Purchasing Property in Lombok: A Guide for Foreign Buyers

Backed by major government infrastructure projects, such as the development of Special Economic Zones and the expansion of the international airport, as well as an increase in sustainable luxury developments, Lombok is rapidly positioning itself as an alternative to Bali for foreign investments. 

This guide explores the key considerations for buying property in Lombok, from the best areas for property investment to legal ownership structures, while also providing insights to help you navigate the purchasing process.

Choosing a suitable location for your Property Investment in Lombok 

One of the key factors driving investments in Lombok is that the region offers several popular locations in which to develop. Thus, the first step in planning your purchase involves determining the right location based on your specific investment plan. Below you’ll find an overview of the most popular areas in Lombok for purchasing properties:

Kuta: The Gateway to Lombok’s Luxury and Leisure Market

Located in South Lombok, Kuta is the island’s premier tourism hub. Known for its high-end resorts, thriving nightlife, and world-class surf spots, Kuta has become one of the most sought-after locations for investors, especially after hosting the 2024 MotoGP event. 

Much of the land in Kuta is also managed by PT ITDC (Indonesian Tourism Development Corporation), which typically reserves it for its private development. Thus, whether you’re considering a private villa, a boutique resort, or a commercial property, Kuta offers strong potential for short-term rentals and long-term capital appreciation, but you’ll have to act quickly.

Selong Belanak’s Pristine Coastal Retreats 

This area’s natural beauty and serene atmosphere make it a popular choice for those looking to invest in premium vacation rentals or second homes. One of the standout projects in Selong Belanak is Samara Hills, a luxury residential community offering fully serviced plots, allowing you to build custom-designed properties within a managed estate. 

The high demand for villa rental in Selong Belanak means that it currently stands to afford you the fastest return on your investment (ROI) in terms of land purchasing when compared to other similar locations.

Tampah’s secluded setting offers a unique blend of luxury rental and community

Tampah offers a more secluded and community-driven lifestyle, making it ideal for those seeking privacy without sacrificing modern comforts. Here, you’ll find some of Lombok’s most prestigious master-planned communities, each offering a distinct take on high-end, sustainable living.

Tampah Hills, one of the region’s foremost developers currently aims to build a fully integrated ultra-luxurious community designed by world-renowned architects, featuring eco-conscious villas with breathtaking ocean views. The current daily rate for this location starts at USD 1,500.

It’s worth noting that these developments prioritize sustainable luxury– from solar-powered villas to water conservation systems, making Tampah a compelling choice especially if you are looking for eco-conscious, long-term value in a low-density, exclusive setting.

Looking to purchase property in Lombok? Contact Emerhub to inquire about our available listings!

Understanding Ownership Regulations When Buying Property in Lombok

Indonesia’s property laws restrict foreign ownership of freehold land (Hak Milik), but there are legal pathways for you to invest in property in Lombok through your Foreign-Owned Company (PT PMA):

1. Right to Use (Hak Pakai)
2. Right to Build (Hak Guna Bangunan)

Emerhub’s property experts can assist with zoning assessments, obtain required permits l Building Approval Certificates (PBG), and structure your investment under a PT PMA for full legal protection.

A step-by-step guide for Buying Property in Lombok

1. Establish a PT PMA (Foreign-Owned Company)

As a foreigner, it is highly recommended to set up a PT PMA and acquire property under the Right to Build (HGB) title. This is essential if you plan to develop, rent, or sell the property. 

2. Enter into a Sales and Purchase Binding Agreement (PPJB) 

Once you’ve identified a property and are legally established in Indonesia, the next step is to sign a Sales and Purchase Binding Agreement (Perjanjian Pengikatan Jual Beli – PPJB). This legally binds both seller and buyer while due diligence is completed and serves as a preliminary contract before the final ownership transfer.

A standard PPJB agreement typically includes (but is not limited to):

• The agreed purchase price and payment structure (e.g. 10-20% deposit upon signing, with the remaining balance due after due diligence or upon completion of agreed contractual milestones).
• Seller’s guarantee of sole ownership, ensuring the property is free from disputes or outstanding claims.
  • If the land is to be subdivided, the seller must guarantee to complete the subdivision of the land before the finalization of the Purchase and Sale.
• Verification of infrastructure access, such as legal road access, water supply, and any required sub-division completion.

Since a PPJB is not an official land transfer, it is crucial to ensure the property passes all legal and financial checks before proceeding to the final sale deed (AJB). Emerhub’s property management experts can guide you throughout this process to help ensure compliance and better protect your investment.

3. Conduct thorough Property Due Diligence

Conducting thorough property due diligence ensures your property is legally sound and free of financial or zoning issues before purchase. Key steps in this process include:

• Certificate verification: Confirming the land title is legitimate, properly registered, and compliant with zoning laws. The certificate is issued by BPN or the land authority and consists of two pages:
  • Page 1 – Name of owner and purpose of use of land
  • Page 2 – Land border, form, and location on designated map

• Ownership verification: Ensuring the seller is the rightful owner, with complete spousal consent if married.
• Site inspection: Assessing access to roads, water, and land conditions to prevent development issues.
• Tax status review: Ensuring no outstanding levies or legal claims that could delay ownership transfer.

A comprehensive due diligence process protects your investment from legal disputes, financial risks, and the possibility of the land being rendered unusable. To avoid potential risks to your investment, we highly recommend partnering with Emerhub’s property experts. We’ll handle these critical verifications in your stead via our due diligence service.

To learn more, check out our detailed guide on property due diligence.

4. Sign the Sales and Purchase Deed (Akta Jual Beli- AJB) 

The Akta Jual Beli (AJB) is the final and legally binding contract that officially transfers property ownership. This must be executed by a notary after due diligence is completed and all contractual obligations have been met. At this stage:

• Full payment is completed according to the agreed terms.
• Both you and the seller settle the applicable tax fees:
  • PPh (income tax): borne by the seller
  • BPHTB (purchase and ownership tax): borne by the buyer
  • Notary fee (1%): borne by the buyer
  • The official fee of BPN (to change ownership): approximately USD 300

5. Certificate Change and Final Ownership Transfer

Once the Akta Jual Beli (AJB) is signed, the notary submits the ownership transfer request to the National Land Agency (BPN) to update the land certificate under your or your company’s name. This process includes:

• Submitting the AJB and supporting documents to BPN.
• Updating the land certificate under a Right to Build (HGB) or Right to Use (Hak Pakai) title.
• Final verification and issuance of the new certificate.

The timeframe for completion varies from a few weeks to several months, depending on various administrative factors. While the ownership transfer is handled by a notary, it’s still crucial to ensure that all legal requirements are met beforehand.

Whether you’re securing land for development or acquiring property as an investment asset, Emerhub’s local experts will help with land certificate verification and securing all necessary permits, ensuring your Lombok investment is legally protected and compliant with local regulations.

Ready to secure your next property investment in Lombok? Fill out the form below and we’ll connect you with one of our experts!