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Andi Refandi
Andi serves as a Senior Account Executive on Emerhub’s global team.
Can foreigners buy property in Indonesia? There are different levels of control and ownership depending on who you are and what you do with the property.
This article will give you all the necessary information about the regulations, processes, and considerations for buying property in Indonesia as a foreigner.
Understanding Foreign Property Ownership Regulations in Indonesia
Foreign ownership of property in Indonesia is governed by Government Regulation No. 103 of 2015. This regulation outlines the rights and limitations for non-Indonesians looking to invest in real estate in the country.
Part of this regulation is how foreigners are prohibited from indefinite ownership or Hak Milik “Right of Ownership”. According to the Basic Agrarian Law No. 5/1960, only Indonesian citizens and specific legal entities can acquire this title. Therefore, foreigners must explore alternative means of property ownership in Indonesia.
To legally acquire property as a non-Indonesians, you need to enter long-term lease agreements governed by several compliance laws and regulations.
Types of Leasehold Agreements for Foreigners
There are 4 types of lease agreements that allow foreigners to secure property in Indonesia:
| Types of Leasehold Agreement | Description | Requirements |
| Right to Use (Hak Pakai) | Allows foreigners and foreign owned companies to use land for a specified period (typically up to 30 years) and can be extended. | – Valid KITAS or KITAP- Application letter requesting the Hak Pakai title – Copy of valid passport- Marriage certificate (if applicable) – Copy of Indonesian spouse’s ID (if applicable) – Land certificates or related documents – Proof of payment for application fees – Property must be eligible for Hak Pakai. |
| Right to Rent (Hak Sewa) | Rental contract established between the renter and the landlord. The primary requirement for this title is either a KITAS (temporary stay permit), a representative office, or a registered company (PT or PT PMA). | – Lease agreement between the lessor and lessee – Valid identification for both parties – Duration typically around 25 years, with options to extend specified in the agreement. – Cannot be used as collateral or registered with the National Land Agency. |
| Right to Build (Hak Guna Bangunan) | Allows foreigners or legal entities to build structures on the land for a maximum of 30 years, with the possibility of extension. | – Must be held by Indonesian citizens or legal entities, including foreign companies (PT PMA) – Application to the National Land Agency – Valid business plan and investment proof if applicable – Initial period of up to 30 years, extendable for an additional 20 years, with potential for further renewal. |
| Right to Cultivate (Hak Guna Usaha) | Allows foreigners or legal entities to utilize state-owned land specifically for agricultural, fisheries, or livestock purposes. | – Must be held by Indonesian citizens or legal entities, including foreign companies (PT PMA) – Application to the National Land Agency – Must demonstrate productive use of land for agriculture, fisheries, etc. – Initial period of up to 35 years, renewable for another 20 years. |
The safest option to buy property in Indonesia is to register a foreign-owned company (PT PMA) first. A PT PMA is allowed to buy property (except land) with the Right To Use title. When you sell the property to a local investor, they can change the title to Right to Own.
For details on company registration, refer to our article on How to Register a company in Indonesia.
Minimum Value for Foreign Property Ownership
Foreigners buying properties in Indonesia must adhere to specific minimum value requirements that vary by region.
| Region | Minimum Property Value in IDR | Approximate Value in USD |
| Jakarta | 10 Billion | 673,000 |
| Bali, Banten, West Java, Central Java, East Java, Special Region of Yogyakarta | 5 Billion | 340,00 |
| West Nusa Tenggara | 3 Billion | 195,000 |
| North Sumatra, East Kalimantan, South Sulawesi, Riau Archipelago | 2 Billion | 130,000 |
| Other Regions or Provinces | 1 Billion | 65,000 |
Necessary Documents to Buy Property in Indonesia
- Buyer Identification Documents
- Valid Passport with a minimum validity of 36 months from the purchase date.
- Identity Card (Kartu Tanda Penduduk – Orang Asing – KTP-OA) – issued to foreigners holding a permanent stay permit (Kartu Izin Tinggal Tetap – KITAP).
- Marriage Certificate – If the property is to be jointly owned with an Indonesian spouse, this document may be necessary.
- Tax compliance
- Tax Identification Number (Nomor Pokok Wajib Pajak – NPWP) – required for both the buyer and seller for tax-related information.
- Tax Payment Certificate (Pajak Bumi dan Bangunan – PBB) – Proof that all property-related taxes have been paid up to date is required.
- Deed of Sale and Purchase (Akta Jual Beli) – legally binding document must be prepared by a notary to outline the terms of the sale.
- Land Ownership Certificate (Sertifikat Hak Milik) – verifies the seller’s legal ownership of the property.
- Building Permit (Izin Mendirikan Bangunan – IMB) –If applicable, this document confirms that the property complies with local building regulations.
- If buying property as a foreign-owned company (PT PMA), include:
- Deed of Establishment (Akta Pendirian Perusahaan)
- Amendment Deed (Akta Perubahan)
- Proof of Financial Capability – documentation such as bank statements or salary slips may be required to demonstrate your ability to fulfill financial commitments related to the purchase.
With expertise in the local real estate market in Indonesia, Emerhub can assist you in compiling all the essential paperwork to streamline the legal process. Emerhub’s team conducts thorough due diligence to verify property ownership and compliance with local regulations to help protect your investment.
How to Buy Property in Indonesia as a Foreigner
To buy land in Indonesia, foreigners need to decide whether to purchase through a leasehold agreement (Hak Pakai), or establish a foreign-owned company (PT PMA). Depending on the property value and your investment strategy, Emerhub’s consultants can guide you through Indonesia’s property laws and compliance.
1. Find a Suitable Property
Determine what type of property you are interested in (e.g., residential, commercial, or investment) and your budget. Consider factors like location, size, and amenities. With our network of professionals in Indonesia, we can help you identify options that meet your needs.
2. Check the property licenses
There are two documents you need to receive before you should even consider moving forward with the transaction:
- The Certificate of the Property
- The Building License/ IMB
If the seller is not providing those or is finding reasons to delay them, then it most probably means that something is not right.
3. Conduct due diligence
Once you have the certificates, it’s time to conduct due diligence. Take your time and don’t get pressured by the seller claiming that there is another buyer who will take this property unless you act now. Even if that was true, it’s better to lose a good deal than to rush into a bad one.
Some of the questions you should answer during the due diligence:
- Who is the owner?
- If the owner is a private individual, is this person married? If yes, do they have their spouse’s approval?
- Is the property inherited? If yes, are all of the beneficiaries willing to sell? How have they declared their permission to sell?
- What type of certificate the property has? Does it allow you to conduct your planned activities?
- Are the documents with the owner or at a bank?
- What are the local zoning laws?
- How much tax would you need to pay for the property?
Depending on the size and purpose of the transactions, you can go much more into details. You can order due diligence from Emerhub’s property lawyers.
4. Sales Purchase Agreement and downpayment
Sales purchase agreement (SPA) obligates a seller to sell, a buyer to buy and sets the terms. Sign it in front of a public notary authorized for the area (PPAT) when buying property in Indonesia.
Make sure the SPA protects your interests, and you understand all the terms.
Emerhub’s property lawyers will draft the SPA on your behalf and advise on which local notary to use.
After you sign the SPA you need to transfer the down payment. The market practice for down payment in Indonesia is 10%.
It is advisable to only send the money directly to the person listed in the certificate. If the seller insists on another recipient, then back off and cancel the transaction.
If the certificate is with the bank, then you first need to agree who will pay the remaining balance to the bank. Don’t transfer the rest of the fee before the notary (PPAT) receives the certificates and checks them.
5. Final Payment and Property Transfer
Once everything is in order and you are ready to close the deal, you will need to transfer the remaining amount to the seller. Final transfer and the signing of Deed Of Sell and Buy should be made simultaneously in front of the public notary.
Note that both parties need to pay taxes before the transfer of land title. The following sale and purchase transaction taxes apply:
- Buyer: Acquisition Tax aka BPHTB, which is 5% of the land value, paid in the Local Revenue Department (Dispenda)
- Seller: (PPh) 2.5% from land value, paid in the Regional Tax Department (KPP Pratama)
It is common for a seller to propose an “unofficial” price to lower the tax.
However, keep in mind that each property has a Tax Object Price (NJOP) which defines the amount of property taxes you need to pay on the property.
Your transaction price cannot be lower than that and should be seen by the local government as “realistic,” or otherwise, it can result in an audit.
Once you complete all the steps, the public notary will transfer the ownership to you.
Buy Property in Indonesia with Emerhub
Ready to buy land in Indonesia? Our expert consultants provide comprehensive support, from navigating local regulations and securing necessary permits to conducting thorough due diligence and giving you the best property options in the real estate market.
With our extensive knowledge of the Indonesian real estate market, we ensure that your investment is secure and compliant with all legal requirements.
Fill out the form below and explore the most effective options for buying property in Indonesia with the help of our experts!
FAQs About Buying Property in Indonesia as a Foreigner
Can foreigners buy property in Indonesia?
In Indonesia, foreigner cannot own land outright but can purchase property in Indonesia through leasehold agreements such as Right to Use or by establishing a foreign-owned company (PT PMA).
What types of properties can foreigners buy in Indonesia?
Foreigners can buy the following types of properties in Indonesia:
- Apartments or condominiums with strata title
- Houses built on land with Right to Use (Hak Pakai) title
- Villas or houses on leasehold land
However, foreigners cannot directly own freehold land in Indonesia. They are limited to leasehold arrangements or ownership through a foreign investment company (PT PMA).
Are there restrictions on property size and location?
Yes, there are limits on the size of land that foreigners can own, generally capped at 2,000 square meters for landed houses. Additionally, certain areas may have restrictions on foreign ownership, particularly in popular tourist destinations like Bali.
Can I sell my property in Indonesia later on?
Yes, foreigners can sell their properties; however, they must comply with local laws and regulations regarding foreign ownership and transfer processes.
