Checklist Before Buying Property on an Indonesian Island
Before buying property on an Indonesian island, check six things above all: who holds the land certificate, what the zoning allows, whether the building has its permits, how the contract is signed, how your money is paid, and how you can leave. The 16-point checklist below expands those into concrete questions, and you can use it for Bali, Sumba or anywhere else in the country.
At the end, we show how Eco Beach City in Sumba answers each point, using only what we publish, and where you should ask us for documents. None of this is legal advice: use an independent Indonesian lawyer or notary for your own purchase.
Part 1: The land
1. The land certificate
Ask for a copy of the land certificate and check what type of right it is. Foreigners cannot hold freehold (Hak Milik) in Indonesia, so you need to know which right sits under your lease or company structure.
2. A check with the land office (BPN)
Have the certificate checked at the local office of the National Land Agency (BPN) to confirm it is genuine, matches the plot, and is free of disputes or mortgages.
3. Zoning: RDTR and KKPR
Confirm the land's zoning in the regional detailed spatial plan (RDTR) and whether the planned use has a spatial use approval (KKPR). A plot zoned for agriculture or conservation may not allow homes or tourist rentals.
Part 2: The building
4. Building approval (PBG)
In 2021, Indonesia replaced the old building permit (IMB) with the building approval known as PBG (Persetujuan Bangunan Gedung). Ask whether the building has one, or when it will be issued.
5. Certificate of fitness for use (SLF)
The SLF (Sertifikat Laik Fungsi) confirms a finished building is fit to be used. For new construction, ask when it is expected.
Part 3: The contract and structure
6. A notarial contract
Make sure the agreement is signed before an Indonesian notary, and get a copy in a language you understand.
7. Extension terms in writing
For a leasehold, check the length of the lease and exactly how it can be extended: when, at what cost or under what formula, and what happens if the owner changes.
8. No nominee arrangements
Do not accept any setup where an Indonesian citizen holds land in their name on your behalf. Nominee arrangements are void under Article 33 of Law 25/2007, which means you could lose the property with no legal claim.
9. The right structure for you
The common legal routes for foreigners are a registered leasehold, Hak Pakai (right of use), which requires a KITAS or KITAP residence permit, or a foreign-owned company (PT PMA). In Bali, Hak Pakai has minimum prices of IDR 5 billion for a house and IDR 2 billion for an apartment (Kepmen ATR/BPN 1241/2022). A PT PMA needs a planned investment of IDR 10 billion with IDR 2.5 billion paid up (BKPM Regulation 5/2025). Our post on whether foreigners can own property in Indonesia and the free ownership tool explain each route.
Part 4: The money
10. Staged payments to a company account
Pay in stages linked to progress, and pay to a company account in the name of the party that signs the contract, never to a personal account.
11. Who is financing what
Find out whether a bank or finance company is involved and what interest you pay. A plan with no interest and no third-party lender is simpler to understand.
Part 5: The basics on the ground
12. Road access
Is there legal, year-round road access to the plot?
13. Water and power
Where does water come from, and how is electricity supplied? Ask about backup during outages.
14. Internet
If you plan to work from the property, ask what connection is available and what speeds people actually get.
Part 6: After you buy
15. Community or management fees
Ask for the monthly fee in writing and what it covers.
16. Resale and rental rules
Can you sell or transfer the property, and how? Can you rent it out? Be wary of anyone who guarantees rental income or yields.
You can work through all of these with the free leasehold due diligence checklist, and look up unfamiliar terms in the Indonesia property glossary.
How Eco Beach City answers the checklist
Eco Beach City is a beachfront community on Sumba Island, East Nusa Tenggara, inside a private seafront residence with 2 km of beach. It has 24 homes built, a beachfront coworking space and padel and tennis courts, and guests already stay on site. Here is what we publish against each point.
Where we have a published answer:
- Structure (7, 9): buyers hold an 80-year leasehold that is renewable or, for some buyers, PT PMA equity.
- Notary (6): documents are signed before an Indonesian notary.
- Nominees (8): the published structures are leasehold and PT PMA equity, not nominee arrangements, which are void under Indonesian law.
- Financing (11): no bank and no financing company. Instalments are paid directly at 0% interest: up to 10 × €3,650 for the Beach Cabin or 10 × €29,500 for the villa.
- Internet (14): the beachfront coworking has Starlink, with 200+ Mbps reported.
- Fees (15): the community fee is €65 a month once a home is ready.
- Resale and rental (16): homes are fully transferable. Owners can live in them, rent them out or resell on the owners' marketplace. Rental income is never guaranteed.
Where you should ask us for documents:
- Certificate and BPN check (1, 2): ask for the land certificate and check it independently.
- Zoning (3): ask for the RDTR zoning and KKPR for the site.
- Permits (4, 5): ask for the PBG and, for finished homes, the SLF status.
- Extension terms (7): ask for the exact wording of the renewal clause.
- Payment account (10): ask which company account receives your instalments and how they are linked to construction stages.
- Road, water and power (12, 13): ask how each is supplied to your plot.
A good seller should be comfortable sending you these. If anything is unclear, put it in writing and have your own lawyer review it.
FAQ
Can a foreigner buy freehold land in Indonesia?
No. Freehold (Hak Milik) is for Indonesian citizens. Foreigners typically use a leasehold, Hak Pakai with a residence permit, or a PT PMA company.
What is a nominee arrangement, and why avoid it?
It is when an Indonesian citizen holds land in their name for a foreigner. Such arrangements are void under Article 33 of Law 25/2007, so the foreigner has no legal protection.
What are PBG and SLF?
PBG is the building approval that replaced the IMB permit in 2021. SLF is the certificate confirming a building is fit for use.
Should rental income be part of my decision?
Only with caution. Rental income is never guaranteed, so make sure the purchase still makes sense for you without it.
Next step
If you would like to run this checklist against a real project, request the price dossier and bring the questions above to your call. You can also read the FAQ first, or compare the Beach Cabin and the villa side by side before asking for documents.