a seller's reputation and alert them to problems before they commit, which foreigners cannot replicate without building trusted local relationships over time.
Don't buy the wrong property, in the wrong area of Medan
Buying real estate is a significant investment. Don't rely solely on your intuition. Gather the right information to make the best decision.
What sources have we used to write this blog article?
Whether it's in our blog articles or the market analyses included in our property pack about Medan, we always rely on the strongest methodology we can, and we don't throw out numbers at random.
We also aim to be fully transparent, so below we've listed the authoritative sources we used, and explained how we used them and the methods behind our estimates.
| Source | Why It's Authoritative | How We Used It |
|---|---|---|
| Indonesia Government PP No. 18/2021 | The national regulation that sets the rules for land rights and who can hold them. | We used it to define what foreigners can legally hold in Medan. We also used it to frame the protection you get when your paperwork and registration are clean. |
| Permen ATR/BPN No. 18/2021 | The implementing regulation that explains procedures and requirements in practice. | We used it to understand how Hak Pakai rights are processed in Medan. We used it to translate legal rights into practical steps at the land office. |
| Bank Indonesia SHPR Q3 2025 | Bank Indonesia is the central bank and this is its official housing market survey. | We used it to describe Indonesia's residential price trends going into 2026. We used the latest growth figures to provide a reality check on market conditions. |
| BPS North Sumatra GDP Q3 2025 | Official regional statistical release from BPS for North Sumatra. | We used it to anchor Medan's economic backdrop. We also used sector growth data to explain why property talk has increased recently. |
| City of Medan Perda No. 1/2024 | The city's official legal text for local taxes including BPHTB. | We used it to state the BPHTB rate and Medan's non-taxable threshold. We used it to highlight common issues around transaction value declarations. |
| World Justice Project Rule of Law Index 2025 | Globally cited rule of law benchmark built from household and expert surveys. | We used it to benchmark contract enforcement and civil justice climate in Indonesia. We used it to keep the jurisdiction discussion measurable. |
| World Bank Governance Indicators | Widely used governance series compiled from many underlying sources. | We used it to triangulate rule of law strength with a second framework. We used it to explain why paperwork discipline matters more than informal trust. |
| Transparency International CPI 2024 | The standard global corruption perception index used by governments and researchers. | We used it to contextualize corruption risk in permits and registrations. We used it to explain why cash requests appear and why caution is warranted. |
| BPN Kota Medan Official Site | The official local land office presence describing services and procedures. | We used it to ground verification steps in what Medan's land office actually offers. We used it to explain where ownership verification should happen. |
| CNBC Indonesia OJK/IASC Report | Major national business outlet reporting specific OJK scam figures. | We used it to quantify the broader scam environment going into 2026. We used it to set expectations that scams are common, not edge cases. |
| Ministry of Trade Permendag No. 51/2017 | The national regulation defining requirements for property brokerage companies. | We used it to show what a regulated agent should look like. We used it to build a checklist of what to demand from agents before trusting them. |
We created this infographic to give you a simple idea of how much it costs to buy property in different parts of Indonesia. As you can see, it breaks down price ranges and property types for popular cities in the country. We hope this makes it easier to explore your options and understand the market.
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