Foreign Ownership Restrictions
RestrictiveIndonesia has significant restrictions on foreign property ownership. Foreigners cannot own freehold land (Hak Milik). Several alternative structures exist, with Hak Pakai (Right to Use) being the strongest title available to foreigners.
- Foreigners CANNOT own freehold land (Hak Milik) in Indonesia -- this title is exclusively for Indonesian citizens
- Hak Pakai (Right to Use): Available to foreigners with KITAS/KITAP. Initial term of 30 years, extendable by 20 years, then renewable for 30 years (80 years total). Government Regulation No. 103/2015 and updated No. 18/2021 govern these rights.
- Hak Sewa (Lease Right): Lease agreement directly with the landowner, typically 25-30 years with notarized renewal options. No KITAS required. This is the most common structure for foreign buyers in Bali.
- Minimum property value thresholds for foreign buyers: IDR 1 billion (~USD 62,000) for apartments/flats, IDR 5 billion (~USD 310,000) for houses. These thresholds vary by province and are set by regional government.
- PT PMA (foreign-owned company) can hold Hak Guna Bangunan (Right to Build, 30 years + extensions) for commercial property. Requires BKPM approval and minimum investment commitment.
- Bali-specific: The vast majority of foreign property investment in Bali uses leasehold (Hak Sewa) structures. Hak Pakai is less common for Bali villas due to KITAS requirements. Always use a notarized lease agreement with clear renewal terms.
- Nominee arrangements (using an Indonesian citizen's name to hold Hak Milik for a foreigner) are illegal and not enforceable in Indonesian courts. The nominee can legally claim full ownership.
