Buying property in Indonesia as a foreigner

A foreign individual can own a home in Indonesia, but only in two forms: a house on a registered right to use (Hak Pakai) or a unit in a commercial apartment building. Freehold stays closed. The rules come from Government Regulation 18 of 2021, a land ministry regulation of the same year and a 2022 decree on minimum prices.

The ownership is real. It’s registered at the land office, and it can be sold, mortgaged and inherited. It’s narrower than what an Indonesian citizen holds, and most of the trouble foreign buyers get into starts with trying to get around that.

What a foreigner can hold

For a house, the land right has to be Hak Pakai. It can sit on state land, on someone else’s freehold (Hak Milik) through a deed made by a land deed official (PPAT), or on land under a right of management (Hak Pengelolaan, HPL) through an agreement with the HPL holder. If the house you buy sits on freehold or on a right to build (Hak Guna Bangunan, HGB), the right is converted to Hak Pakai as part of the purchase. Land rights in Indonesia explains each title.

A Hak Pakai on state land or HPL runs for up to 30 years, can be extended by up to 20 years and then renewed for up to 30 more. A Hak Pakai on someone’s freehold runs for up to 30 years and is renewed only by a new deed with the owner, so its future depends on that owner. When the terms run out, the land goes back to the state or the HPL holder. A former holder who kept to the terms can be given priority for a new grant.

For an apartment, a foreigner can hold strata title (hak milik atas satuan rumah susun) in a building on Hak Pakai or HGB land. The regulation places these buildings in special economic zones, free trade zones, industrial estates and “other economic zones”, which it defines to include urban and tourism areas. The foreign owner’s share of the land under the building isn’t counted.

Who qualifies and the limits

The test is an immigration document. Article 69 of the regulation and its elucidation define it as a visa, a passport or a stay permit. Ask the PPAT early which document the land office will want to see.

The land ministry’s regulation adds limits for a landed house: one plot per person or family, no more than 2,000 square metres of land and a house in the luxury category. The minister can allow more where the purchase has a positive economic and social impact. An apartment must be in a commercial building. In both cases the property is for living in.

A decree of 12 September 2022 (number 1241/SK-HK.02/IX/2022) sets a minimum purchase price for foreigners in each province. These are legal floors, not market values. In East Kalimantan the floor is IDR 2 billion for a landed house and IDR 1 billion for an apartment. West, Central, South and North Kalimantan aren’t named, so the general floor of IDR 1 billion applies to both. The ministry can change these figures by decree, so have the PPAT confirm the one in force before you agree a price.

Married to an Indonesian

An Indonesian married to a foreigner can hold the same rights as any other citizen, freehold included, but only if the land isn’t joint marital property. Article 70 of the regulation asks for proof through a notarised agreement that separates the spouses’ property. Since the Constitutional Court’s decision 69/PUU-XIII/2015 of 27 October 2016, that agreement can be made during the marriage, not only before it.

Without one, freehold bought during the marriage becomes joint property. The Basic Agrarian Law (Law 5 of 1960) gives a foreigner who acquires freehold through marital property one year to give it up. After that the right ends and the land falls to the state.

Selling, inheriting and leaving

You can sell a Hak Pakai house or an apartment to anyone eligible to hold it. An Indonesian buyer takes over the Hak Pakai and can then apply to upgrade a residential Hak Pakai to freehold, which the regulation allows for citizens. A Hak Pakai with a fixed term can also be mortgaged to a bank.

When a foreign owner dies, the home passes to the heirs. A foreign heir needs an immigration document, like any foreign buyer. Under Article 50, a Hak Pakai holder who no longer qualifies has one year to sell or transfer the right, or it ends by law. Plan the exit before you buy, especially if your stay in Indonesia depends on one job or one project.

What you can’t do

A sale of freehold to a foreigner is void under Article 26 of the Basic Agrarian Law. The land falls to the state, and the money paid to the seller can’t be claimed back. Buying in an Indonesian friend’s name doesn’t fix this, because the law also catches indirect transfers. Nominee arrangements explains how buyers lose property that way.

If you want a warehouse, an office, a plot to develop or more than one home, the individual route doesn’t fit. A foreign-owned company (PT PMA) can hold HGB for its business, and setting up a PT PMA covers that path.

Before you sign

• Have the PPAT confirm that the seller’s title can become Hak Pakai and that the price meets the floor for the province.
• Check the certificate at the land office before any money moves, as set out in how to check a land certificate.
• For Hak Pakai on someone’s freehold, read the deed for the term, the renewal terms and what the owner has promised.
• Get every tax and fee in writing, with who pays it.
• Decide who will inherit, and whether that person will qualify to hold the property.