Can Foreigners Buy a House in Indonesia? 2026 Legal Guide

Looking to buy a house in Indonesia? Indonesia is an attractive destination for foreigners seeking to invest in property. Its stunning landscapes and vibrant culture make it a prime choice for real estate investment.

However, navigating property ownership for foreigners in Indonesia can be complex due to regulations like Hak Pakai (Right to Use) and other aspects of Indonesian property law. Let’s explore the costs, challenges, and benefits of buying property in Indonesia.

Property Ownership Options for Foreigners at A Glance

Option	Who can hold it	Term	Best for
Hak Pakai (Right to Use) on a landed house	Foreign individual with immigration documents	30 + 20 + 30 years	Own residence
Apartment unit (Hak Milik atas Satuan Rumah Susun)	Foreign individual with immigration documents	Follows the land title of the building	Own residence in cities
HGB (Right to Build) through a PT PMA	Foreign-owned company	30 + 20 + 30 years	Business premises, development, licensed rentals
Leasehold (Hak Sewa)	Any foreigner	Contractual, often 25–30 years with extensions	Holiday homes and villas without title
Hak Milik (freehold)	Indonesian citizens only	Indefinite	Not available to foreigners

Can Foreigners Buy a House in Indonesia?

Can foreigners buy property in Indonesia? The legal basis

Foreign property ownership is governed by three layers of regulation:

• Basic Agrarian Law (UU 5/1960): Reserves Hak Milik for Indonesian citizens and allows foreigners residing in Indonesia to hold Hak Pakai. Article 26(2) makes any transfer of Hak Milik to a foreigner, directly or indirectly, void.
• Government Regulation No. 18 of 2021: Part of the Job Creation Law reforms, it replaced PP 103/2015 and lets foreigners with immigration documents, meaning a passport, visa or stay permit, own a residential house or apartment unit.
• Minister of ATR/BPN Regulation No. 18 of 2021 and Kepmen ATR/BPN No. 1241/SK-HK.02/IX/2022: Set the technical rules, including the luxury-house requirement, the one-plot and 2,000 m² limit, and minimum prices by province.

The National Land Agency, ATR/BPN, registers all land titles and converts titles when a foreigner buys.

Is Buying Property in Indonesia a Good Investment?

Investing in real estate in Indonesia offers numerous advantages. From enticing investment potential to flexible leasehold options, here’s a concise breakdown:

• Lucrative Investment Potential: Indonesia’s thriving economy presents opportunities for property value appreciation.
• Tourism and Retirement Appeal: Ideal for retirement or vacation homes, offering diverse attractions and landscapes.
• Leasehold Flexibility: Long-term lease options provide secure land use without full ownership complexities.
• Convenient Condominium Ownership: Straightforward ownership under the “Hak Pakai” title for clear legal frameworks.
• Business Expansion Opportunities: Establishing a local entity facilitates property ownership for business expansion.
• Participation in Economic Growth: Contribute to and benefit from Indonesia’s economic growth through real estate.
• Rental Income Potential: Rent a property, especially in popular tourist destinations.

How Much Does It Cost to Buy a House in Indonesia?

Taxes and costs when buying property in Indonesia

Cost	Who pays	Rate	Legal basis
Land and building acquisition duty (BPHTB)	Buyer	Up to 5% of the transaction value, after a regional tax-free allowance	UU 1/2022 (HKPD) and regional regulations
Final income tax on transfer (PPh final)	Seller	2.5% of the gross transfer value	PP 34/2016
VAT on new property from a developer	Buyer	12%, charged on 11/12 of the price (effective 11%)	UU HPP; PMK 131/2024
VAT incentive (PPN DTP)	Government	100% of VAT on the first IDR 2 billion for homes priced up to IDR 5 billion, for handovers in 2026	PMK 90/2025
PPh 22 on very luxury homes	Buyer (collected by seller)	1% for houses or apartments priced above IDR 30 billion or above set floor areas	PMK 51/2025
PPAT and notary fees	Usually buyer	Up to 1% of the transaction value	PP 24/2016
Annual land and building tax (PBB-P2)	Owner	Up to 0.5% of the assessed value, set by each region	UU 1/2022 (HKPD)

PPN DTP applies to one home per person and only to ready-to-occupy new homes handed over during the incentive period. The government has signalled an extension to 2027, but buyers should confirm the regulation in force at handover. Our guide to property tax in Indonesia explains these taxes in more detail, and our tax consulting team can calculate the exact cost of your purchase.

What are The Challenges of Buying A House in Indonesia As A Foreigner?

Buying property as a foreigner in Indonesia has its complexities:

• Regulatory Restrictions: Foreign ownership is limited to certain property types under specific conditions, as outlined by Indonesian property law.
• Price Minimums: Foreigners must adhere to price thresholds (e.g., IDR 10 billion for Jakarta houses), which can be prohibitive.
• The Right to Use Dilemma: Developers and banks often hesitate to work with Hak Pakai (Right to Use) properties, favoring alternatives like Hak Guna Bangunan (Right to Build).
• Immigration Requirements: A valid residence permit is necessary for property purchases.

Understanding these challenges can help potential investors navigate the real estate landscape more effectively.

Common Knowledge to Buy a House in Indonesia As A Foreigner

The government needs to fix at least five things to loosen the faucet of foreign ownership restrictions in Indonesia, which will stimulate the domestic property sector. Therefore, these five things become common knowledge for foreigners to familiarize themselves with.

1. The Right of Use Property

Banks are often reluctant to accept properties with the status of Right to Use as collateral for loans. This has created a wave effect in which people are not focusing on any Right to Use properties, and developers still need to focus on developing such properties.

2. Credit Facilities

Regulations allowing foreigners to get credit facilities to buy a house in Indonesia still need to be made. Since the government’s price limit is still high, the foreigners being targeted are in the upper segment.

3. Complex Process for Foreigners to Get a Residence Permit

The process for foreigners to obtain a residence permit in Indonesia is still quite complex and needs to be simplified. This includes both temporary and permanent residence permits. The government regulation only opens up opportunities for foreigners with a license to buy a house, whose existence within the country provides benefits such as business.

4. No Homeownership Opportunities

Developers still hope the government will open homeownership Indonesia opportunities for foreigners not domiciled in Indonesia to expand the market. Even so, developers hope to increase foreign markets after opening the ASEAN Economic Community era.

5. The Right to Use Dilemma

The Right to Use dilemma in the domestic property market must be fixed. The foreign market is still relatively new, so developers are hesitant to build properties with the Right to Use, especially for apartments. This is because the local market prefers properties with the Right to Build status over the Right to Use.

READ MORE:

• 10 Strategic Locations for Buying Property in Bali
• How Can Foreigners Buy Apartments in Indonesia?
• Tips for Selecting A Reliable Property Agent in Bali

Requirements and Minimum Prices for Foreign Buyers

Who qualifies

Under PP 18/2021, a foreigner needs valid immigration documents to own a residential property. In practice, a passport and visa are enough to buy, and many owners then apply for a longer stay permit. Common options include:

• Investor KITAS for shareholders of a PT PMA.
• KITAP for long-term residents eligible for permanent stay.
• Golden Visa for individuals and corporate investors meeting the investment thresholds, offering 5- or 10-year stay.
• Second Home visa for foreigners with sufficient funds who want to live in Indonesia long term.

Property conditions

• Luxury category: Landed houses must fall within the luxury-house category; apartments must be in commercial projects, not subsidised housing.
• One plot, up to 2,000 m²: Generally one plot of land per person or family, with a maximum area of 2,000 m². The Minister of ATR/BPN can approve more where the purchase brings economic or social benefit.
• New or existing homes: Foreigners can buy both new and resale property.

Minimum purchase prices (Kepmen ATR/BPN 1241/2022)

Location	Landed house (minimum)	Apartment unit (minimum)
DKI Jakarta	IDR 5 billion	IDR 3 billion
Bali	IDR 5 billion	IDR 2 billion
Banten, West Java, Central Java, DI Yogyakarta, East Java	IDR 5 billion	IDR 2 billion
Other provinces	IDR 1 billion to IDR 3 billion, depending on the province	IDR 1 billion
Indonesian diaspora (former citizens)	75% of the provincial threshold	75% of the provincial threshold

Some provinces outside Java and Bali, such as West Nusa Tenggara, North Sumatra, East Kalimantan, South Sulawesi and the Riau Islands, are reported to have intermediate thresholds, so check the decree’s annex for the exact figure before you commit. An explainer of the thresholds is available from Hukumonline.

Inheritance and leaving Indonesia

If a foreign owner dies, heirs can inherit the property if they also hold valid immigration documents. If an owner or heir does not meet the requirements, the property must be sold or transferred to an eligible party within the period set by regulation, generally one year, or the right lapses. Plan your estate and will accordingly.

Types of Property that Foreigners Can Own in Indonesia

Hak Pakai (Right to Use)

Hak Pakai is the main title for foreign individuals. When a foreigner buys a landed house that currently sits on Hak Milik or HGB land, the land office converts the title to Hak Pakai as part of the transfer. For residential use, Hak Pakai is granted for 30 years, can be extended for 20 years, and renewed for a further 30 years, for a total of up to 80 years.

The house must fall within the luxury-house category, and the purchase must meet the minimum price for the province.

Apartments (strata title)

Foreigners can own an apartment unit under Hak Milik atas Satuan Rumah Susun (HMSRS). Since PP 18/2021, this is possible in buildings on both Hak Pakai and HGB land, which opened most new commercial apartment projects to foreign buyers. Read more in our guide on how to buy an apartment in Jakarta.

HGB through a PT PMA

A foreign-owned company can hold Hak Guna Bangunan (HGB), the Right to Build, for 30 years, extendable by 20 years and renewable for 30 years. This route suits investors who want to develop, operate or rent out property as a business. The company must have genuine business activity under the right KBLI codes and meet the investment rules under BKPM Regulation 5/2025, including minimum paid-up capital of IDR 2.5 billion and an investment plan above IDR 10 billion per business line and location, excluding land and buildings. To use this route, you first need to set up a PT PMA.

Leasehold (Hak Sewa)

A lease is a contract rather than a land title. It is common for Bali villas and is open to any foreigner without residency requirements, but the lessee’s protection depends on the lease agreement and the lessor’s title. A notarised lease registered against a clean certificate is essential. See our tips on buying property in Bali.

6 Ways to Obtain Property As Foreigners in Indonesia

Foreign nationals (WNA) have several options for acquiring real estate in Indonesia. Here they are:

• Invest through a PT PMA: Foreigners can invest by setting up a foreign-owned company that meets BKPM requirements.
• Purchase Leasehold Property: Buy property with extended usage rights, avoiding full ownership.
• Acquire Property under Hak Pakai (the right to use) Title: Own property through a legal right for residential use.
• Obtain Property under Hak Guna Bangunan Title: Get the right to build and use land for a specified period.
• Make a Purchase Using a Passport: Some properties allow direct purchase using a passport.
• Buy through an Indonesian Nominee: Utilize a local nominee for simplified ownership.

These options offer foreign nationals diverse ways to engage in Indonesia’s real estate market.

How Do Foreigners Purchase a Property in Indonesia?

Purchasing or leasing property in Indonesia can be intricate for foreigners unfamiliar with local rules. Simplify the process with these steps:

1. Choose the ownership structure. Decide between Hak Pakai in your own name, an apartment unit, HGB through a PT PMA, or a lease, based on how you will use the property.
2. Confirm your immigration status. Make sure your passport and visa or stay permit are valid, as the land office will record them.
3. Shortlist properties that qualify. Check that the price meets the provincial minimum, the plot is within 2,000 m², and the house falls within the luxury category.
4. Carry out legal due diligence. Verify the land certificate at the local land office, check zoning in the regional spatial plan, confirm the building approval (PBG) and certificate of fitness (SLF), and check for unpaid land and building tax (PBB), mortgages or disputes.
5. Sign a conditional sale and purchase agreement (PPJB). For new projects or where conditions remain, sign a PPJB before a notary and pay the agreed deposit.
6. Sign the deed of sale (AJB) before a land deed official (PPAT). The PPAT prepares the AJB once taxes are paid and the title is clean. For apartments in new projects, this follows the developer’s handover.
7. Pay the transaction taxes. The buyer pays BPHTB, and the seller pays final income tax before the AJB is signed.
8. Register and convert the title. The PPAT submits the deed to ATR/BPN, which registers the transfer and, for landed houses, converts the title to Hak Pakai in the foreign buyer’s name.

How Does Property Tax Work for Foreigners in Indonesia?

Since its economic reform, Indonesia has become a sought-after destination for many foreign business owners and investors who want to purchase property. Foreigners can benefit from one of the lowest property taxes in Southeast Asia.

The land and building tax, a state tax that is the most fundamental property tax in the country, is levied at 0.5% and serves as a regional income for local and central governments for their facilities.

Both parties must pay certain taxes when transferring land and building rights in Indonesia. The sellers pay an income tax on the sale of land or property, and the buyers pay an acquisition tax. The seller tax is as follows:

• 1% for simple flats or simple houses for their transfer of land or building rights
• 2.5% for regular buildings except for simple houses or simple apartments for their transfer of land or building rights
• 0% for government buildings and government’s special-assignment buildings for their transfer of land or building rights

The transaction value determines the buyer’s tax, which is 5%. However, specific individuals, like diplomatic consulates or representatives of NGO agencies, can avoid these taxes.

Other taxes related to the property are lease taxes applicable to tax and non-tax residents and construction tax, which applies when the building is built.

Taxation in Indonesia can be complicated and tricky. InCorp can assist with a tax consultation to avoid administrative risk.

Leasing Property as an Alternative to Buy A House in Indonesia

There are six main items we have pointed out to check before renting a property. They are:

Quotation and Payment

Renters must pay rent in Indonesian Rupiah. Some quotations still have US Dollars as their main nominals. However, foreigners must plan before losing out on currency exchanges.

Duration of Lease

The usual lease term is 20-30 years, depending on the agreement. Ensure the lease can be extended if necessary and agree on payment terms beforehand.

Leasing Contract

Find out what items are covered in the leasing contract. The renter usually covers maintenance costs, air conditioning cleaning, water pump repair, and other utilities. 

Discuss an agreement where more significant expenses need to be paid by the rentee. An agreement on whether monthly fees like electricity, water, internet, and phone bills are included in the payments should be made.

READ MORE:

• A Guide to Property Tax in Indonesia
• The Ultimate Handbook for Managing a Rental Property in Bali
• The Growing Potential of Property Investment in Surabaya

Security Deposit

A security deposit is standard and is usually priced at one month’s rent after signing the lease. Ensure the security deposit is 100% refundable and that no fine print is included in the agreement.

Renewal Right

The renter should make the option to renew the lease available and prioritized. During renewal, the price will usually increase. Ensure that you know the current land pricing to avoid getting duped.

Sublet Right

Some homeowners allow tenants to sublet the area to other renters. Renters or foreigners must discuss this with the landlord before signing the agreement.

Risks to Avoid hen Buying Property in Indonesia

Nominee arrangements

Some buyers still put Hak Milik land in the name of an Indonesian “nominee”, backed by side agreements such as loan, power-of-attorney or option deeds. These structures are not a safe route. Article 26(2) of the Basic Agrarian Law states that any act that directly or indirectly transfers Hak Milik to a foreigner is void, and the land falls to the state. Indonesian courts have repeatedly refused to enforce nominee side agreements, leaving foreign buyers with no title and no remedy if the nominee sells, mortgages or dies.

Marriage to an Indonesian citizen

An Indonesian who marries a foreigner without a prenuptial agreement shares marital property with the foreign spouse, which means they cannot hold Hak Milik or HGB on land acquired during the marriage. Under Article 21(3) of the Basic Agrarian Law, land acquired this way must be released within one year. A marriage agreement separating property, which since Constitutional Court Decision 69/PUU-XIII/2015 can also be made during the marriage, allows the Indonesian spouse to keep full ownership rights. The foreign spouse does not gain ownership through this route.

Weak leasehold contracts

Leases are only as secure as the lessor’s title and the contract. Risks include leasing from someone who is not the registered owner, land zoned for agriculture or green belt, no notarised deed, and no clear extension or exit clauses.

Using a PT PMA only to hold a private home

A PT PMA must carry out genuine business under its licensed KBLI codes, submit LKPM reports and file taxes. Using a company only to hold a personal villa creates compliance costs and can expose the company to licence revocation.

Renting the property out

Renting out property, especially as short-term tourist accommodation in Bali, is a business activity that requires the right business licence and tax registration. Authorities in Bali have stepped up enforcement against unlicensed villa rentals. Read our handbook for managing a rental property in Bali before you plan rental income.

Obtain Your Dream Property with InCorp Indonesia

In conclusion, owning property in Indonesia as a foreigner can be complex, involving various regulations and requirements. To streamline this journey and minimize the associated hassle, consider enlisting the land and property ownership service of InCorp Indonesia (an Ascentium Company). 

Our experts possess the knowledge required to navigate these regulations, and we offer a comprehensive company registration service. We facilitate a seamless process to help you achieve your dream of owning property in Indonesia.

Frequently Asked Questions