Can Foreigners Buy Property in Indonesia: Hak Pakai, PT PMA, and Leases

Yes, foreigners can buy property in Indonesia, but not on the same terms as Indonesian citizens. Freehold ownership (Hak Milik) is reserved for nationals under the Basic Agrarian Law of 1960.¹ What the law does allow is a set of long-term rights: a personal “right to use” (Hak Pakai) valid for up to 80 years, corporate ownership through a foreign-investment company holding a “right to build” (Hak Guna Bangunan), strata title over an apartment unit, or a leasehold negotiated directly with an Indonesian landowner. Which route fits depends on whether you want a home, a business asset, or a passive investment.

The Freehold Boundary and Why Nominees Fail

Any arrangement that directly or indirectly puts freehold title into foreign hands is void under Article 26(2) of the Basic Agrarian Law.¹ That includes the classic nominee structure, where an Indonesian citizen holds title on paper while the foreigner supplies the money and controls the property through side contracts. The agreement has no legal force from the start; no court order is needed to strike it down.

Enforcement has hardened. In February 2026, Bali’s governor signed Provincial Regulation No. 4/2026, adding criminal exposure to what was already a civil nullity. The regulation references up to five years’ imprisonment and an IDR 1 billion fine for both parties and any intermediaries, plus administrative consequences including business closure, license revocation, and demolition of structures built under the arrangement.

Even setting criminal risk aside, the structure fails on its own logic. The Indonesian nominee is the legal owner, and that reality drives every outcome that matters:

If the nominee dies, the property passes to their heirs under Indonesian inheritance law, and the foreigner has no enforceable claim.
If the nominee divorces, their spouse can claim half as joint marital property.
If the nominee goes bankrupt, creditors can seize the property to satisfy personal debts.
Any power of attorney the foreigner holds is revocable by the nominee at any time, whatever the contract says.

Loan agreements, options to purchase, and irrevocable powers of attorney all collapse under judicial scrutiny because Indonesian courts look through form to substance. A “loan” that is really a disguised land purchase gets treated as exactly that.

Hak Pakai: The Main Route for Individual Buyers

Hak Pakai is the standard title for a foreigner who wants to own a house or apartment in their own name. Government Regulation No. 103 of 2015 opened this right to foreign individuals for residential property.² Government Regulation No. 18 of 2021 confirmed the durations: 30 years initially, extendable by 20 years, then renewable for another 30, for a maximum of 80 years.³ Each extension and renewal is a separate application to the National Land Agency (BPN) and is not automatic; the government verifies continued use for the intended purpose.

To qualify you need a valid passport and an active Indonesian residence permit — a Limited Stay Permit (KITAS) or a Permanent Stay Permit (KITAP). Tourists cannot buy under Hak Pakai. Indonesia also sets minimum property values for foreign purchasers that vary by province and property type; in Jakarta and Bali, apartment minimums start around IDR 2 to 3 billion (roughly $130,000 to $195,000), with different thresholds for houses. Confirm current figures with the notary or the local BPN before committing.

The Second Home Visa

If you don’t have a KITAS or KITAP through work or family, the Second Home Visa is the alternative route to Hak Pakai eligibility. It grants a stay permit for up to five or ten years and is aimed at investors and retirees. The financial bar is a deposit of at least IDR 2 billion (roughly $130,000) in an Indonesian state bank, or ownership of Hak Pakai real estate worth at least that amount. Proof is due within 90 days of the permit being issued, and missing that deadline cancels the permit.

The visa doesn’t authorize employment in Indonesia, though remote work for foreign companies is permitted. After three years, holders become eligible to apply for a KITAP, renewable every five years. While the Second Home Visa is active, you cannot withdraw the qualifying bank deposit or sell the qualifying property.

Buying Through a PT PMA for Commercial or Investment Property

For commercial buildings, larger developments, or investment-focused acquisitions, the standard structure is a PT PMA — a limited liability company incorporated in Indonesia with foreign capital. A PT PMA can hold Hak Guna Bangunan (Right to Build), which allows the company to construct and own buildings under the same 30+20+30-year framework, up to 80 years total.⁴³

BKPM Regulation No. 5 of 2025 reduced the minimum paid-up capital from IDR 10 billion to IDR 2.5 billion (roughly $160,000), which has widened access. The company must still commit to total investment above IDR 10 billion (roughly $650,000) over the life of the project. If any investor wants an Investor KITAS tied to the company, that individual still needs to hold at least IDR 10 billion in shares personally.

Setting up a PT PMA involves registering with the Investment Coordinating Board (BKPM), obtaining business licenses, and complying with Indonesia’s positive investment list, which caps foreign ownership in certain sectors. The process runs from several weeks to a few months and calls for professional legal help.

Apartment Strata Title

Foreigners can own individual apartment units under a strata title certificate (SHMSRS). You own the unit itself and share the common areas and underlying land with other unit holders. This form of ownership is available in designated areas including Special Economic Zones, Free Trade Zones, and Industrial Zones, and successive regulations have expanded the zones where it is permitted.⁵

The residency requirement is the same as for Hak Pakai: a KITAS, KITAP, or Second Home Visa. Minimum purchase prices are set by province, with apartment thresholds starting around IDR 2 billion in Bali and Java and higher in Jakarta.

Leasehold (Hak Sewa)

A leasehold is the simplest option and the only one that doesn’t require a residence permit. You negotiate a lease directly with the Indonesian landowner, usually for 25 to 30 years, with negotiated extensions. During the term you can build, renovate, and rent the property out.

The trade-off is weaker protection. A leasehold is contractual, not a registered title, so your position depends on the quality of the contract and the cooperation of the landowner. If the landowner dies, goes bankrupt, or sells the freehold, unwinding the situation is harder than with a registered Hak Pakai. Serious buyers have a notary draft the lease as a notarial deed and, where possible, request BPN registration to create a public record.

Taxes and Transaction Costs

Budget for these on top of the purchase price:

BPHTB (buyer’s acquisition duty): 5% of the transaction value minus a non-taxable threshold (NPOPTKP), which varies by region and starts at IDR 60 million. Paid by the buyer before the deed is signed.
PPh (seller’s income tax): 2.5% of gross transaction value, a final income tax the seller must pay before the notary signs the deed.
PBB (annual property tax): capped at 0.5% of the government-assessed market value, often applied at a lower rate depending on region.
Luxury tax (PPnBM): an additional 20% on the primary sale of apartments, townhouses, or villas priced at IDR 30 billion (roughly $2 million) or above.
PPAT (notary) fees: generally capped at 1% of the transaction value, though actual fees vary.

Leasehold transactions follow a different tax profile. The lessor pays income tax of 10% on the declared lease value if they have an Indonesian tax number (NPWP). A foreigner selling a leasehold without an NPWP faces a 20% rate, which is a strong reason to sort out your tax number before transacting.

If You Inherit Property in Indonesia

A foreigner who inherits Hak Milik cannot keep it. Article 21(3) of the Basic Agrarian Law requires the foreign heir to transfer or dispose of the freehold within one year of acquiring it, or the title reverts to the state.¹ In practice, that means selling to an Indonesian citizen or converting to Hak Pakai if you have a qualifying residence permit. Hak Pakai is more forgiving and can be inherited or transferred with government approval, but the foreign heir still has to meet the standard eligibility rules, including valid immigration documents.

Due Diligence Before You Buy

Indonesia’s land registration system is not fully digitized, title disputes are common, and customary land rights (hak adat) can complicate an ownership chain in ways that don’t show on a certificate. Before releasing money, verify at minimum:

Certificate authenticity, checked directly against BPN records.
The chain of ownership, to confirm the seller has the right to sell.
Tax payment history, since unpaid PBB can create liens.
Zoning and permits, to confirm the land’s designated use matches your plans. Building on agricultural-zoned land creates serious exposure.
Pending disputes or encumbrances in court records.
Physical boundaries, confirmed by survey and with neighboring owners. Boundary disputes are among the most common property conflicts in Indonesia.

Once due diligence is complete, the transaction goes to a PPAT — a land deed official authorized to execute the sale and purchase deed (Akta Jual Beli, or AJB).⁶ The PPAT confirms taxes are paid, both parties are eligible, and the property is free of encumbrances, then submits the signed AJB to the BPN for registration. Registration typically takes a few weeks, though BPN delays are common.

Hiring your own independent lawyer, separate from the seller’s notary or agent, is the highest-value decision in this process. The cost is small next to the transaction, and their job is to catch the problems everyone else in the deal has a reason to overlook.

1
Jaringan Dokumentasi dan Informasi Hukum Nasional. Indonesia Law Number 5 of 1960 – Basic Agrarian Principles
2
Global Trade Alert. Indonesia: Relaxed House Owning Restrictions for Foreigners
3
Expat.or.id. Government Regulation No. 18 of 2021
4
Investment Coordinating Board (BKPM). Law Number 25 of 2007 on Investment
5
UNCTAD Investment Policy Hub. Indonesia: New Regulation Expands Strata Title Rights for Foreign Citizens and Legal Entities
6
Ikatan Notaris Indonesia. Tanda Tangan AJB