This question comes from two directions. Some foreign nationals work or have family in Kalimantan and want a home of their own. Some Indonesians married to foreigners aren’t sure whether they can buy a house in their own name.

The short answer: foreigners can own a home in Indonesia, but not with a Sertifikat Hak Milik (SHM, the freehold title reserved for Indonesian citizens). The right is different, the conditions are stricter, and there is one shortcut you must avoid.

This guide is for foreign buyers, mixed-nationality couples, and sellers approached by a foreign buyer. The rules can be updated, so confirm the current details with a PPAT (Pejabat Pembuat Akta Tanah, the official who draws up land deeds) before you pay anything.

SHM is for Indonesian citizens only

The Basic Agrarian Law (UU No. 5 Tahun 1960, known as UUPA) says only Indonesian citizens (WNI) can hold Hak Milik. That holds even if a foreign buyer pays cash or has lived in Indonesia for years.

So a foreigner (WNA, warga negara asing) can’t buy a house and have its SHM transferred into their own name. If the house you want has an SHM, the right has to be changed into one a foreigner may hold. The PPAT and the Kantor Pertanahan (the district land office) will explain how.

What a foreigner can own

Under PP No. 18 Tahun 2021, a foreigner who holds immigration documents can own:

  • A landed house on Hak Pakai. An ordinary house on its own land, held under a right called Hak Pakai (right of use).
  • A strata unit (satuan rumah susun), such as an apartment, in a building on land held under Hak Pakai or Hak Guna Bangunan (HGB, the right to build).

Hak Pakai runs for a set term. It is granted for up to 30 years, can be extended for up to 20 years, and can then be renewed for up to 30 years. The end date is printed on the certificate.

There are also options that fall short of ownership. You can rent under a written lease, or hold a Hak Pakai granted by the landowner through a PPAT deed. For foreigners working in Kalimantan for a few years, renting is often simpler than buying.

Conditions and limits

  • Valid immigration documents. The PPAT will check which documents the buyer holds and whether they meet the rules.
  • A minimum price. Kementerian ATR/BPN (the national land ministry) sets a minimum price for each region for homes that foreigners may own. A home below that price can’t be bought by a foreigner. The figures differ by region and can be updated, so ask a PPAT or the land office for the current one.
  • Other limits. The rules can also limit other things, such as land area and the number of homes. Ask the PPAT to explain the rules in force when you buy.
  • The same procedure. A PPAT makes the deed, taxes are paid, and the transfer is registered at the land office.
  • The same taxes. The seller pays a final income tax (PPh final) of 2.5% of the gross value, and the buyer pays BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan, the acquisition duty) under the local regulation.

Ask the PPAT, too, what happens to your Hak Pakai if you stop meeting the conditions one day, for example because you no longer live in Indonesia. Understand the answer before you buy, not after.

For sellers, a sale to a foreign buyer usually takes longer because the right has to be changed. Bring in a PPAT early, and don’t take part in a nominee scheme, because a seller can be drawn into the dispute too.

Inheritance and mixed marriages

A foreigner who inherits Hak Milik

Sometimes a foreigner becomes an heir to SHM land, for example a child who has taken another citizenship. Under the UUPA, a foreigner who acquires Hak Milik through inheritance, or through the mixing of property in a marriage, must release it within one year. If it isn’t released, the right ends by law and the land passes to the state.

It can be released, for example, by selling or transferring the right to an Indonesian citizen. Ask a PPAT which option suits your family, and don’t wait until the deadline is close.

An Indonesian married to a foreigner

Under UU No. 1 Tahun 1974 on marriage, property acquired during a marriage is harta bersama (marital property). If an Indonesian marries a foreigner without a marriage agreement separating their property, a house bought during the marriage is co-owned by the foreign spouse. As a result, the Indonesian spouse can’t hold SHM for that house.

The way out is a marriage agreement (perjanjian perkawinan) that separates the couple’s property. Since Constitutional Court Decision No. 69/PUU-XIII/2015, such an agreement can be made during the marriage, not only before the wedding. It is made before a notary, recorded as the rules require, and may not harm third parties such as creditors.

Marital property is covered in more depth in our guide to marital property in home sales.

Why nominee arrangements are dangerous

The shortcut sometimes offered is a nominee arrangement, known locally as pinjam nama, literally borrowing a name. The house is bought with the foreigner’s money but put in an Indonesian’s name, with a side agreement saying the foreigner is the real owner.

Under the UUPA, any act intended to pass Hak Milik to a foreigner, directly or indirectly, is void by law. The land passes to the state, and payments already made cannot be reclaimed.

In practice, the risks come from every direction:

  • The nominee dies, and the house becomes part of their family’s inheritance.
  • The nominee divorces, and the house is treated as marital property shared with their spouse.
  • The nominee falls into debt, and creditors seize the house.
  • The nominee sells or mortgages the house without the foreigner knowing.

In each case, the foreigner has no solid legal footing. A side agreement that goes against the UUPA won’t help.

Buying through a company

Indonesian companies, including foreign investment companies (PT PMA), can’t hold Hak Milik either. A company can hold rights such as HGB for its business activities, with the right business licences.

That route suits business property, such as a warehouse or an office. It is not a shortcut to owning a private home. Talk to a notary and a legal adviser before setting up a company just to buy property.

Safe steps for a foreign buyer

  1. Make sure your immigration documents qualify, and ask for the current minimum price for the region.
  2. Choose a PPAT in the area where the property lies early on, before paying any deposit.
  3. Ask the PPAT to check the certificate and explain how the right will be changed if the house is on SHM.
  4. If you are married to an Indonesian, talk to a notary about a marriage agreement first.
  5. Pay by bank transfer to the account of the owner named on the certificate, and keep every receipt.
  6. Turn down any nominee offer, however convincing the person making it.
  7. Keep the deed, the certificate and the tax receipts somewhere safe, and note the date your Hak Pakai ends.

The PPAT’s role at each step is covered in our guide to notaries and PPATs, and the types of title in our guide on SHM, HGB and AJB.

If you’d like to see homes on the market, start from the Vorneo property catalogue and ask about the certificate status before you make an offer.