How Foreigners Legally Own Property in Indonesia

There are three legal ways for a foreigner to hold property in Indonesia and one illegal way that is still widely sold. The three are straightforward once explained. The fourth is the reason people lose their money, and 2026 has been the year Bali stopped being subtle about it.

Start with what is not possible

Hak Milik — freehold — is reserved to Indonesian citizens. Agrarian Law No. 5 of 1960, and it applies nationally. No visa, no marriage, no company shareholding changes it.

Article 26(2) of that law goes further: a transfer of freehold to a foreign national is batal demi hukum — void from the outset. Not voidable. Void. The land falls to the state, and the provision does not contemplate returning what was paid.

Everything below is a way of holding rights over land you do not own outright. That is not a workaround. It is how the system is designed.

Route one: Hak Sewa, leasehold

A private lease over someone else’s land, executed before a PPAT notary. Statutory basis is Articles 44 and 45 of the Agrarian Law, and there is no maximum term in law — though most Bali notaries decline to draft a single agreement longer than 30 years, which is why leases come as 25 or 30 years with extensions stacked on.

The critical feature: a lease is not a registered title. The certificate stays in the landowner’s name as Hak Milik. A lease can in some circumstances be annotated on that certificate at the land office, but an annotation is a record, not ownership, and it is not the norm. Your protection is the notarised contract and your willingness to litigate it.

Cheapest to enter — 2–4% transaction load — and nothing to hold. Best suited to a defined holding period rather than a lifetime.

Route two: Hak Pakai, right of use

Held in your own name, available to a foreigner holding a valid stay permit. 30 years, plus a 20-year extension, plus a 30-year renewal.

Restrictions that matter: residential use only, no commercial rental; one plot per person or family; maximum 2,000 m²; and a minimum purchase price, currently IDR 5 billion for a landed house in Bali under the 2022 ministerial decree. Confirm the current threshold with a notary, since these are periodically reissued.

The stay permit is a continuing condition, not a one-off check. If your immigration status lapses, so does your eligibility.

Route three: PT PMA holding HGB

A foreign-owned Indonesian company holds Hak Guna Bangunan, the right to build. 30 + 20 + 30 years. Commercial rental is permitted, which the other two routes restrict or forbid.

The capital rules changed in October 2025 and most published guides have not caught up:

• Minimum paid-up capital: IDR 2.5 billion — down from IDR 10 billion

• Separate investment plan above IDR 10 billion per business classification per project location

• Paid-up capital must stay in company accounts for at least twelve months

Two figures, two different obligations, routinely conflated. And note that the investor KITAS threshold is set by Immigration rather than the investment board, and appears not to have moved with the capital reduction — so the capital cut does not automatically cut the visa requirement.

On the 80 years

All three of the extendable structures are described as “80 years”. It is worth being precise about what that means: three separate administrative grants, each a fresh application, each granted on condition the land is still used for its stated purpose and still complies with the spatial plan in force at the time.

It is a strong, ordinary, workable position. It is not a freehold title with a long number attached, and it is worth noticing when someone sells it as one.

The nominee structure, and why it fails

A nominee arrangement puts the land in an Indonesian citizen’s name with side agreements giving the foreigner control. It is illegal, it has always been illegal, and the side agreements are void.

What changed in 2026 is enforcement. On 24 February 2026, Bali enacted Perda No. 4 of 2026, specifically prohibiting nominee land ownership alongside the conversion of productive farmland. It reaches the foreign beneficial owner, the registered nominee, and the intermediaries who facilitate the arrangement. Administrative sanctions run from written warnings through licence revocation to demolition and restoration of the land, with criminal exposure deferred to national legislation.

But the everyday failure mode is not a government raid. It is simpler and more common. In a case that reached the Supreme Court on cassation, an Indonesian nominee holding land at Jimbaran sold the property to a third party without the foreign owner’s knowledge. The nominee was the registered owner. On paper, she was entitled to.

That is the actual risk. Not the state coming for your villa — the person whose name is on it deciding, or dying, or divorcing, or borrowing against it.

What enforcement looks like now

In July 2025, roughly 48 to 50 businesses and buildings at Bingin Beach were demolished — cliffside villas, restaurants and bars, some operating since the 1980s. The grounds cited were the coastal boundary and cliff zone under the provincial rules and the national coastal management law, together with the absence of permits. Badung Regency has since begun a staged redevelopment of the beach itself — access, water infrastructure and public facilities in a first phase during 2026, with a second phase from 2027.

The relevant lesson for a buyer is not that Bali has become hostile. It is that “everyone does it here” stopped being a defence, and that the market has split in two: verified, permitted, correctly zoned assets now carry a premium, and everything else carries a discount that is not a bargain.

The short version

Use a lease if your horizon is defined and you want low entry cost. Use Hak Pakai if you are living in it. Use a PT PMA with HGB if you are renting it commercially or holding it for the long term.

Verify the certificate at the land office before money moves. Use your own notary. And if a structure requires you to trust that a document you are not named on will be honoured by someone you have met twice, it is not a structure.