Can Foreigners Own Property in Indonesia?
Yes! Legally, safely, and through the right structure.
1/6/20263 min read
Short answer: foreigners cannot hold freehold land title (Hak Milik) in Indonesia, but they can legally control and profit from property in two main ways: a long-term leasehold (Hak Sewa), or a foreign-owned company, a PT PMA, holding a Right to Build title (Hak Guna Bangunan, HGB). Most foreign villa investors in Lombok and Bali use one of these two routes. Last updated: October 2026, by Nala Tropical Projects, villa developer in Kuta, Lombok.
Option 1: Leasehold (Hak Sewa)
A leasehold gives you the right to use, build on and rent out land for an agreed period, typically 20 to 30 years, often with an option to extend. The land stays in the name of the Indonesian owner, and your rights come from a lease agreement signed before an Indonesian notary.
Best for: buying a single villa as an investment or holiday home. Watch for: the length of the term, the extension terms and price, and that the agreement is notarised.
Option 2: PT PMA with HGB Title (Hak Guna Bangunan)
A PT PMA (Penanaman Modal Asing) is an Indonesian limited company that foreigners can own. It can hold HGB title, which lets the company own buildings on the land for an initial 30 years, extendable by 20 and renewable by a further 30, up to 80 years in total. With a PT PMA your company can buy, build and operate property, sign contracts, open a local bank account and repatriate profits.
Best for: investors running villas as a rental business, holding several units, or wanting company-level control. Watch for: minimum investment and capital requirements, monthly tax filings and ongoing accounting costs.
Taxes to Plan For (2026)
Corporate income tax (PPh Badan): 22% of a PT PMA's net profit. Companies with turnover up to IDR 50 billion get a 50% reduction (an effective 11%) on the portion of profit from the first IDR 4.8 billion of turnover (Income Tax Law, Article 31E).
Land and Building Tax (PBB): an annual tax set by the local regency, at a maximum of 0.5%, applied to 20% to 100% of the government-assessed value (NJOP). In practice this is usually a small annual amount.
BPHTB: duty of up to 5% paid by the buyer when acquiring land or building rights. VAT (PPN): 12% on sales of goods and services.
Important 2026 change: the 0.5% final tax on turnover, which new PT companies could previously use for their first three years, was restricted by Government Regulation PP 20/2026 (in force from 22 April 2026). It is no longer available to newly established PT or PT PMA companies; companies already using it keep it until their original period ends. Tax rules change often, so confirm your own situation with an Indonesian tax adviser before investing.
Frequently Asked Questions
Can a foreigner buy freehold land in Indonesia? No. Freehold (Hak Milik) is reserved for Indonesian citizens. Foreigners use leasehold, or a PT PMA holding HGB title.
How long does a leasehold last? Usually 20 to 30 years, often with an extension option. The exact terms are set in the lease agreement.
How long can a PT PMA hold HGB title? An initial 30 years, extendable by 20 and renewable by 30, for up to 80 years in total.
Can a new PT PMA still use the 0.5% tax rate? No. Since PP 20/2026 (April 2026), newly established PT and PT PMA companies pay the standard corporate rate, with the Article 31E reduction available to smaller companies.
How much is property tax (PBB)? A maximum of 0.5% of the taxable portion of the assessed value, usually a small annual amount.
Sources: Law No. 1/2022 (UU HKPD); Income Tax Law Articles 17 and 31E; PP 20/2026 amending PP 55/2022; PwC Worldwide Tax Summaries, Indonesia. Explore our projects in Kuta, Lombok: Nala Villas, Hawa Villas and Maya Villas.
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Kuta, LOMBOK, Indonesia