PT PMA, leasehold or Hak Pakai: how foreigners can legally own property in Lombok

Most guides compare the three structures in the abstract. This one starts from the buyer. We look at three typical profiles we meet in South Lombok, then at costs, resale and inheritance, and finish with the mistakes that cost overseas buyers the most. Figures are in rupiah with US dollar equivalents at about IDR 18,000 to the dollar, the rate in mid-October 2026 (Databoks).

The one rule that does not bend

Indonesia's Basic Agrarian Law of 1960 reserves freehold title, Hak Milik, for Indonesian citizens. Article 26(2) goes further: any transfer that puts freehold directly or indirectly into foreign hands is void, and the land falls to the state. The Investment Law (Law 25/2007, Article 33) separately bans agreements in which someone holds company shares on behalf of a foreigner.

That is why "nominee" deals, where an Indonesian friend, driver or partner holds the certificate for you, are not a fourth route. They are a way of losing your money slowly. Everything below is a structure the law recognises and a court will enforce.

Three buyers, three answers

Profile A — the holiday villa that pays for itself

A couple from Perth wants a two-bedroom villa near Selong Belanak. They will use it for six weeks a year and let it the rest of the time through a manager. They do not plan to move to Indonesia.

Best fit: leasehold (Hak Sewa). They lease a plot from its Indonesian owner for, typically, 25 to 30 years, build or buy the villa on it and let it out. A lease needs no residence permit and no company, and the entry cost is the lowest of the three routes.

What makes or breaks a lease is the contract, not the land:

• Extension terms fixed now. Agree the price, or a formula, for the next 20 to 30 years in the original deed. A lease with "extension to be negotiated" loses value every year.
• Notarial deed. Have the lease drawn up as a notarial deed and the owner's certificate checked at the land office (BPN) before you pay.
• Right to assign and sublet. You need both to rent the villa out and, later, to sell what remains of the lease.
• Heirs named. The lease should pass to your heirs if you die during the term.
• Protection if the land is sold. Under the Indonesian Civil Code (Article 1576), a sale does not end an existing lease unless the lease says it does. Make sure yours does not.

One detail that catches buyers out: lease payments are subject to a final 10% income tax on the gross amount, under Government Regulation 34/2017 (DDTC News, August 2026). The tax is the landowner's, but agree in writing whether the price you are quoted includes it.

Profile B — several villas, run as a business

An investor from Singapore wants to build four villas on one hillside above Kuta, employ staff and take the profit out as dividends.

Best fit: PT PMA. The investor sets up an Indonesian limited company with foreign shareholders. The company, not the investor, holds the land on a right-to-build title, Hak Guna Bangunan (HGB). Under Government Regulation 18/2021, HGB runs for up to 30 years, can be extended by 20 and then renewed for another 30.

A PT PMA is the only route that lets a foreigner run a rental business openly: it can hold business licences, sign staff contracts and invoice guests. It also comes with obligations:

• Capital. Since Minister of Investment Regulation 5/2025, the minimum paid-up capital for most PT PMAs is IDR 2.5 billion (about US$139,000), down from IDR 10 billion. The planned investment per project must still exceed IDR 10 billion, about US$556,000 (ASEAN Briefing, October 2025).
• Business line. Each activity has a code (KBLI) with its own rules on foreign ownership and licensing. Check that villa accommodation is open to your company at the scale you plan before you incorporate.
• Running costs. Monthly tax filings, quarterly investment reports (LKPM), an annual corporate tax return and bookkeeping. Corporate income tax is 22%. Budget for an accountant from year one.

For one villa, this is usually more structure than you need. For a portfolio, it is usually the only sound option.

Profile C — the part-time resident

A retired couple from Manchester plans to spend seven months a year in Lombok on a retirement KITAS and wants a house in their own names.

Best fit: Hak Pakai. A foreigner who holds an Indonesian residence permit (KITAS or KITAP) can own a house, and the land under it, on a right-of-use title registered in their own name. The term follows the same pattern as HGB: 30 years, extendable by 20 and renewable by 30.

The conditions are specific (Bisnis.com summary of ATR/BPN Regulation 18/2021):

• One house per person or family, on a plot of up to 2,000 m². More needs ministerial approval.
• A minimum price. In West Nusa Tenggara (NTB), which includes Lombok, a house must cost at least IDR 3 billion, about US$167,000 (Decree of the Minister of ATR/BPN 1241/2022, via Hukumonline). Bali's threshold is IDR 5 billion.
• A valid residence permit, both to buy and to extend the title. Heirs can inherit, but must hold a residence permit themselves to keep the title.

Hak Pakai is the closest a foreigner gets to owning a home outright. It is less suited to a rental business, and it ties your title to your visa status.

The three routes side by side

What the purchase itself costs

Whichever route you choose, budget for these on top of the price:

• Notary/PPAT fees. Land deeds are prepared by a PPAT, a notary licensed for land. Fees are capped at 1% of the transaction value, with lower caps on larger deals (ATR/BPN Regulation 33/2021, via Hukumonline).
• Buyer's acquisition duty (BPHTB). Up to 5% of the transaction value above a small regional exemption, on title transfers such as HGB or Hak Pakai (Law 1/2022, summarised by vOffice).
• Seller's tax. A final 2.5% on the gross sale price (Government Regulation 34/2016). It is the seller's, but confirm it is included in the price.
• Due diligence. A land office (BPN) check of the certificate, zoning (the regional spatial plan), access and boundaries. Ask for a written report.

For a lease, BPHTB does not apply in the same way, but the 10% tax on the lease payment does. For a PT PMA, add incorporation and the first year's accounting.

Selling up and passing it on

This is where the three routes differ most, and where buyers think least.

A lease is sold by assigning the remaining years to a new tenant, which the original deed must allow. Its value falls as the term runs down, so a 30-year lease with a fixed-price extension resells far better than a 25-year lease with none. It passes to heirs if the deed says so.

Hak Pakai can be sold to anyone eligible to hold it: an Indonesian citizen, or another foreigner with a residence permit who meets the minimum price. If you, or your heirs, no longer hold a residence permit, the property has to be transferred to an eligible person within a set period. Plan for that before you buy.

A PT PMA can sell the land itself, or its shareholders can sell their shares, which leaves the title untouched. Share sales are often simpler for villas that are already licensed and trading. Heirs inherit shares, not land.

Five mistakes we see overseas buyers make

1. Paying a deposit before seeing the certificate. Ask for a copy of the certificate and have the notary check it at the land office first.
2. Buying a lease without fixed extension terms. It costs nothing to negotiate at signing and a great deal later.
3. Using a nominee "because everyone does". Many have, and some have lost everything when the nominee died, divorced or borrowed against the land.
4. Forming a PT PMA for one villa. The running costs and reporting rarely make sense below a few units.
5. Ignoring zoning. Some coastal and hillside land in South Lombok is zoned for agriculture or protection. A building permit (PBG) depends on it.

Not sure which route fits? Our team walks you through it, with your own plans and numbers: message us on WhatsApp.

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This article is general information, not legal or tax advice. Have every transaction checked by a PPAT notary and an Indonesian lawyer. See our investment disclaimer.