Buying or selling property in Indonesia can be a rewarding experience — whether it’s a villa in Bali, a boutique resort in Lombok, or a city apartment in Jakarta.
But the process is very different from Western markets. Every deal must go through legal verification, taxation, and registration with Indonesia’s BPN (National Land Agency).
This guide from DDA Real Estate explains the complete 2025 process — from due diligence to title registration — so you can invest with confidence and full legal protection.
Indonesia’s land system is built on specific ownership types that define who can legally own, lease, or develop property.
| Land Type | Indonesian Term | Who Can Own | Duration |
|---|---|---|---|
| Freehold | Hak Milik (SHM) | Indonesian citizens only | Permanent |
| Right to Build | Hak Guna Bangunan (HGB) | Foreigners via PT PMA | Up to 80 years total (30 initial + 20 + 30 extensions, subject to approval) |
| Leasehold | Hak Sewa | Foreigners (individuals) | 25–30 years, extendable |
Foreigners can't buy freehold land (Hak Milik) directly in Indonesia, but there are two fully legal and transparent alternatives that provide long-term security and ownership control—plus one path to avoid.
Each option has its advantages depending on your goals — whether you’re building a business, renting a villa, or planning a lifestyle investment.
Setting up a PT PMA (Perseroan Terbatas Penanaman Modal Asing) — a foreign-owned limited company — is the most secure and powerful way to own property in Indonesia. Once the company is registered, it can acquire land under the Right to Build (Hak Guna Bangunan, HGB) title. This is a state-recognized ownership right that allows foreign investors to legally build, lease, sell, or operate real estate for business purposes.
Key benefits of HGB through PT PMA:
For investors planning to run villas, resorts, or wellness centers, PT PMA + HGB is the gold standard — 100% legal, renewable, and globally bankable.
DDA Real Estate helps investors establish PT PMA structures, register HGB titles, and secure land for compliant operations across Bali.
For those who don’t need a business entity, Leasehold (Hak Sewa) is the easiest and most practical solution. You’re not buying the land itself — you’re securing the right to use it, build on it, and profit from it for a defined term. Typically, leases run for 25–30 years initially, with extensions available up to 70–80 years, depending on the agreement.
Advantages of Leasehold:
Example:
An investor leases a 400 m² plot in Canggu for 30 years, builds a villa, and rents it on Airbnb. After 10 years, he sells the remaining lease term to another buyer. Both transactions are legal, notarized, and profitable.
The key is to sign your lease agreement before a licensed notary (PPAT) and register it at BPN — that’s what gives your rights real legal weight. Leasehold is ideal for lifestyle investors who want to live, build, or rent without managing a company.
Some agents still offer a shortcut: “Buy freehold through a local Indonesian’s name (nominee) and sign a private agreement.” This structure is illegal and unenforceable. Under Indonesian law, only citizens can own Hak Milik (Freehold) — and any attempt to bypass that using a nominee can result in:
Even if your nominee is trustworthy today, the ownership is not — legally, you have no claim if they sell, die, or change their mind.
The DDA Principle:
At DDA Real Estate, we never promote nominee arrangements. Our focus is on clean, compliant ownership models — PT PMA for business investors and properly notarized Leasehold for individuals. Transparency isn’t just legality — it’s long-term protection for your capital and peace of mind.
| Ownership Type | Foreign Eligible? | Duration | Best For | Risk Level |
|---|---|---|---|---|
| PT PMA (HGB) | Yes | Up to 80 years | Business, rentals, resale | Low |
| Leasehold (Hak Sewa) | Yes | 25–80 years | Personal use, villas | Low–Medium |
| Nominee (Hak Milik) | No | — | None | Very High |
In Indonesia, the safest path is always the legal one — and DDA Real Estate guides every client through a structure that aligns with both your goals and the country’s laws.
Buying real estate in Indonesia involves several clearly defined legal stages. Skipping any step can create future ownership risks or tax penalties.
Before paying any deposit, verify:
Never rely solely on photocopies — real verification is done at the Land Office (BPN) through a notary or legal consultant.
Read more: “Land verification in Bali”.
Once the property is verified, buyer and seller sign a Preliminary Sale Agreement (PPJB) defining:
Deposits should always be held in a notary’s escrow account to protect both parties.
The AJB (Akta Jual Beli) is the official notarial document transferring ownership. It’s prepared and executed by a licensed notary (PPAT) authorized by BPN.
The notary ensures:
In Indonesia, a notary is both legal drafter and state registrar — their role is critical for ownership security.
All payments must go through bank transfer (no cash). Both sides have tax responsibilities:
| Tax Type | Party | Rate | Description |
|---|---|---|---|
| BPHTB (Land Transfer Tax) | Buyer | 5% | Based on property value (above threshold) |
| PPh (Final Income Tax) | Seller | 2.5% | Calculated on sale price |
| VAT (if applicable) | Developer | 11% | For new builds and primary sales |
Tax proof is required for BPN registration — missing payments delay title issuance.
After signing and paying taxes, the notary submits the sale to BPN for title registration.
Required documents:
Timeline: 4–8 weeks. When approved, BPN issues a new land certificate under the buyer’s name (for Indonesians) or under the PT PMA (for foreigners via HGB).
After registration, confirm:
Ongoing compliance ensures your investment stays profitable and protected during audits or resale.
For sellers, the sequence mirrors the buyer’s process:
| Step | Responsibility |
|---|---|
| 1 | Provide clear title and valid certificate (SHM/HGB) |
| 2 | Agree on price and sign PPJB |
| 3 | Pay PPh (2.5%) before signing AJB |
| 4 | Sign the AJB before notary (PPAT) |
| 5 | Submit documents for BPN registration |
A professional notary ensures full legal transfer and release of liability for the seller.
| Stage | Duration | Average Cost (USD) |
|---|---|---|
| Legal verification | 3–7 days | 300–600 |
| Notary & registration | 2–4 weeks | 1–2% of property value |
| Taxes (buyer + seller) | — | 5–7.5% combined |
| BPN registration | 4–8 weeks | 200–400 |
| Total transaction time | 6–10 weeks | — |
BPN’s new e-registration (since 2024) has shortened processing time across Bali and Jakarta.
DDA Real Estate ensures each of these steps is handled transparently and professionally — no shortcuts, no risks.
Every mistake here costs more to fix than to prevent — legality is your best ROI.
Read also: “Immigration to Bali: complete guide for expats and travelers”, “How to Check a Developer on Bali”, “Tips for First-Time Homebuyers in Bali”.
DDA Real Estate helps foreign and local investors navigate Indonesia’s complex property landscape.
Our services include:
From land checks to title registration — we make property transactions in Indonesia simple, secure, and transparent.
