How to Buy Land in Indonesia: A Complete Guide

Posted on

Do you plan to buy property in Indonesia?
Click here to get in touch with an experienced agent

Indonesia is the biggest country in Southeast Asia and as wide as the distance from Paris to Kabul. In the coming years, Indonesia will see a great transformation as people urbanize and get higher disposable incomes.

The country will drive the eCommerce boom in Southeast Asia in the coming decade and investing in commercial real estate and land here has become increasingly interesting to foreign investors.

At the moment, foreign ownership regulations aren’t favorable and some of the toughest in the region. But, this is something that the government is clearly aware of, a reason why we will hopefully see changes to the regulations in the near future.

For example, according to the government, foreigners would be able to own real estate under the same conditions as locals, something I believe is unlikely.

With that said, they have indicated that foreigners will be able to buy real estate with “right to build” titles, which has been described as a “game-changer” among local agents.

Investing in land in Indonesia is still difficult and something that requires due diligence and great scrutiny. Therefore, I have written this article where I explain how you can buy land in Indonesia as a foreigner.

Topics covered:

  • Can foreigners buy land in Indonesia?
  • Buying Land Through a PT PMA Company
  • The Importance of Zoning
  • Land Prices in Indonesia
  • Taxes
  • FAQ

Can foreigners buy land in Indonesia?

As explained in my separate article that explains how foreigners can buy real estate in Indonesia, the country has some of the most stringent foreign ownership regulations in Asia.

It does not come as a surprise that foreign land ownership is out-ruled.

With that said, you have a few options to control land if you work with a local partner or set up a local company.

The options you have are:

  • Buy land with the help of a local Indonesian nominee
  • Set up a local PT PMA company
  • (Leasing the property instead of buying)

Buying land with the help of a local nominee is popular as Indonesian citizens can only get hold of freehold titles, referred to as Hak Milik.

Foreigners and local companies, on the other hand, can only get hold of right-to-use (Hak Pakai) and right-to-build (Hak Guna Bangunan) titles.

With that said, it’s not recommended to buy real estate with the help of local nominees due to the risks involved.

There are plenty of stories about foreigners that lost their properties as the nominees became indebted to other locals or the contracts weren’t recognized by the authorities.

The most secure way to own real estate in Indonesia is to acquire real estate through a local PT PMA company instead.

Buying Land Through a PT PMA Company

Opening a PT PMA can be time-consuming compared to buying real estate with the help of a nominee, but it’s worth the extra effort. Seek help from a local partner that can support with due diligence, to draft the contracts, and secure the deal.

In short, investments made through the PT PMA will be treated as foreign direct investments and allow you to have either a right-to-build (Hak Guna Bangunan) title or a right-to-use (Hak Pakai) title.

To set up a PT PMA, you have to meet the following requirements:

  • Submit a business plan
  • Secure a minimum capital of RP 2,5 billion (around USD 176,000 USD). It should be deposited into a local bank account
  • You also have to add value to the Indonesian economy in terms of employment, skills, and environmental issues
  • The property investment must be presented as an asset of your company

The Importance of Zoning

You are not allowed to build property on agricultural land or green belts, which might abruptly put a halt to your operations in Indonesia. Therefore, it’s highly important to check what zone your property is located in.

The zones available in Indonesia include:

  • Industrial
  • Protected area
  • Horticulture
  • Heritage/sacred
  • Bay
  • Governmental
  • Residential
  • Tourism
  • Green
  • Conservation
  • Forestry
  • Trade and service

One issue that foreigners might come across can be that they have no issues buying real estate that belong to the zones of residential or tourism under a company.

However, you won’t be able to operate a business on that property as you won’t be able to get a business license in residential areas.

Confirm the ownership of the property

It’s important to confirm that the seller is the true owner of the land and that there are no liens or encumbrances to the property, such as outstanding tax payments or debts.

At the same time, confirming the land size to avoid overlapping boundaries is equally important to avoid any future disputes.

These are just examples of items to check beforehand. By now, I guess you understand the importance of working with a reliable partner and solicitor.

Land Prices in Indonesia

It’s always hard to check or predict land prices as there’s limited information available. Besides, land prices tend to increase steadily over time, a reason why information is sometimes not accurate online.

The best way of getting a better overview of the current land prices is therefore to check listings available in different areas. Below I have listed a handful of land listings up for sale at the moment.

Bali, Badung, Canggu

  • Size: 250 sq.m.
  • Price: RP 650 million (around USD 45,855)
  • Price per sq.m.: RP 2.6 million (around USD 183)

Bali, Badung, Canggu

  • Size: 1,075 sq.m.
  • Price: RP 550 million (around USD 38,800)
  • Price per sq.m.: RP 511,627 (around USD 36)

Bali, Badung, Seminyak

  • Size: 520 sq.m.
  • Price: RP 8 billion (around USD 564,373)
  • Price per sq.m.: RP 15,384,615 (around USD 1,085)

Keep in mind that prices differ depending on the land type and where you buy, a reason why the price differences are sometimes great.

If you’re interested in acquiring land in Indonesia, such as beachfront land in Bali, feel free to write us a message via the form at the end of the article and then we will help you.


Below I have listed the different taxes you have to pay when acquiring land in Indonesia. Keep in mind that rates change over time, you must confirm the latest information upon finalizing the purchase.

Land & Building Tax

A land & building tax, referred to as Pajak Bumi dan Bangunan (PBB), is charged on the buildings and land unless you receive an exemption.

Under current laws, the PBB rate is a maximum of 0.3% and multiplied by the sales value of the property.

The authorities have issued a negative list for properties that are not subject to the tax, including:

  • Properties used by regional and central governments
  • Properties used by the public for social, religious, educational, non-profit, or health purposes
  • Properties used as an ancient heritage, cemetery, or similar
  • Land comprising natural reserve forests, protected forests, national parks, tourism forests, grazing land controlled by villages, or state land with no rights imposed to the land
  • Others

Transfer Tax

A transfer tax of 2.5% is charged and multiplied by the gross transfer value. The seller has to pay the tax upon the transfer of the rights to the building and land.

Duty on the acquisition of land and building rights

At the time of the transfer of the land and building rights, the receiver/buyer of the land typically has to pay a duty referred to as (Bea Pengalihan Hak Atas Tanah dan Bangunan/BPHTB).

The duty is calculated based on the tax object acquisition value (Nilai Perolehan Objek Pajak/NPOP) as the value is often higher than the market value.

The rate is 5% but investors enjoy a non-taxable threshold that differs between regions. The thresholds are low and starting from RP 60 million (USD 4,230), thus being negligible to many investors.

Stamp Duty

Stamp duty is charged as a fixed amount for certain documents and ranges from RP 3,000 to RP 6,000.


Below I have included some commonly asked questions and our replies. If there’s anything else you wonder about, feel free to write a comment below or contact us by email.

Can foreigners buy land in Bali?

As explained, foreign individuals cannot buy land in Indonesia, a regulation that is valid for Bali as well. With that said, your best option is to set up a local PT PMA company to acquire land.

How can I find land for sale in Indonesia?

You can find land for sale via listings on real estate websites. However, these listings are sometimes not up-to-date and there’s limited information about the properties. You can also work with a credible partner that can help you source multiple options at once.

Can foreigners own freehold property in Indonesia?

No, foreigners are not allowed to own freehold property in Indonesia. Instead, we can lease or own properties under other arrangements, such as right-to-build or right-to-use contracts.

  • Want to buy commercial property in Asia?

    Fill out the form to get in touch with a verified real estate agency
    specialized in commercial property in Asia

      Disclaimer: The content on this website is provided for general information about buying property in Asia, developments, agencies, regulations, taxes, and other related topics. However, we don't guarantee that we keep the content up to date or that it's free from error. We do make mistakes from time to time. We never provide legal advice and financial advice of any sort. is not licensed to deal with any property situated in Hong Kong. We are not an estate agent or salesperson.