Indonesia has long been a dream destination for expatriates, digital nomads, and global investors. With Bali, Jakarta, and Lombok becoming hotspots for real estate, one question is asked over and over: Can foreigners buy property in Indonesia in 2025?
Yes, they can, but not freehold ownership. Indonesian land laws are strict, and foreigners must follow specific legal frameworks to buy or control property. This guide explains everything you need to know, including rights, options, risks, and steps to purchase safely.
Why Foreigners Cannot Own Freehold Property in Indonesia
Under Indonesia’s Agrarian Law No. 5 of 1960, Hak Milik (freehold ownership) is reserved only for Indonesian citizens and certain domestic legal entities.
For foreigners, buying land under Hak Milik is prohibited. If a foreigner inherits Hak Milik land, they must sell it within one year. This restriction is designed to protect land ownership for Indonesian citizens.
Legal Alternatives for Foreign Ownership
Despite these restrictions, foreigners still have several legal options:
Right to Use (Hak Pakai)
- Definition: Grants foreigners the right to use land for residential purposes.
- Duration: Up to 30 years, extendable to 50 years, and renewable up to 80 years total.
- Requirements: Usually tied to a valid stay permit (KITAS/KITAP).
Best For: Individuals seeking a home in Indonesia without setting up a company.
Right to Build (Hak Guna Bangunan / HGB) via PT PMA
- Foreign investors can set up a PT PMA (foreign-owned company) to acquire HGB titles.
- Duration: 30 years, extendable to 50, and renewable.
- Use Case: Ideal for investment properties, villas for rent, or commercial projects.
Capital Requirement: Typically IDR 10 billion (~USD 700,000) in paid-up capital.
Strata Title for Apartments
- Available only in designated developments approved for foreign buyers.
- Allows foreigners to own apartment units (not land).
- Usually structured under Hak Pakai.
Duration & Renewal of Property Rights
- Hak Pakai: 30 years + 20 years + 30 years (up to ~80 years).
- HGB via PT PMA: 30 years + 20 years + renewable further.
- Strata Title: Depends on project regulations but generally follows Hak Pakai rules.
Understanding these durations is crucial for long-term investment planning.
Minimum Investment & Legal Requirements
The Indonesian government enforces minimum property values for foreigners. For example:
- Jakarta: USD 195,000 – USD 650,000 depending on location.
- Bali: Minimum thresholds vary by district.
For PT PMA setup:
- Paid-up capital requirement of IDR 10 billion (~USD 700,000).
- Company must comply with annual reporting and tax obligations.
Risks and Common Scams to Avoid
Unfortunately, many foreigners have been caught in scams due to lack of due diligence.
- Fake Lease Agreements: Unscrupulous sellers “sell” Hak Milik land illegally to foreigners.
- Nominee Arrangements: Using an Indonesian nominee is risky — contracts are often unenforceable.
High-Profile Case: In 2024, an Australian influencer lost USD 6.2 million in a fake land deal in Bali, leading to visa revocation.
Tips to Avoid Scams:
- Always work with a licensed notary (PPAT) and property lawyer.
- Verify land certificates and ownership status.
- Avoid informal “arrangements” outside the legal system.
- Ensure contracts include clear extension and renewal clauses.
- Choose reputable agencies like ORA Properties for secure transactions.
Step-by-Step Guide to Buying Property in Indonesia
- Define your purpose: Residential, investment, or commercial.
- Choose ownership model: Hak Pakai, HGB (via PT PMA), or Strata Title.
- Check minimum property value requirements.
- Consult a property lawyer & notary (PPAT).
- For investment: Establish a PT PMA.
- Negotiate & sign the Sales and Purchase Agreement (Akta Jual Beli).
- Register and obtain the property certificate.
- Plan ahead for renewals and extensions.
Is Property Investment in Indonesia Right for You?
While foreigners cannot own freehold land in Indonesia, there are secure and legal options:
- Hak Pakai for individuals,
- PT PMA with HGB for investors, and
- Strata Title for apartments.
The key is to follow the law, work with trusted professionals, and choose properties wisely. With proper guidance, investing in Indonesia’s real estate can be both rewarding and safe.
Ready to explore your options? Contact ORA Properties for expert advice and curated listings in Bali and beyond.
