Owning a Property in Indonesia

An overview of the legislation involved in property transactions within Indonesia…

In Indonesia all land matters are controlled by the National Land Agency (Badan Pertanahan Nasional Republik Indonesia). This agency was created to administer all matters relating to the Basic Agrarian Law of 1960. Its remit includes the registration of land rights and the granting of rights and permits for land use. All land transactions in Indonesia take place at the local notary's office.

It remains very difficult for foreigners in Indonesia to own freehold property (Hak Milik) and have their name as owner on a land title. However, it is possible for foreigners to hold a title of "Right of Use" (Hak Pakai) for 25 years, with the possibility of renewal for another 25 or 35 years. Hak Pakai is the right to use land owned by the state, or other public or private persons, for a defined period. The land cannot be exchanged, transferred or sold unless explicitly stated in the agreement. These titles can be held by foreigners even if they only visit the country occasionally. They should ensure that the Hak Pakai is registered in their name. It is not possible to mortgage a Hak Pakai title.

Renewing Rights

Renewing the rights or extending a lease on land or property is carried out by submitting an application to the National Land Agency. Applications should be submitted a year before the current lease or right expires. There is a fee payable for extending rights and leases.