General information, not legal advice. This guide sets out the general rules as I understand them. It has not yet been reviewed by an Indonesian notary, and the rules change. Before you sign or pay anything, confirm every point with your own independent notary (PPAT) or lawyer.
The short answer
Indonesian law reserves full freehold ownership of land, called Hak Milik, for Indonesian citizens. A foreigner cannot hold it, in Lombok or anywhere else in the country.
That doesn't stop foreigners from buying villas. It means the purchase is structured differently. Most overseas buyers in Lombok hold their villa on a long leasehold, and some use a right-of-use title or a foreign-owned company instead.
The three legal routes
| Route | How it works | Best for |
|---|---|---|
| Leasehold (Hak Sewa) | You lease the land and villa from the Indonesian owner for a fixed term, commonly 25 to 30 years, often with an extension option. Signed before a notary, in your own name. No residency needed. | Most holiday-home and rental-villa buyers |
| Right of use (Hak Pakai) | A registered title giving a foreigner the right to use land and a house, renewable over time. Generally tied to holding an Indonesian residence permit and to minimum property values set by region. | People living in Indonesia |
| Company (PT PMA) | A foreign-owned Indonesian company holds a building title (Hak Guna Bangunan). Needs capital, licences, an accountant and annual reporting. | Running a hospitality business or several properties |
Leasehold
Leasehold is the standard structure for villas sold to overseas buyers in Lombok and Bali. You pay once for a long lease and hold the villa for the term, with the right to live in it, rent it out (if the contract allows) and sell the remaining lease. The details of the lease matter enormously; read the leasehold guide before you sign one.
Right of use (Hak Pakai)
Hak Pakai is a registered land right that foreigners can hold, usually when they live in Indonesia on a residence permit (see visas for property owners). Regulations introduced from 2021 broadened access, with minimum purchase prices that vary by province and property type. Because these rules have changed recently and are still being applied unevenly, confirm with your notary what applies to you on the day you buy.
Foreign-owned company (PT PMA)
A PT PMA is an Indonesian company with foreign shareholders. It can hold a building right (HGB) over land for a long renewable term and run a licensed rental business. It is the most robust structure for serious investors, but it carries real costs: minimum capital, licences, tax filings and ongoing compliance. It rarely makes sense for a single holiday villa.
The arrangement to avoid: nominees
Never put land in an Indonesian friend's name with a side agreement giving you control. Indonesian law treats these nominee arrangements as void. If the nominee dies, sells, borrows against the land or simply changes their mind, you may have no legal claim at all.
If anyone offers you "freehold" as a foreigner, ask exactly whose name will be on the land certificate. If the answer is anyone other than you or your own company, walk away or take independent legal advice first.
Which route suits you?
- Holiday home or rental investment, living abroad: leasehold, held in your name, with strong extension and transfer clauses.
- Moving to Lombok on a residence permit: compare a leasehold with Hak Pakai on the same property.
- Building a hospitality business: talk to a lawyer about a PT PMA before buying land.
Protecting yourself
- Use an independent notary, ideally one you choose, and ask them to check the land certificate at the land office (BPN).
- Get a bilingual contract. Indonesian law requires an Indonesian-language version; agree which version prevails.
- Pay only into a company or notary account, never a personal one.
- Keep receipts for every payment and copies of every signed document.
The off-plan guide has a full due-diligence checklist you can use with any developer.
This guide is general information, not legal advice. Indonesian property law changes and depends on your circumstances.