Investing in Indonesia: Yields, Appreciation & Ownership
Who can buy, how ownership works, and the taxes and duties for buying property in Indonesia.
Who can buy in Indonesia
Indonesian land law reserves Hak Milik (freehold) for Indonesian citizens. Foreigners can hold Hak Pakai (right to use, up to 80 years residential), Hak Sewa (lease, 20-25 years), or Hak Guna Bangunan via a PT PMA company (80 years). Commonly applies in Bali and other provinces.
| Buyer | Permitted | Tenure | Conditions |
|---|---|---|---|
| Indonesian Citizen | Yes | Freehold (Hak Milik) | UnrestrictedApproval: BPN registration |
| Foreign National (residential) | Conditional | Hak Pakai | Right to use: 30 + 20 + 30 years up to 80 totalApproval: BPN registration |
| Foreign National (lease) | Yes | Leasehold (Hak Sewa) | 20-25 years renewable by agreementApproval: Notary agreement |
| PT PMA Company | Yes | HGB (Right to Build) | Up to 80 years via foreign-owned companyApproval: BKPM + BPN |
Capital gains on a sale
In Indonesia, capital gains from the sale of land and buildings are subject to a final income tax.
| Holding period | Classification | Tax rate | Indexation |
|---|---|---|---|
| Any | Sale of Land and Buildings (Indonesian Taxpayers) | 2.5% of transaction value | No |
| Any | Sale of Land and Buildings (Foreigners without tax treaty) | 5% of gross proceeds | No |
Always consult a licensed real estate attorney before purchase. Rules change; verify current law. Always confirm with a qualified tax professional. Rules change; verify with a professional before you transact.
Checking a Certificate at BPN Before You Sign
A BPN certificate check confirms a land certificate is genuine, valid, correctly registered and free of encumbrances, for a cost that is a fraction of a percent of a typical purchase price. Skipping it, or accepting secondhand assurance that it was done, is one of the most avoidable mistakes a foreign buyer in Indonesia can make.
Frequently asked questions about Indonesia
With conditions. Right to use: 30 + 20 + 30 years up to 80 total
Buying or selling in Indonesia?
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