Buying Property In Indonesia

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Indonesia’s land ownership laws have long restricted foreign nationals from owning property outright, and that remains the fundamental position today. Under Indonesian Agrarian Law (Law No. 5 of 1960), land ownership — known as Hak Milik — is reserved exclusively for Indonesian citizens. However, the legal framework has evolved considerably over the decades, and foreign nationals now have several legitimate pathways to hold, use, and lease property in Indonesia, provided they understand the distinctions between different title types and comply with current regulations.

From the late 1990s onwards, a series of laws and regulations progressively expanded the options available to foreign nationals. Government Regulation No. 41 of 1996 permitted foreigners residing in or regularly visiting Indonesia to purchase apartments and office space in buildings carrying a strata title, enabling ownership of the unit itself while the land beneath remained outside foreign ownership.

Further regulations in 2010 and 2015 sought to clarify the framework for long-term leases, and Government Regulation No. 18 of 2021 (PP No. 18 Tahun 2021) introduced the most significant reforms in recent years, consolidating rules around land rights, apartment units, and title registration.

Under current regulations, foreign nationals may hold apartments through lease agreements of up to 30 years, extendable by a further 20 years. Landed houses may be accessed through long-term leases but cannot be owned outright. It is important to note that these leasehold titles do not carry the same legal protections as freehold titles held by Indonesian citizens, which has historically made them difficult to finance through Indonesian bank mortgages.

Indonesian Agrarian Law, Law No. 5 of 1960, governs the ownership of land in Indonesia. Within it is a category of land ownership called Hak Pakai, meaning the right to build on or use the land. Under this law, foreign nationals may only hold land or residential property under the Hak Pakai (Right to Use) title — a usage right rather than a true ownership right.

Current Regulatory Framework — Key References

Regulation	Subject	Key Point
Law No. 5 of 1960	Basic Agrarian Law	Hak Milik reserved for Indonesian citizens only
PP No. 41 of 1996	Foreign residential ownership	Foreigners may hold apartments/condos under Hak Pakai
Ministerial Reg. No. 13 of 2016	Minimum property values for foreign buyers	Value thresholds by region — verify current figures
PP No. 18 of 2021	Land rights consolidation	Most recent major reform — clarifies Hak Pakai, strata titles, registration
August 2023 announcement	Eased rules for high-income foreigners	New income and property value thresholds introduced

Minimum property value thresholds for foreign buyers (Ministerial Reg. No. 13/2016):

Region	Minimum Value
Bali and Yogyakarta	Rp 3 billion
Jakarta	Rp 10 billion
West Java	Rp 5 billion

2023 Update: Relaxed Rules for High-Income Foreign Buyers

In August 2023, the Indonesian government announced measures intended to make it easier for high-earning foreign nationals to purchase property in Indonesia, particularly in priority investment areas. The changes were framed as part of a broader effort to attract foreign capital and talent.

The specific income thresholds and eligible property categories introduced under the 2023 changes are subject to implementing regulations that continue to be refined. A qualified Indonesian notary or property lawyer will be able to advise on current requirements for your specific situation.

Paperwork for Real Estate Transactions in Indonesia

Real estate transactions in Indonesia are relatively straightforward in outline, but they involve several distinct areas of law in a single deal — property law, taxation law, inheritance law, and family law among them. The most common transaction is a sale and purchase, and the process described below applies to all standard real estate dealings.

The Basic Agrarian Law stipulates that a sale and purchase transaction is the legal evidence proving the transfer of title from seller to buyer. The law requires that real estate transactions meet two criteria: they must be transparent, and they must be paid in full. The transaction must be carried out in front of and under the supervision of an authorised officer — a licensed land deed official known as a Pejabat Pembuat Akta Tanah (PPAT). Crucially, the transaction cannot be executed if any shortfall in payment exists.

Property Title Background Check

This step is non-negotiable. No transaction should proceed without a formal background check of the legality of the previous title and ownership documents. To conduct this, you will need the original certificate of ownership. The legal status of the property cannot be verified without the original document.

The background check will reveal any outstanding mortgage on the property. If one exists, the owner must remove it from the title before any further transaction proceeds. It will also show whether the property is under any potential dispute. We strongly advise against proceeding with any transaction before this background check is complete.

Seller’s Information

You will need copies of the following documents from the seller:

Family card (Kartu Keluarga / KK), showing all family members of the seller.
Marriage certificate, if applicable. If the spouse has passed away, provide the death certificate. If the seller is divorced, provide the divorce verdict confirming division of property.
Original certificate of land ownership.
PBB land and building tax payment record (SPPT PBB). This document identifies the tax applicable to the transaction and confirms that current taxes have been paid.
Seller’s taxpayer number (NPWP).

NOTE: Since 2022, Indonesia has been progressively rolling out a land registry digitalisation programme. In some areas, title certificates are now issued in digital form (sertifikat elektronik). Ask your notary or PPAT whether the property has a digital or physical certificate, as the verification process may differ.

Buyer’s Information

As the buyer, you will need the following documents:

Copy of KTP. If you are married, your spouse’s KTP will also be required unless you have a valid prenuptial or postnuptial agreement. If you are a mixed-nationality couple, you will almost certainly need this agreement in place to proceed.
Family card (KK), which contains your Nomor Induk Kependudukan (NIK — Residency Registration Number) used to validate your tax information.
Marriage certificate, confirming whether the property will be treated as separate or joint property under Indonesian law.
Taxpayer number (NPWP), required to validate the tax applicable to the transaction.

NOTE: Foreign buyers should ensure their stay permit (KITAS or KITAP) is current and valid, as proof of legal residency is required for property transactions under Hak Pakai. The type and duration of your stay permit may also affect which title types you are eligible to hold.

Sale and Purchase Agreement

Your intention to proceed with the transaction must be formalised in a Sale and Purchase Agreement (SPA). Both the seller and the buyer must be present in person to sign the SPA, along with their spouses if married. A valid marital agreement — such as a prenuptial or postnuptial agreement — must also be presented if you have a separation of property clause in your marriage; this allows you to sign without your spouse present.

A valid SPA must be lodged at the land registry office to transfer title from seller to buyer. Tax payments for the current year must be settled before the title transfer is conducted; a tax validation will be carried out as part of the process.

Ownership of the Property

When purchasing land or a house in Indonesia, you must deal directly with the legal owner of the property. The owner must be able to present a certificate of title — issued by the Indonesian government through the Kementerian Agraria dan Tata Ruang / Badan Pertanahan Nasional (Ministry of Agrarian Affairs and Spatial Planning / National Land Registry, commonly abbreviated ATR/BPN). The BPN has offices in every major city in Indonesia.

NOTE: The BPN has undergone restructuring and is now formally part of the Ministry of Agrarian Affairs and Spatial Planning (ATR/BPN). Its functions remain the same, but official documents and correspondence now carry the updated ministry name.

The certificate of title is the definitive proof of ownership. The legal owner of immovable property (land, houses, apartments) is the person whose name appears on the title certificate. If the owner has passed away, ownership passes to next of kin — typically the surviving spouse and children. If the owner is deceased, confirm you are dealing with the correct legal heir before proceeding.

Article 19 of the Basic Agrarian Law provides that the government of Indonesia conducts land registration to confer legal protection upon the person whose name is printed on the certificate. That person is automatically included in the national land registry database and is subject to all prevailing laws and regulations.

Transfer of Title

A title transfer must be performed when you purchase real estate in Indonesia. Following execution of the sale and purchase agreement and remittance of payment to the seller, your name must be registered as the current owner of the property. The transfer is processed through the local land registry office where the property is located. You will be legally recognised as the owner once this proceeding is complete.

Mortgagor Protection

If you are funding a property purchase in full and wish to include your Indonesian spouse as the property title holder, you may need mortgage protection. Under Indonesian law, the legal owner of the asset is whoever’s name appears on the title certificate. If your name is not on the certificate and you have signed a prenuptial agreement, the property legally belongs to your spouse — free from any claim by you.

Mortgagor protection addresses this risk. Your name as the mortgagor is printed on the title certificate alongside the Indonesian spouse’s name as property holder. This protects your financial contribution: the title holder cannot sell the property without first reimbursing your full contribution, after which any capital gain is divided as agreed. This arrangement is particularly relevant for mixed-nationality couples.

Purchasing an Apartment or Office under Strata Title

Government Regulation No. 41 of 1996 established that foreigners residing in Indonesia, or visiting regularly for business purposes, may purchase an apartment or condominium provided the development holds the appropriate strata title status. This regulation has since been supplemented by PP No. 18 of 2021, which further clarified the rules around foreign ownership of apartment units (satuan rumah susun).

Foreigners can hold property under Hak Pakai (right to use) title. However, it is not possible to hold a Hak Pakai deed over a sub-unit of a building that carries a Hak Guna Bangunan (right to build) deed — the underlying land title matters significantly. Therein lies one of the primary complexities and ownership ambiguities that foreign buyers encounter.

The maximum duration of a foreign national’s Hak Pakai over an apartment unit is 70 years in total, subject to periodic renewal. Foreign buyers must actively apply to renew their right to use within the relevant period; it does not renew automatically.

Convertible Lease Agreement

One arrangement sometimes proposed to foreign buyers is a Convertible Lease Agreement with the apartment property management office. Under this structure, the foreign buyer pays for the apartment but the title is held in the name of the developer, property management firm, or an Indonesian nominee. The lease agreement runs for a fixed period.

The agreement typically states that if and when prevailing laws permit the lessee to become the legal owner, both lessor and lessee shall be obligated to sign a Deed of Sale and Purchase and the title shall be transferred to the foreign owner.

However, lawyers consulted on this arrangement have been emphatic: this is a very bad idea, and no reputable lawyer should advise a foreign buyer to sign a Convertible Lease Agreement. As a foreign national, you are entitled to Hak Pakai and should insist that the apartment building or developer provides Hak Pakai status in your name. With a Convertible Lease Agreement, you are entirely at the mercy of the appointed party; if they change their mind, you have very limited legal recourse, as the agreement between you and the Indonesian party is not a fully enforceable legal document.

Insist that the Hak Pakai is in your name. If the developer cannot provide a Hak Pakai document in your name, it may be because they do not hold Hak Guna Bangunan title over the land. If this is the case, do not proceed with the purchase.

If you are considering purchasing through a Convertible Lease Agreement regardless, investigate the property management company thoroughly. Many developers have experienced serious financial pressures and construction on some properties has been delayed or cancelled. Have any contract reviewed by a reputable Indonesian property lawyer before signing.

Using an Indonesian Nominee to Hold Your Title

Another approach sometimes suggested to foreign buyers is to pay for the property but place the title in the name of an Indonesian citizen — someone you trust implicitly, since under Indonesian law that person would be the legal owner regardless of any verbal or written agreement between you.

Most lawyers advise strongly against this arrangement. You have no legally enforceable document confirming that the property is yours. You are placing yourself in an extremely vulnerable position. There are many documented cases of foreign buyers losing substantial investments by relying on a nominated Indonesian title holder.

It is also important to understand that using a nominee to shelter foreign property ownership is not merely inadvisable — it is illegal under Indonesian law. If the arrangement is discovered, the government has the authority to seize the land, with ownership reverting to the state. Neither the foreign buyer nor the nominee would be entitled to compensation.

Single Family Dwellings — Houses

Ownership of single family dwellings presents even greater legal complexity than apartments, as foreigners are not permitted to own land in Indonesia. Where the home you wish to purchase is part of a developer-managed housing estate, developers can sometimes structure a long-term lease arrangement that gives the foreign buyer substantial rights over the property.

The following account was shared by a reader some years ago and reflects one expat’s experience purchasing a house within a developer-managed estate. Individual circumstances, developer terms, and applicable regulations will vary. We have retained this account as a useful illustration of how such arrangements can work in practice, but readers should seek current legal advice rather than relying on the specific terms described here.

“Basically, I hold full title to the house, in my own name. The fact that my wife is Indonesian was not considered at all. She also owns property, and we could see no difference in the title and rights of mine. The developer owns the land the house is built on, and I own a 30-year fully paid up lease on the land, which by law the developer has to extend for a further 30 years on request. At that time they can charge me a nominal rent, which I can opt to pay for now at approximately US $35 per year. I can sell or bequeath (but not sub-lease) the lease together with ownership of the house as I choose. The developer can sell the land, but only under the same covenants as already exist. These provisions apply to Indonesians as well, although Indonesians could purchase the land outright if the developer agreed to sell. I purchased the house without finance; I am not sure what effect there would be on title if you took a loan or mortgage to assist with the purchase. Getting a mortgage would likely be the hardest part for a foreigner, and the finance company would retain powers to repossess in the event of default.”

Purchase of Land by a Foreign Company

If a foreign company is recognised by the Indonesian government as a legal entity, foreign investors can acquire either of two types of land title. Hak Guna Bangunan (Right to Build) is valid for 30 years and can be extended for a further 20 years. Hak Guna Usaha (Right to Cultivate) is valid for 35 years and can be extended for 20 years.

Buying Land

Under Indonesian agrarian law, a foreigner cannot legally own land in Indonesia. As a Jakarta Expat article once noted, the 1960 Agrarian Law holds that Indonesia’s land is a gift from God to the Indonesian people, a national treasure to be controlled by the state for the maximum prosperity of the people. If anyone tells you that you can own land outright as a foreigner in Indonesia — buyer beware.

If a foreigner nonetheless wishes to hold land indirectly, one method involves an agreement between the foreigner and an Indonesian citizen, signed before a notary public, in which the Indonesian is the legal owner while acknowledging that the foreigner is the beneficial owner. The Indonesian owner agrees to act on the foreigner’s instructions regarding the land, including any future sale, with proceeds paid to the foreigner.

We do not advise entering into this type of arrangement. Such agreements are not enforceable under Indonesian law, the foreigner has no legal title to the investment, and the Indonesian ‘owner’ can change their mind at any time without meaningful legal consequence.

All land titles within Greater Jakarta (DKI) are subject to the conditions of Presidential or Governor’s decrees, which affects the provisions for Hak Milik titles in the DKI Jakarta area.

NOTE: Indonesia is in the process of relocating its national capital to Nusantara in East Kalimantan. While this does not directly alter private land title law in Jakarta, the shift in administrative focus may have implications for property values and regulatory priorities in the DKI Jakarta area over the medium term. Expats considering property investment in Jakarta should monitor developments in this area.

Special Provisions for Batam

Batam is part of Indonesia’s Batam-Bintan-Karimun (BBK) Special Economic Zone, and property ownership rules for foreign nationals in the area have historically been more permissive than the national framework. The original decree governing foreign ownership in Batam permitted foreign nationals and companies to own residential or commercial property in the Barelang area (Batam, Rempang, and Galang), with the exception of subsidised housing.

NOTE: The regulatory framework governing property ownership in Batam and other Indonesian Special Economic Zones continues to develop. Readers considering property purchase in Batam should seek specific legal advice, as SEZ regulations may differ from the general national framework described in this article.

Even within special economic zones such as Batam and those in Kalimantan, the overarching Indonesian national land law (Hukum National) applies. The same fundamental principles govern property ownership regardless of location.

Hak Guna Bangunan vs Hak Milik — Understanding Indonesian Land Titles

Hak Guna Bangunan confers the right to use a building for a certain period of time, after which it must be extended. The underlying land is owned by the Indonesian state. It is sometimes translated as Conditional Corporate Ownership.

Only Hak Milik represents true ownership of land or a building. Hak Milik does not need to be extended and is the highest-value form of title — but it is available to Indonesian citizens only.

Hak Pakai allows use of a property without conferring ownership. It is sometimes translated as Conditional Ownership.

The table below summarises the main title types and their key characteristics:

Title	Indonesian Term	Who Can Hold It	Duration	Notes
Freehold ownership	Hak Milik	Indonesian citizens only	Permanent	Highest value; not available to foreigners
Right to Build	Hak Guna Bangunan (HGB)	Indonesian citizens and companies; foreign companies via PMA	30 years + 20 year extension	Land owned by state; building owned by title holder
Right to Use	Hak Pakai	Indonesian citizens, foreigners with legal residency, foreign companies	Up to 70 years total (subject to renewal)	Main title available to foreign individuals
Right to Cultivate	Hak Guna Usaha	Indonesian companies and foreign companies via PMA	35 years + 20 year extension	Agricultural/plantation land only
Strata title (apartment)	Hak Milik Satuan Rumah Susun	Indonesian citizens; foreigners under Hak Pakai	Matches underlying land title	Foreign ownership only where building holds HGB or Hak Pakai over the land

Obtaining a Loan from an Indonesian Bank to Purchase Property

Indonesian banks will not lend money to property owners holding only Hak Pakai title. The land title must be Hak Milik for the bank to accept it as collateral. This has historically meant that foreign nationals — who cannot hold Hak Milik — have been unable to secure Indonesian bank mortgages for property purchases. This restriction applies regardless of the buyer’s nationality.

Historically, loan terms for property in Indonesia were significantly shorter than in Western markets — often five to ten years rather than the 20 to 30 year mortgages common elsewhere. Some Indonesian banks have in recent years introduced mortgage products specifically targeting foreign nationals with KITAS or KITAP residency permits, typically requiring larger down payments and offering shorter terms. This is an evolving area and readers should approach Indonesian banks or reputable mortgage brokers directly for current product availability.

Reporting of Property Purchases to the Financial Intelligence Agency

Indonesian property developers are required to report residential property purchases above a certain value threshold to the Pusat Pelaporan dan Analisis Transaksi Keuangan (PPATK), Indonesia’s financial intelligence and anti-money laundering agency. This requirement applies to all buyers, including foreign nationals, and is intended to deter the use of high-value property transactions for money laundering.

The reporting threshold has been subject to revision since the regulation was first introduced. A local notary or property lawyer will be able to confirm the current applicable figure at the time of your transaction.

Purchase of Property by an Expat and Indonesian Couple

The crucial preparation for a mixed-nationality couple purchasing property in Indonesia is whether or not the Indonesian spouse and the foreign spouse have a prenuptial agreement for separation of property. If such an agreement is in place, the couple can legally proceed with a property purchase. Critically, this agreement must be signed before the marriage takes place.

Under Indonesian law, property is jointly owned after marriage unless there is a prenuptial agreement. This creates a legal problem: property owned by the Indonesian spouse becomes jointly owned with the foreign spouse upon marriage, which is illegal under the Agrarian Law. The property must therefore be sold within one year of marriage to a foreigner, or converted from Hak Milik (right of ownership) to Hak Pakai (right of use), which reduces the property’s market value (Article 26, paragraph 2).

Indonesian Agrarian Law — Foundational Legal Provisions

The following excerpts are taken from the original Indonesian Agrarian Law (Undang-Undang No. 5 Tahun 1960). While subsequent regulations have added detail and nuance, these foundational provisions remain in force and govern the basic framework of land ownership in Indonesia.

Pasal 21 (Article 21)

(1) Hanya warga-negara Indonesia dapat mempunyai hak milik.

(Only Indonesian citizens can have a hak milik — freehold land title.)

(2) Oleh Pemerintah ditetapkan badan-badan hukum yang dapat mempunyai hak milik dan syarat-syaratnya.

(The Government is to determine which corporate bodies can have a hak milik and the conditions for it.)

(3) Orang asing yang sesudah berlakunya Undang-undang ini memperoleh hak milik karena pewarisan tanpa wasiat atau percampuran harta karena perkawinan… wajib melepaskan hak itu didalam jangka waktu satu tahun…

(A foreigner who acquires a hak milik by way of inheritance without a will or by way of joint ownership resulting from marriage is obliged to relinquish this right within one year. If the right is not relinquished, it is nullified by law and the land falls to the State.)

(4) Selama seseorang disamping kewarga-negaraan Indonesianya mempunyai kewarga-negaraan asing maka ia tidak dapat mempunyai tanah dengan hak milik…

(A person holding dual Indonesian and foreign citizenship cannot hold land under hak milik; the provisions of paragraph 3 apply.)

Pasal 26 (Article 26)

(2) Setiap jual-beli, penukaran, penghibahan, pemberian dengan wasiat dan perbuatan-perbuatan lain yang dimaksudkan untuk langsung atau tidak langsung memindahkan hak milik kepada orang asing… adalah batal karena hukum dan tanahnya jatuh kepada Negara…

(Any sale, exchange, gift, bequest, or other act intended to transfer hak milik directly or indirectly to a foreigner is null and void by law, and the land falls to the State. All payments received by the owner cannot be reclaimed.)

Article 44 — Right of Lease to Build

A person or legal entity has the right to rent land for building purposes by paying the owner an agreed amount of rent. The rental payment may be made in a single payment or at agreed intervals, before or after the land is used. The lease agreement may not contain conditions that amount to extortion.

Article 45 — Eligible Lease Holders

Those who can become leaseholders in Indonesia are: Indonesian citizens; foreigners domiciled in Indonesia; legal entities established according to Indonesian law and domiciled in Indonesia; and foreign legal entities with a representative in Indonesia.

Lost Civil Registry Documents

If you lose important Civil Registry documents, the Catatan Sipil (Civil Registry) office in your area can assist you in obtaining replacements. The following documents are typically required:

Written statement of loss from the person concerned
Certificate of loss (Surat Keterangan Kehilangan) from the local police
Photocopy of the lost deed
Original damaged deed (if applicable)
Photocopy of KK and KTP
Court Decision regarding Change of Name or gender (if applicable)
Immigration documents (foreign nationals only)

Frequently Asked Questions: Buying Property in Indonesia as a Foreigner

Can foreigners buy property in Indonesia?

Foreign nationals cannot own land outright in Indonesia. However, they can hold property under Hak Pakai (Right to Use) title, purchase apartments in strata-title buildings, and enter into long-term lease agreements. The rules differ depending on property type, location, and the buyer’s residency status.

What is Hak Pakai and how long does it last?

Hak Pakai is a Right to Use title that allows a foreign national to occupy and use land or a property for a defined period. The total duration is up to 70 years, subject to periodic renewal applications. It does not confer the same protections or resale value as Hak Milik (freehold), which is available to Indonesian citizens only.

Can I buy a villa or house in Bali as a foreigner?

Foreigners cannot own a freestanding house or villa in Bali outright. The most common legal arrangements are long-term leasehold agreements (typically 25 to 30 years with extension options) or purchasing through an Indonesian-owned company structure (PT PMA). The nominee arrangement — placing the title in an Indonesian citizen’s name — is illegal and carries serious financial and legal risks. Always engage a qualified Indonesian notary and property lawyer.

What is the minimum property value a foreigner can buy in Indonesia?

Minimum value thresholds apply to foreign property purchases and vary by region. Under Ministerial Regulation No. 13 of 2016, the thresholds were set at Rp 3 billion in Bali and Yogyakarta, Rp 10 billion in Jakarta, and Rp 5 billion in West Java, among others. These figures may have been revised since 2016 — verify current thresholds with a local notary before proceeding.

Can foreigners get a mortgage in Indonesia?

Indonesian banks have historically been unwilling to extend mortgage finance to foreign nationals holding only Hak Pakai titles, as the title cannot be used as collateral in the same way as Hak Milik. Some banks now offer limited mortgage products to KITAS and KITAP holders. Inquire directly with Indonesian banks or a local mortgage broker for current availability.

Is it safe to buy property through an Indonesian nominee?

No. Using a nominee arrangement is not only legally unenforceable but is explicitly illegal under Indonesian law. If discovered, the government can seize the land with no compensation to either party. This approach is strongly and consistently discouraged by Indonesian property lawyers.

Do I need a lawyer to buy property in Indonesia?

While not legally mandatory, engaging a qualified Indonesian property lawyer and a licensed land deed official (Pejabat Pembuat Akta Tanah, or PPAT) is strongly recommended. Real estate transactions in Indonesia involve complex intersections of property law, tax law, and family law, and errors can be extremely costly to correct.

Flow chart: rights of married couples (foreigners/Indonesians) to own land in Indonesia [INTERNAL LINK — verify still active]
Foreign Ownership Rights Relating to Land in Indonesia [INTERNAL LINK — verify still active]
Living in Indonesia Expat Forum — property ownership discussion thread [FLAG: verify link is still active and thread is accessible]

Our appreciation to Asep Wijaya, Managing Director of Wijaya & Company, who provided the foundational information on real estate transaction paperwork for this article.

A Note on the Information in This Article

The information in this article reflects Indonesian property law and regulations as understood at the time of publication (June 2025) and represents our best knowledge of the most current laws and regulations at that date. Indonesian land law is a complex and evolving area, and regulations — including title durations, value thresholds, and eligibility criteria — can change. Always consult a qualified Indonesian property lawyer and licensed land deed official (PPAT) before entering into any land or property agreement in Indonesia. This article is intended as general guidance only and does not constitute legal advice.