Buying Property in Indonesia: Ownership, Prices and Tax

Buying property in Indonesia is open to foreigners, and you can hold the home in your own name. A foreigner can own a house under Hak Pakai, a right of use, or own an apartment unit. Freehold land stays with Indonesian citizens.

For property that earns income, the route is a PT PMA, a limited liability company with foreign shareholders, which holds land under HGB (Hak Guna Bangunan), the right to build.

The sections below cover what you can own, the minimum price where you buy, the company route, property as a business, and the taxes on buying and letting.

What a foreigner can own in their own name

Freehold, Hak Milik, is for Indonesian citizens only (Basic Agrarian Law, or UUPA, Article 21(1)). What a foreigner can hold is set by a government regulation (Peraturan Pemerintah, or PP), PP 18/2021, in force since 2 February 2021:

• A house on Hak Pakai. On State land, or on land under a management right (Hak Pengelolaan), Hak Pakai runs for up to 30 years. It can be extended by up to 20 years, then renewed for up to 30 (Article 52(1)).
• An apartment unit in a commercial development, which you own as a unit (Hak Milik atas Satuan Rumah Susun) (Article 67(1)(c)).

The rules for foreigners’ homes are in PP 18/2021, Articles 69 to 72, and in a ministerial regulation (Peraturan Menteri, or Permen) of the Ministry of Agrarian Affairs and Spatial Planning and National Land Agency (ATR/BPN), Permen ATR/BPN 18/2021, Articles 186 and 187:

• You need the immigration documents the law requires (PP 18/2021, Article 69(1)). Indonesia’s visa categories sets out the permits.
• The home is for living in. A house can sit on one plot per person or family, of up to 2,000 m².
• You can buy a new home or a resale one.

You can leave the home to your heirs, mortgage it and sell it, as a ministerial decision (Keputusan Menteri, or Kepmen), Kepmen ATR/BPN 1241/SK-HK.02/IX/2022, states. If you stop qualifying, for example because you leave Indonesia for good, the law gives you a year to sell or transfer the property (PP 18/2021, Article 50).

Minimum prices for foreign buyers

A foreigner’s home must cost at least a minimum price, which the same Kepmen 1241 sets by province. It was signed and took effect on 12 September 2022.

In the provinces the decision does not name, both minimums are IDR 1 billion. In the provinces it does name, a house starts at between IDR 2 billion and IDR 5 billion, and an apartment at IDR 2 billion or IDR 3 billion. A home bought before 12 September 2022 follows the rules that applied when it was bought.

Owning property through a PT PMA

A company established and based in Indonesia can hold land under HGB, and a PT PMA is such a company (PP 18/2021, Article 34). HGB on State land has the same 30, 20 and 30-year term as Hak Pakai (Article 37(1)). A company can also hold Hak Pakai (Article 49(2)(b)), but it cannot hold freehold.

Freehold cannot pass to a foreigner, even indirectly: any arrangement that tries is void (UUPA, Article 26(2)). The lawful routes are the two in the table above.

Property as a business

Owning, letting and managing property as a business is open to foreign investors. The investment list, a presidential regulation (Peraturan Presiden, or Perpres), does not include real estate among the business lines it caps or reserves (Perpres 10/2021 as amended by Perpres 49/2021, Lampiran II and III, its annexes).

Villas, homestays, guest houses and one-star hotels are the exception: the list keeps them for co-operatives and small businesses (Lampiran II, entry 48). The business lines that matter in Bali are compared in how to set up a company in Bali.

For a property business, land and buildings count toward the PT PMA’s planned investment of more than IDR 10 billion (Permeninves/BKPM 5/2025, Article 26(5), a regulation of the Minister of Investment and the Investment Coordinating Board). The capital rules and the setup steps are on the PT PMA company setup page, and MAM confirms the business line before anything is filed.

The permit to build or alter a building is now the Building Approval (Persetujuan Bangunan Gedung, or PBG). It replaced the old building permit, the IMB (Izin Mendirikan Bangunan) (UU 6/2023, Article 24).

Taxes when buying property in Indonesia

• Acquisition duty, paid by the buyer. BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan) is up to 5%, at the rate the region sets. The region charges it on the price, or on the assessed value (Nilai Jual Objek Pajak, or NJOP) if that is higher, after a tax-free amount of at least IDR 80 million for your first acquisition in that region. It applies to HGB, Hak Pakai and apartment units, not to taking a lease (UU 1/2022, Articles 44 to 47).
• Final tax, paid by the seller. The seller pays 2.5% of the gross sale value as a final tax, before the land deed official (Pejabat Pembuat Akta Tanah, or PPAT) signs the deed (PP 34/2016, Articles 2(1)(a) and 3(1)).
• Value added tax (VAT) on a new home. A VAT-registered developer charges it on a new home, because a building counts as goods for VAT (VAT Law, Article 1(2)).
• Land and building tax each year. PBB (Pajak Bumi dan Bangunan) is capped at 0.5% of the assessed value, at the rate the region sets (UU 1/2022, Article 41).

For 2026, the government bears the VAT on the first IDR 2 billion of a new, ready-to-live-in home priced at up to IDR 5 billion, for individuals buying one home each. A foreigner with an Indonesian tax number (Nomor Pokok Wajib Pajak, or NPWP) who meets the ownership rules qualifies (PMK 90/2025, a Minister of Finance regulation, Articles 3 to 7). In Bali and Jakarta a foreigner’s house must cost at least IDR 5 billion, the same as that ceiling, so there the relief is more likely to apply to an apartment.

Tax on rent and short stays

The law taxes rent from land or buildings at 10% of the gross rent, as a final tax, so the landlord’s costs do not reduce it (PP 34/2017, Articles 2(1) and 4(1)). When a company rents premises from a landlord in Indonesia, it withholds that 10% from the rent and pays it to the tax office (Article 3). How that fits with the other withholding a company does is in withholding tax on services, and MAM’s corporate tax work covers that withholding every month.

For a company using the premises in its business, the rent is a cost it deducts from its income, and rent paid for several years in advance is spread across the years it covers (Income Tax Law, Articles 6(1) and 9(2), as amended by UU 7/2021).

Short stays for guests are accommodation, not rent. The 10% does not apply to them (PP 34/2017, Article 2(3)). The income is ordinary business income, and the region charges its tax on hotel services (Pajak Barang dan Jasa Tertentu, or PBJT) of up to 10%, a tax that names villas (UU 1/2022, Articles 53(1) and 58(1)). The wider picture is in the tax system in Indonesia.

Questions people ask

What this means for you

A home to live in is yours to buy directly, provided it meets the minimum price for its province, and the purchase deed is signed before a PPAT. Property that earns income belongs in a company, where its rent, its costs and its tax sit together.