Eco Beach City › Guides › Leasehold vs freehold in Indonesia
Leasehold vs freehold in Indonesia: what a foreigner can actually own
Short answer
A foreigner cannot own freehold land in Indonesia: Hak Milik is for Indonesian citizens only. What you can hold is a leasehold (a long lease before a notary, open to anyone), a right of use (Hak Pakai, up to 80 years, with a residence permit) or building rights through a company (HGB held by a PT PMA). Which one fits depends on whether you live there, rent it out, and how much you spend.
The four titles side by side
| Title | Who can hold it | Term | What you get |
|---|---|---|---|
| Freehold (Hak Milik) | Indonesian citizens only | No end date | Full ownership. Not available to foreigners, directly or through a nominee. |
| Leasehold (Hak Sewa) | Anyone, no residence permit | By contract, usually 25–30 years, extendable by agreement | The right to use and build on the land for the term, registered with a notary. No land certificate in your name. |
| Right of use (Hak Pakai) | Foreigners with a residence permit | 30 + 20 + 30 years (up to 80) | A title certificate at the land office (BPN) in your name, above a minimum price per province. |
| Building rights (HGB) via PT PMA | A foreign-owned Indonesian company | 30 + 20 + 30 years (up to 80) | The company holds the title and can run a rental business legally. |
Leasehold: simple, cheap to set up, limited by its contract
A leasehold is a rental contract for land, signed before a licensed notary. You can sign one on a tourist visa, there is no minimum price and no company to run. The acquisition tax (BPHTB) that applies to transfers of title does not apply to a lease.
The weak point is time. When the term ends the land, and normally the building, goes back to the owner unless you extend. So the clauses matter more than the price: the extension option and its price, what happens to the building at the end, and whether you can sublet or sell the lease on.
Hak Pakai: a title in your own name
Hak Pakai gives a foreigner a registered title for a house or apartment: 30 years, extendable by 20, renewable by 30. It needs a residence permit (KITAS or KITAP) and the property must be above the minimum price set for that province in Ministerial Decree ATR/BPN 1241 of 2022. If your residence permit lapses, the title has to be transferred within the legal period, so it suits people who really live in Indonesia.
PT PMA and HGB: for a rental business
A foreign-owned company can hold building rights (HGB) with the same 30 + 20 + 30 year structure and operate rentals legally. Since October 2025 the minimum paid-up capital is IDR 2.5 billion, but the investment plan still has to exceed IDR 10 billion per business activity, excluding land and buildings. Add yearly reporting, accounts and tax filings. It makes sense for larger investments, not for one holiday home.
What never works: a nominee
Putting freehold land in an Indonesian friend's name while you pay is not ownership. Agreements that hide the real owner are void under Article 33 of Law 25 of 2007, and you can lose both the land and the money.
Which one fits you
- A holiday home you use a few weeks a year: a leasehold with a clear extension clause.
- You live in Indonesia with a residence permit: Hak Pakai, if the property is above the provincial minimum.
- Several units or a rental business: a PT PMA holding HGB.
Not sure? The 4-question ownership test gives you an answer in a minute, and the due diligence checklist lists the documents to ask for.
How it works at Eco Beach City, Sumba
Homes at Eco Beach City are held as an 80-year renewable leasehold, or as equity in a PT PMA company: the two standard routes for foreign owners in Indonesia. Both are transferable. The Beach Cabin is €36,500 all-in (land, foundation, connections and furniture) and the villa with 3 bedrooms and a private pool is €295,000. How to check us before you pay anything.
Ask on WhatsApp+1 570 938 5414 Book a 15-min callWith the team
Questions people ask
Can a foreigner buy freehold property in Indonesia?
No. Freehold (Hak Milik) can only be held by Indonesian citizens under the Basic Agrarian Law (Law 5 of 1960). A foreigner can hold a leasehold, a right of use (Hak Pakai) with a residence permit, or building rights (HGB) through a foreign-owned company (PT PMA).
How long does a leasehold last in Indonesia?
As long as the contract says. Most leases are written for 25 to 30 years with an option to extend. There is no title certificate: your protection is the notarial lease and its extension clause.
How long does Hak Pakai last?
30 years, extendable by 20 and renewable by 30, so up to 80 years, under Government Regulation 18 of 2021. It requires a residence permit and a minimum property price set per province.
Is a nominee arrangement legal?
No. Agreements that hide the real owner of shares or land are void under Article 33 of Law 25 of 2007 on investment, and the foreign buyer can lose the property.
Sources
- BPK JDIH · Government Regulation 18 of 2021 (Hak Pakai and HGB terms)
- ATR/BPN JDIH · Ministerial Decree 1241 of 2022 (minimum prices for foreigners)
- Bali Property Rules · Hak Pakai vs leasehold vs PT PMA (30 + 20 + 30 terms)
- Magnum Estate · How foreigners own property in Bali 2026 (lease terms)
- Cekindo · PT PMA capital after Minister of Investment Regulation 5 of 2025
- BPK JDIH · Law 1 of 2022 (BPHTB)
Last updated 12 November 2026. General information, not legal, tax or financial advice. Rules change; check them with an independent Indonesian lawyer or notary before you sign anything.