Reviewed by Florent Delente, Founder, ILA Global Consulting. Last updated: October 2026.

A foreigner can invest in Indonesian property in four legal ways: a Hak Pakai title on a house or apartment above the minimum price for that province (from IDR 1 billion in most provinces to IDR 5 billion for houses in Bali and Java), a long lease, a foreign-owned company (PT PMA) holding a building right (HGB) for a licensed business, or shares in an existing company that already owns property. Freehold is closed to foreigners, and nominee arrangements are void. Returns are lower than marketing material suggests: listing-based gross yields averaged 8.22% nationally in Q3 2026 and 4.24% in Bali, before tax and costs.

This guide is for investors comparing structures and locations across Indonesia, from Jakarta apartments to Lombok, Labuan Bajo and Batam. If you are buying a home or villa in Bali specifically, our guide to buying property in Bali covers the Bali process step by step. Dollar figures use IDR 17,900 per USD (Katadata, 5 October 2026) and are approximate.

What can a foreign investor legally own in Indonesia?

invest in indonesia property and the best locations

The Agrarian Law reserves freehold (Hak Milik) for Indonesian citizens (Law 5/1960, Art. 21). Everything a foreigner holds is a narrower right:

  • Hak Pakai (right of use) in your own name, for a landed house or an apartment unit used as a residence, if you hold immigration documents (PP 18/2021, Art. 69 and 71). 30 years, extendable by 20, renewable by 30.
  • Apartment unit title (Hak Milik atas Satuan Rumah Susun) in a building on HGB or Hak Pakai land. Units on HGB land are open to foreigners in special economic zones, free trade zones, industrial estates and other economic areas (PP 18/2021, Art. 71(2)).
  • Leasehold, a contract with an Indonesian owner, with no price floor and no statutory maximum term.
  • HGB (right to build) through a PT PMA, for land the company uses in its licensed business. 30 + 20 + 30 years (PP 18/2021, Art. 37).

A Hak Pakai house is a residence, not a business. Renting property out as a business needs a company and the right licences, and in Bali the codes for that have been closed to new PT PMAs since May 2026 (see below).

ILA’s real estate legal team advises investors on structure, title and contract before money moves. We do not sell property or take commissions from sellers.

What is the minimum price for foreigners in each province?

Ministerial Decree (Kepmen ATR/BPN) 1241/SK-HK.02/IX/2022 sets the lowest price at which a foreigner may acquire a residence. Below it, the deed cannot be registered in a foreigner’s name.

Province Landed house (Hak Pakai) About USD Apartment unit About USD
DKI Jakarta IDR 5 billion 279,000 IDR 3 billion 168,000
Banten, West Java, Central Java, Yogyakarta, East Java IDR 5 billion 279,000 IDR 2 billion 112,000
Bali IDR 5 billion 279,000 IDR 2 billion 112,000
West Nusa Tenggara (Lombok, Sumbawa) IDR 3 billion 168,000 IDR 1 billion 56,000
North Sumatra, East Kalimantan, South Sulawesi, Riau Islands (Batam, Bintan) IDR 2 billion 112,000 IDR 1 billion 56,000
All other provinces, including East Nusa Tenggara (Labuan Bajo, Sumba) IDR 1 billion 56,000 IDR 1 billion 56,000

Sources: detikProperti, 21 December 2024; ATR/BPN presentation on foreign ownership; hukumonline. Indonesian diaspora buyers pay 75% of these figures. Land is limited to one plot per person or family, up to 2,000 m2, unless the Minister approves more.

The thresholds shape each market. In Bali, most villas sold to foreigners cost less than IDR 5 billion and are therefore leaseholds. In Lombok, the floor for a Hak Pakai house is IDR 3 billion; in East Nusa Tenggara it is IDR 1 billion.

Which structure fits your investment plan?

Structure Best for Can you earn rental income? Capital needed Income tax on rent Exit
Hak Pakai house or apartment in your name A home you live in part of the year, with capital growth Not as a business; residential purpose The provincial minimum price 10% final on rent if let (resident); 20% for non-residents unless a treaty applies Sale to an eligible foreigner or to an Indonesian; seller pays 2.5%
Leasehold held personally Lower entry price, especially in Bali and Lombok Through a licensed operator or management company No minimum The landowner pays 10% on your rent; if you sublease, you owe tax on your income Assign the lease (owner’s consent usually needed); value falls as the term runs down
PT PMA holding HGB Hotels, larger resorts, developments, commercial property Yes, under the company’s licences IDR 2.5 billion paid-up capital per business code, IDR 10 billion investment plan Corporate tax 22%, or 10% final on building rental income Sell the land, or sell the shares
Shares in an existing PT PMA that owns property Buying an operating hotel or villa business Yes, if its licences are valid Price of the shares As for the company Sell the shares again
Nominee (Indonesian holds freehold for you) Nothing No legal claim n/a n/a Void under Law 25/2007 Art. 33

Sources: PP 5/2002 on rental income tax, PP 34/2016 on transfer tax, PwC corporate tax summary, Withers on BKPM Regulation 5/2025, Law 25/2007.

The Bali exception. Since the third week of May 2026, new PT PMAs in Bali cannot register 18 business codes, including real estate owned or leased (KBLI 68111), villas and other accommodation (55900) and hotels under 6,000 m2 (55110, 55120) (ANTARA, 23 July 2026). The block is Bali only: a PT PMA can still register real estate activities in Lombok, Labuan Bajo, Batam or Jakarta, subject to zoning and the usual capital rules. Our PT PMA setup guide covers the company side.

Land banking. Buying land to hold for resale is the hardest strategy for a foreigner. A Hak Pakai is only for a residence, and a company’s HGB must be used for its licensed purpose. Land rights left unused can be declared abandoned (tanah telantar) and taken back under PP 48/2025, which replaced PP 20/2021 on 6 November 2025. A long lease with a clear right to develop and assign is often the more realistic way to hold land.

Where outside Bali are foreigners investing in 2026?

Area Foreign minimum (house / apartment) What the data shows Main legal or market risk
Jakarta IDR 5 billion / IDR 3 billion Listing-based gross yield 12.00%, Q3 2026 Oversupply in some apartment segments; yields on listings, not achieved rents
Bali IDR 5 billion / IDR 2 billion Gross yield 4.24%; non-star occupancy 43.16% in August 2026 Closed PT PMA codes, LP2B farmland ban, leasehold-only below IDR 5 billion
Lombok and Mandalika (NTB) IDR 3 billion / IDR 1 billion Mandalika: 285,003 visits January to April 2026, hotel occupancy 44.57% Land certificate disputes outside the special economic zone
Labuan Bajo (NTT) IDR 1 billion / IDR 1 billion 49,634 visitors to April 2025, down about 1%; over 80% stay on boats Small hotel market; land titles and coastal setbacks
Batam and Bintan (Riau Islands) IDR 2 billion / IDR 1 billion Special economic zones and free trade status; close to Singapore Market driven by industry and Singapore demand, not tourism
Sumba (NTT) IDR 1 billion / IDR 1 billion Early-stage tourism Customary (adat) land and communal ownership disputes
Nusantara (IKN, East Kalimantan) IDR 2 billion / IDR 1 billion Capital city project 190-year land rights struck down in November 2025

Sources: Global Property Guide, Q3 2026; BPS Bali, August 2026; Republika, 24 May 2026; ANTARA Kupang, 30 April 2025; detikFinance, 24 November 2025.

Jakarta

Jakarta is the only Indonesian market with a real resale market for foreign-eligible apartments, and the only one where a few banks have financed foreign buyers (see our guide to mortgages for foreigners). Global Property Guide reports an average listing-based gross yield of 12.00% for Jakarta in Q3 2026, the highest of the cities it tracks, and notes that net yields are typically 1.5 to 2 points lower. Treat that as an upper bound: it is based on asking rents for listed units, which skews towards small apartments.

Lombok and the Mandalika special economic zone

Mandalika, on Lombok’s south coast, is a tourism special economic zone (KEK) developed by the state company InJourney Tourism Development Corporation (ITDC). It recorded 285,003 visits between January and April 2026, average stays rising to 2.33 days, and hotel occupancy of 44.57%. Lombok’s international airport handled 850,319 passengers over the same four months, up about 18.4% (Republika). Land inside the zone is allocated by the operator; land outside it, in Kuta, Selong Belanak or Ekas, comes with the usual Lombok risks of overlapping claims and unclear boundaries. The Bali closure of PT PMA codes does not apply in Lombok. Our guide to buying property in Lombok covers the island in detail.

Labuan Bajo and Flores

Labuan Bajo is the gateway to Komodo National Park and one of the government’s priority tourism destinations, with direct flights from Singapore and Malaysia. Visitor numbers are modest: the destination authority (BPOLBF) counted about 49,634 visitors to the end of April 2025, roughly 1% fewer than a year earlier, and more than 80% of tourists stay on liveaboard boats rather than in hotels (ANTARA Kupang). That limits demand for land-based rentals. The foreign minimum price in East Nusa Tenggara is the lowest tier, IDR 1 billion.

Batam and Bintan

The Riau Islands are an industrial and Singapore-facing market rather than a holiday rental market. The government has created special economic zones in Batam, including two designated together (KEK National Council), and apartments on HGB land are open to foreigners in such zones (PP 18/2021, Art. 71(2)). The foreign minimum for a house is IDR 2 billion.

Sumba

Sumba attracts land buyers looking for the “next Bali”, but most land is subject to customary (adat) claims, and consent from one family member rarely settles the question. Read our Sumba investment guide before committing.

Nusantara (IKN)

In 2023 the law on the new capital allowed land rights of up to 190 years in two cycles for investors. In November 2025 the Constitutional Court partly granted case 185/PUU-XXII/2024 and ruled that HGU, HGB and Hak Pakai in IKN must follow the national limits instead (detikFinance, 24 November 2025). Any pitch still promising “190 years” is out of date.

What rental yields can you expect?

City (Global Property Guide, Q3 2026) Gross rental yield
Jakarta 12.00%
Tangerang 9.61%
South Tangerang 7.69%
Surabaya 7.57%
Bali 4.24%
Indonesia average 8.22%

Source: Global Property Guide, based on listing data. Gross means before tax, management, maintenance, vacancy and agent fees.

For Bali, official occupancy data is the better guide. Star hotels ran at 68.19% occupancy in August 2026 and non-star hotels and other lodging, which includes villas, at 43.16% (BPS Bali). Foreign arrivals from March to August 2026 were 2.4% below the same months of 2025. Claims of “15% guaranteed returns” do not match those numbers.

Illustration: why leasehold returns look better than they are. Take a 25-year Bali leasehold villa bought for IDR 4,000,000,000 (about USD 223,000) and leased to a licensed operator for IDR 400,000,000 a year. These are assumptions, not market figures.

Line IDR per year
Rent received from the operator 400,000,000
Final tax on rent, 10% (40,000,000)
Maintenance and insurance, assumed 1% of price (40,000,000)
Lease amortisation: IDR 4 billion over 25 years (160,000,000)
Net return 160,000,000
Net yield on the price 4.0%

The “gross yield” on this deal looks like 10%. Once you account for the fact that the lease is worth nothing at the end, it is 4%, before any vacancy or currency loss. A Hak Pakai or HGB does not amortise the same way, but carries higher entry prices and its own constraints.

How is property income taxed?

  • Rent from land and buildings: 10% final income tax on the gross rent for resident individuals and companies (PP 5/2002). For non-residents, rent is subject to 20% withholding under Article 26 of the Income Tax Law unless a tax treaty reduces it (PwC, withholding taxes).
  • Hotel and villa operations: a business, not a lease. The company pays 22% corporate income tax on profit (PwC), and guests pay the regional hospitality tax (PBJT), set at 10% in Denpasar (DDTC News).
  • Dividends: 20% withholding when paid to a non-resident shareholder, reduced under a tax treaty (PwC).
  • Annual land and building tax (PBB): up to 0.5% of the taxable value, at rates set by each regency (UU HKPD 1/2022, Art. 41).
  • New property from developers: VAT at 11% effective. Throughout 2026, under PMK 90/2025, the government pays the VAT on the first IDR 2 billion of new houses and apartments priced up to IDR 5 billion and handed over in 2026 (Katadata, 6 January 2026).

Our property tax guide has worked examples, and ILA’s accounting and tax team handles filings for owners and companies.

How do you exit an Indonesian property investment?

Plan the exit before you buy, because each structure has a narrow pool of buyers.

Structure How you sell Tax on the sale What limits the exit
Hak Pakai house or apartment Deed of sale (AJB) before a PPAT Seller: 2.5% final on the gross price; buyer: BPHTB up to 5% Buyer must be an eligible foreigner paying at least the provincial minimum, or an Indonesian (who can apply to upgrade the title to Hak Milik under PP 18/2021, Art. 94)
Leasehold Assignment of the lease, usually with the owner’s consent Depends on the contract and your gain Shrinking remaining term; owner’s consent
PT PMA asset sale Sale of the HGB 2.5% final on the gross price Buyer must be an Indonesian company eligible for HGB
PT PMA share sale Share transfer by notarial deed, update in OSS and the Ministry of Law Non-resident seller: 5% of the gross price (20% on a deemed 25% gain) unless a treaty exempts it Buyer due diligence on licences, tax and LKPM reports

Sources: PP 34/2016, UU HKPD 1/2022, PwC withholding taxes, PP 18/2021.

Two forced-exit rules matter. If you stop qualifying to hold a Hak Pakai, for example because you no longer have immigration documents, you must sell or transfer it within one year or it ends by law (PP 18/2021, Art. 50). And a PT PMA that loses its licences, or whose land is left unused, puts its HGB at risk.

What changed for property investors between 2024 and 2026?

  • May 2026: Bali closed 18 business codes, including real estate rental and villa accommodation, to new PT PMAs.
  • February 2026: Bali Regional Regulation 4/2026 banned converting protected farmland (LP2B) into villas and commercial property, with criminal sanctions and demolition (Lingkari News), following the governor’s September 2025 moratorium on hotels and villas on productive land (Metro TV).
  • November 2025: PP 48/2025 replaced the 2021 rules on abandoned land, and the Constitutional Court cut IKN land rights back to national limits.
  • October 2025: BKPM Regulation 5/2025 cut PT PMA paid-up capital to IDR 2.5 billion per business code, and allowed land and buildings to count toward the investment plan in property and accommodation.
  • 2026: VAT on new homes up to IDR 5 billion is government-borne on the first IDR 2 billion (PMK 90/2025); Bank Indonesia’s relaxed loan-to-value rules run to the end of December 2026; the BI-Rate stood at 5.75% in September 2026 (CNN Indonesia).
  • Unchanged since 2022: the minimum prices for foreigners under Kepmen 1241/2022.

What are the main risks for foreign property investors?

  1. Title. A certificate in the wrong name, a plot that does not match its boundaries, or a registered mortgage. Check at the land office before you pay.
  2. Customary and family claims. Especially in Sumba, Flores and rural Lombok and Bali. One signature rarely binds the whole family or the village.
  3. Zoning. Spatial plans, green zones, protected farmland and coastal setbacks decide what you can build.
  4. Licensing. A villa you cannot license is a home, not an investment.
  5. Nominees. Void under Article 33 of Law 25/2007 and Article 26 of the Agrarian Law.
  6. Liquidity. Few eligible buyers for Hak Pakai and PT assets; leaseholds lose value every year.
  7. Currency. The rupiah was around IDR 17,900 per USD in October 2026. Rents in rupiah are worth less in your currency when it weakens.

ILA’s due diligence team checks title, zoning, permits, the seller and the company before you commit. Contact us with the property details and your intended structure.

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Frequently asked questions

Can foreigners buy property in Indonesia?

Yes, but not freehold. A foreigner can hold a Hak Pakai on a house or an apartment title above the provincial minimum price, a long lease, or a building right (HGB) through a PT PMA for a licensed business.

What is the minimum price for a foreigner to buy a house in Indonesia?

It depends on the province: IDR 5 billion in Jakarta, Java and Bali, IDR 3 billion in West Nusa Tenggara, IDR 2 billion in North Sumatra, East Kalimantan, South Sulawesi and the Riau Islands, and IDR 1 billion elsewhere. Apartments start at IDR 1 billion to IDR 3 billion.

Can I buy property in Indonesia to rent out?

Not as a private individual on a Hak Pakai, which is for residence. Rental businesses need a company and licences. In Bali, new PT PMAs can no longer register real estate rental or villa accommodation codes; outside Bali they still can.

What rental yield can I expect in Indonesia?

Listing-based gross yields averaged 8.22% across Indonesia and 4.24% in Bali in Q3 2026. Net yields are lower after tax, management and maintenance, and much lower on a leasehold once the lease amortises.

How is rental income taxed in Indonesia?

Rent from land and buildings is taxed at 10% final for residents and companies. Non-residents face 20% withholding unless a tax treaty reduces it. Running a hotel or villa business is taxed as company profit at 22%.

Can I sell my Hak Pakai property to an Indonesian?

Yes. The seller pays 2.5% final tax and the buyer pays BPHTB. An Indonesian buyer can apply to upgrade a residential Hak Pakai to freehold.

Is it safe to invest through an Indonesian nominee?

No. Nominee agreements are void under Article 33 of Law 25/2007, and any indirect transfer of freehold to a foreigner is void under the Agrarian Law, with no refund.

Sources

  1. Law 5/1960 on Basic Agrarian Principles, JDIH BPK
  2. PP 18/2021 on Management Rights, Land Rights, Apartment Units and Land Registration, JDIH BPK
  3. detikProperti: foreigners owning property in Indonesia, rules and minimum prices (21 December 2024)
  4. ATR/BPN presentation: property ownership and land certainty for foreigners
  5. Hukumonline: minimum prices for foreigners under Kepmen ATR/BPN 1241/2022 (February 2023)
  6. Law 25/2007 on Investment, JDIH BPK
  7. ANTARA: Bali blocks foreign investment in 18 business categories (23 July 2026)
  8. Withers: key takeaways from BKPM Regulation 5 of 2025
  9. PP 48/2025 on Abandoned Areas and Land, JDIH BPK
  10. Global Property Guide: gross rental yields in Indonesia, Q3 2026
  11. BPS Bali: tourism developments, August 2026
  12. Republika: The Mandalika investment and tourism figures (24 May 2026)
  13. ANTARA Kupang: BPOLBF, Labuan Bajo tourism (30 April 2025)
  14. KEK National Council: two new special economic zones in Batam
  15. detikFinance: 190-year land rights in IKN cancelled (24 November 2025)
  16. PP 5/2002 on Income Tax on Land and Building Rental, JDIH BPK
  17. PP 34/2016 on Income Tax on Land and Building Transfers, JDIH BPK
  18. UU HKPD 1/2022 on Central and Regional Fiscal Relations, JDIH BPK
  19. PwC Worldwide Tax Summaries: Indonesia, taxes on corporate income
  20. PwC Worldwide Tax Summaries: Indonesia, withholding taxes
  21. DDTC News: Denpasar regional tax rates (February 2024)
  22. Katadata: VAT incentive on homes extended for 2026, PMK 90/2025 (6 January 2026)
  23. Lingkari News: Bali Perda 4/2026 on farmland conversion (February 2026)
  24. Metro TV / Media Indonesia: Bali moratorium on hotels and villas on productive land (15 September 2025)
  25. CNN Indonesia: BI-Rate held at 5.75% (23 September 2026)
  26. Katadata: rupiah at IDR 17,916 per USD (5 October 2026)