Some lesser-known traps in Indonesian property law

Hi all,

I've been researching Indonesian property regulations pretty deeply and wanted to share some things that surprised me — stuff that goes beyond the usual "foreigners can't own freehold" basics.

Your leasehold isn't registered anywhere official

A lot of people assume their Hak Sewa (leasehold) is registered at BPN like other land rights. It isn't. Hak Sewa is a private notarial contract between you and the landowner. Hak Pakai and HGB get registered at the National Land Agency with a certificate — Hak Sewa doesn't. Your protection is only as strong as that notary deed. This matters if the landowner dies, sells the underlying freehold, or simply disputes the terms later.

Marrying an Indonesian citizen can affect your property rights

Under UU 1/1974 (Marriage Law), marriage creates joint marital property by default. Since Hak Milik (freehold) can only be held by Indonesian citizens, an Indonesian spouse who holds freehold land could lose that title if the marriage creates a joint property claim with a foreign spouse. This is why prenuptial agreements (pisah harta) are strongly recommended before any property transaction — not after.

Your lease depreciates every single year and nobody prices this in

If you buy a 25-year leasehold villa for $400K with 20 years remaining, you've effectively paid $20K per year of lease. At year 15 remaining, that same villa is worth significantly less even if the physical property is identical. Most agents price leaseholds based on comparable villa sales without adjusting for remaining term. If you're buying a lease with under 15 years left, the extension clause in the contract is essentially what you're paying for — and if that clause says "price to be negotiated at a later date" you have almost nothing.

The PT PMA minimum investment isn't what most people think

You'll hear "$700K" or "Rp 10 billion" thrown around as the PT PMA minimum. That was accurate under the old rules, but Permen Investasi/BKPM 5/2025 changed the framework. The paid-up capital requirement is now Rp 2.5 billion, not Rp 10 billion. The total investment plan is still Rp 10 billion, but that includes projected operational costs over time — it's not all cash upfront. This distinction matters enormously for your actual setup costs, but most agents still quote the old numbers.

Your visa expiring doesn't automatically void your property rights — but it's complicated

A common fear is that losing your KITAS means losing your Hak Pakai. The regulation (PP 103/2015, Article 8) says you have 12 months to either get a new visa, transfer the title, or let it revert to state land. But Hak Sewa (leasehold) is contractual and independent of visa status — you can hold a lease on a tourist visa. Mixing these up leads to either unnecessary panic or false security depending on your ownership structure.

Still learning new things every time I read through these regulations. Happy to discuss or point to specific articles if any of this is relevant to your situation.