Land Rights Guide for Buying Land in Indonesia: What Every Investor Needs to Know

When buying land in Indonesia, many investors—especially foreigners—remain unaware of the implications of Indonesia’s Basic Agrarian Law (UUPA), which has governed land ownership and usage for over 65 years. Despite its age, this law remains highly relevant. New regulations, Permen ATR/BPN No. 5 of 2025, also introduce more flexible land rights access for foreign investors under specific safeguards.

Whether you’re a foreign business owner, real estate developer, or local entrepreneur, understanding these land rights is essential for long-term success when buying land in Indonesia.

Types of Land Rights and Titles in Indonesia

When buying land in Indonesia, it’s crucial to understand the different categories of land rights available. These determine what you can legally do with the land and who can hold each title type.

Right of Ownership (Hak Milik)

• Known as a Freehold Title, this is the strongest land right under the law, giving perpetual ownership.
• Available only to Indonesian citizens or government-approved entities.

• Not accessible to foreigners or PT PMAs when buying land in Indonesia.

Right to Cultivate (Hak Guna Usaha – HGU)

• Allows land use for agricultural, plantation, livestock, or fishery purposes.Granted for 35 years, extendable by 25 years, with a renewal possibility of another 35 years.

• Eligible for Indonesian individuals and foreign-owned companies (PT PMAs) interested in buying land in Indonesia for commercial use.

Right to Build (Hak Guna Bangunan – HGB)

• Authorizes the construction of buildings on land not personally owned.
• Valid for 30 years, extendable for 20 years, and renewable.

• It can be held by Indonesian citizens or legal entities, including PT PMAs, aiming to buy land in Indonesia for development.

Right to Use (Hak Pakai)

• Grants use State land or land owned by others for a specific purpose.
• Available to foreigners, local citizens, PT PMAs, and representative offices.

• Validity is usually 25–30 years, with potential extension, and it is commonly used by foreigners buying land in Indonesia.

Leasehold Right (Hak Sewa)

• A right to lease land for an agreed period through a contract.
• Most commonly used by foreigners and foreign companies buying land in Indonesia through long-term leasing.

• The duration depends on the agreement, which is often 25–30 years.

Right of Land Clearing & Right to Collect Forest Products

• Allows entities to clear land (Hak Membuka Tanah) or collect natural resources (Hak Memungut Hasil Hutan).
• Regulated strictly due to environmental laws.

• Mainly applicable to agriculture and natural resource firms buying land in Indonesia for exploitation purposes.

Can Foreigners Own Land in Indonesia in 2025?

Foreign ownership of land in Indonesia remains a nuanced subject. While the law prohibits full ownership under Hak Milik, recent legal developments have created structured pathways for foreigners buying land in Indonesia under different titles.

Foreigners still cannot own land under Hak Milik, but the 2025 regulation (Permen ATR/BPN No. 5/2025) opens clearer legal avenues:

• PT PMAs can obtain HGB or HGU for long-term development when buying land in Indonesia.
• Individuals can lease land through Hak Sewa or apply for Hak Pakai.

• Foreign ownership must still align with zoning and investment laws.

Consultation with local legal experts is strongly advised to avoid structuring errors or violating land ownership restrictions when leasing land in Indonesia.

New 2025 Legal Updates You Should Know

Staying informed on the latest legal changes is critical when buying land in Indonesia. The government has introduced significant updates that affect land ownership, registration, and usage.

Old Land Titles Expire Soon

Per GR 18/2021 and ATR/BPN Regulation 16/2021, unregistered or legacy certificates (like Girik) will become invalid after February 2, 2026. Property owners must convert them to official SHM (Sertifikat Hak Milik) to retain legal ownership when buying land in Indonesia.

Unused Land May Be Reclaimed

Starting mid-2025, the government has authority to reclaim land that is idle for over 2 consecutive years. Over 1.4 million hectares are already being reviewed under this rule. This makes active land use crucial for those buying land in Indonesia.

Ongoing Agrarian Reform

Indonesia’s commitment to the One Map Policy and PTSL program enhances land registration, reduces disputes, and promotes equity in land ownership—crucial for investors buying land in Indonesia.

Guide to Doing Business in Jakarta

Mailchimp Free eBook Indonesia Business Insight

Subscribe

Full Name

Email

I have read InCorp's Privacy Policy and agree to InCorp using my information provided to contact me about related content, and services.*

Subscribe

Why You Should Consult Before Buying or Leasing Land

Making the right decision when buying land in Indonesia involves choosing the right location and navigating the complex legal framework. Working with experts ensures compliance and prevents costly mistakes.

Legal advisors like InCorp Indonesia (an Ascentium Company) can assist you with our comprehensive land and property ownership services, such as:

• Analyze your land rights eligibility
• Register PT PMA or nominee structures legally
• Handle OSS/BKPM licensing

• Ensure compliance and due diligence with zoning, taxes, and sustainability

With an evolving legal landscape, updated strategies are key to safe, innovative, and compliant land acquisition. Don’t risk your investment with outdated information. Fill out the form below and start your journey toward successful property investment in Indonesia.

Frequently Asked Questions