That is the whole answer in a paragraph. The rest of this guide explains each route, how a purchase actually works step by step, what it costs, and the one due-diligence issue that catches out more foreign buyers in Sumba than any other.

Why foreigners cannot own freehold

Under the Basic Agrarian Law No. 5 of 1960, the strongest form of ownership — Hak Milik, meaning full and permanent freehold — is reserved for Indonesian citizens. This is national law. It applies in Sumba exactly as it applies in Bali or Jakarta, and there is no tourist-zone exception.

This matters in practice. A seller may tell you a plot is “freehold, no problem.” Even where that is true for them, a foreigner cannot legally be registered as the Hak Milik holder. Any arrangement that tries to work around this puts your money at risk with no legal protection. The good news is that Indonesia provides structures built specifically for foreign buyers — you simply have to use the right one.

The three legal routes, compared

1. Leasehold (Hak Sewa)

You pay for the right to use a piece of land for a fixed number of years, set out in a contract. You do not own the land; you hold a long-term right to use it. Terms typically run 25–30 years and can be extended by agreement.

It is the simplest and lowest-cost option, and it needs no company and no Indonesian residency — which makes it a sensible first step. The trade-off is that you hold a contract rather than a registered title, so your position depends heavily on how the agreement is drafted and on the landowner honouring the extension. A vague or poorly drafted lease is one of the most common ways foreign buyers get hurt; the extension terms in particular must be precise.

2. Hak Pakai (Right of Use)

A registered title, recorded in your own name, that allows a foreigner who legally lives in Indonesia to use land or a home. Historically it has run up to around 80 years in total — an initial grant of roughly 30 years, then extendable.

It is stronger than a bare lease because it is a real registered title. The limits: it requires legal residency in Indonesia, and it is intended for residential use rather than running a business. The terms have been revised over the years, so confirm the current maximum with your notary and the land office rather than relying on any figure you read online, including this one.

3. PT PMA holding HGB

You set up an Indonesian limited company that foreign investors are permitted to own — a PT PMA, or foreign-investment company. The company, not you personally, holds the land title. Most often that title is HGB (Hak Guna Bangunan, the “Right to Build”), granted for 30 years, extendable by a further 20 and renewable for another 30. A PT PMA can also hold Hak Pakai.

This is the strongest structure available to a foreigner. It lets you legally operate a business and earn rental income, hold more than one property, and sell the company with its assets later. The costs are real too: setup fees, minimum capital requirements, and ongoing accounting and reporting obligations. For a single small holiday plot it is usually more than you need.

Quick guide: holiday home, keep it simple → leasehold. You live in Indonesia and want a home in your own name → Hak Pakai. You are investing, developing or renting out → PT PMA.

How a purchase actually works, step by step

1. Search and shortlist. Identify plots that match your budget, location and intended use.
2. Reserve. Sign a letter of intent and pay a holding deposit — ideally into an escrow or lawyer’s account rather than directly to the seller.
3. Due diligence. Before any further payment, verify the land at the BPN (Badan Pertanahan Nasional, the National Land Agency): certificate authenticity, who actually owns it, the exact boundaries, zoning, any debts or claims, and its customary-land status.
4. Choose and draft the structure. Decide between leasehold, Hak Pakai or PT PMA, and have the agreement drafted around that choice.
5. Notary / PPAT. The transfer is prepared and legalised by a PPAT (Pejabat Pembuat Akta Tanah, the Land Deed Official) — the only official legally permitted to draw up a land-transfer deed in Indonesia. Use an independent one, not only the seller’s.
6. Payment. Pay by traceable bank transfer, released against agreed milestones. Never in untraceable cash.
7. Registration. The deed is registered at the BPN and the certificate is issued or updated in the correct name or structure. Only now is the purchase genuinely complete.

Costs and taxes

Beyond the purchase price, budget for transfer tax, notary and PPAT fees, due-diligence and verification costs, and — if you use one — PT PMA setup and its annual accounting. Rates and fees depend on the specific transaction and structure, so we do not publish a single figure that would be wrong for most buyers. Contact us and we will walk you through the costs for the actual plot and route you are considering.

For current land values by area, see our Sumba Land Price Report.

Due diligence in Sumba — read this before you pay anything

This is where Sumba differs from more developed markets such as Bali, and it is the most important section on this page.

In Sumba, many land certificates are outdated, and a meaningful share of parcels carry hidden problems: unclear or disputed boundaries, overlapping ownership claims, or adat rights. Adat means customary land held under traditional community law — land a clan or village holds rights to by long-standing custom, which may not be fully reflected on the national register. A single family can sell you a plot that the wider community also has a legitimate claim over.

The dangerous part is the timing. These issues routinely stay invisible during a viewing and only surface when you try to build — when a neighbour disputes a boundary or the community asserts a claim, long after your money is spent.

Protecting yourself means three concrete checks, all completed before payment:

• A verified certificate check at the BPN, confirming the certificate is genuine, current, and matches the seller.
• A physical boundary verification on the ground, so the plot you pay for is the plot you actually receive.
• An adat verification with the local community, confirming there are no competing customary claims.

This is exactly the verification work Sumba Estate carries out for buyers. In Sumba, the certificate on the table is the start of due diligence, not the end of it.

The nominee trap

• The side agreement is legally unenforceable. In law, the Indonesian named on the certificate is the owner, full stop.
• If that person changes their mind, runs into debt, or passes away, their creditors or heirs can take the land. You have no standing to stop it.
• Because the arrangement is itself illegal, the courts will not rescue you.

No amount of trust in the individual changes any of this. If an agent, lawyer or “friend who knows the system” proposes a nominee, treat it as a red flag and walk away. Use one of the three legal routes instead.

Common mistakes foreign buyers make

• Accepting a verbal “it’s freehold, no problem” with nothing in writing.
• Using a nominee to try to hold Hak Milik.
• Skipping the BPN certificate, boundary or adat checks.
• Paying in cash or by untraceable means.
• Relying only on the seller’s notary instead of an independent PPAT.
• Choosing the wrong structure — for example a bare lease when a PT PMA was needed to run a rental business.
• Signing a leasehold with vague or missing extension terms.
• Forgetting to budget for taxes, notary fees and verification.

Frequently asked questions

Can a foreigner own land outright in Sumba?

No. Freehold ownership (Hak Milik) is reserved for Indonesian citizens under the Basic Agrarian Law No. 5 of 1960. Foreigners buy legally through a leasehold, a Hak Pakai title, or a PT PMA company.

What is the safest route?

It depends on your goal. A PT PMA suits investment and development, Hak Pakai suits a resident who wants a home in their own name, and a leasehold suits a simple holiday home. All three are legal and safe when set up correctly and backed by proper due diligence.

How long can a foreigner hold land in Sumba?

A leasehold typically runs 25–30 years and is extendable. Hak Pakai can reach up to around 80 years in total. A PT PMA holding HGB gets 30 years, extendable by 20 and renewable by another 30.

Is a nominee arrangement safe if I completely trust the person?

No. Nominee arrangements are illegal under Government Regulation No. 18/2021 and the side agreement is unenforceable. You can lose the entire investment, because the Indonesian named on the certificate is the legal owner regardless of any private deal.

Do I need to live in Indonesia to buy land in Sumba?

For a Hak Pakai title, yes — it requires legal residency. A leasehold and a PT PMA do not require you to reside in the country.

Can I rent the property out?

Yes, through a PT PMA, which can legally operate a rental or hospitality business. A personal leasehold or Hak Pakai is intended for private use rather than a commercial rental operation.

Buy in Sumba with confidence

A great plot is only a great investment if the title behind it is clean. Before you pay for any land in Sumba, have the certificate, the boundaries and the adat status independently verified. Talk to our team before you buy, or browse our current listings.

This article is general information, not legal advice. Property laws, rates and fees change, and every plot is different — always confirm your specific situation with a qualified Indonesian notary or lawyer before committing to a purchase.