5 Things You Need To Know When Buying A House In Indonesia

Buying property in Bali, Indonesia may seem quite the feat, what with confusing property laws, licenses, titles and bureaucracy that one would have to familiarize oneself with. This is especially true for foreigners but if you think buying property in Indonesia is hard now, it is actually a lot simpler than it was in the 1990s!

Back then, foreigners weren’t allowed to own property at all except buildings with a Strata Title. But then things improved in 2010 and 2015 when foreigners were allowed a long-term lease on a property of up to 70 years.

Today, foreigners can “own” Bali properties with 30-year lease agreements with 20-year extensions. You can also “own” landed houses through long-term leases.

Let’s talk about the types of Land Titles that exist in Indonesia.

The “freehold” title or “Hak Milik” means that only Indonesian citizens can hold this title. If you’re a foreigner and you’re tempted to hold a freehold land, it will automatically be deemed void, and therefore, the land will automatically belong to the government. 

A secondary title, known as “Right of Use” or “Hak Pakai” is the best option for a foreigner. With a built-in extension of 25 years, the title comes with renewal after 20 years with only a small tax implication. Restrictions include the size of land and property and you must hold a valid permit to stay in Indonesia such as a KITAP or a KITAS.

The third title is a commercial title; “Hak Guna Bangunan”, which means “right to build”. This title is compulsory for both foreign and Indonesian companies buying, selling, or managing villas for commercial purposes.

Paperwork Purchase Property

Property Transactions and Paperwork

Once you’ve found your ideal property, bear in mind that in accordance with Indonesian law, real estate transactions must be transparent and paid in full. The legal transaction must be carried out under the supervision of an authorized officer. The law also states that the property must be paid in full. This means that the transaction will fall through if you cannot complete the payment.

Next, you’ll need to conduct a Property Title Background Check. To do this, you’ll need the original certificate of ownership. The legal status of the property cannot be confirmed or verified without the original document.

Background checks are extremely important – it will give you information on any disputes, outstanding payments, the current status of the Bali properties, as well as its title.

Original Documents

Remember to obtain copies of the following from the seller:

  • Copy of Kartu Tanda Penduduk (KTP) of the seller and his/her spouse.
  • Family card (so called Kartu Keluarga/KK).
  • Marriage Certificate (or Death Certificate if the spouse has passed away).
  • Original certificate of land ownership.
  • PBB tax payment, called SPPT PBB.
  • NPWP, or the seller’s tax number.


Now, all that’s left to prepare is the Buyer’s information and documents, and the Sale and Purchase Agreement, Title of Ownership and Transfer of Title. For more information on all of this and more, feel free to contact the team at Bali Property Direct now to get started!

Ciao Calo! Buy and rent directly from owners

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