Indonesia has four land titles that matter to a foreign buyer: Hak Milik (freehold), Hak Guna Bangunan (HGB, the right to build), Hak Pakai (right of use) and Hak Sewa (leasehold). Freehold is reserved for Indonesian citizens, so the realistic options for a foreign buyer are a lease, Hak Pakai if you are legally resident here, or HGB held through a PT PMA — an Indonesian company with foreign shareholders.
Below: what each title is, who may hold it, how long it lasts and how the four compare — across Indonesia, not just one island. For who may buy, the checks before you sign and the purchase process, see our legal guide for foreign buyers in Sumba.
The system in one paragraph
All land here sits under the Basic Agrarian Law No. 5 of 1960, which does not hand over land the way an English or American deed does. It grants rights over land, and those rights differ in strength and duration. Registered rights are recorded at BPN (Badan Pertanahan Nasional, the National Land Agency) and appear on a certificate; only a PPAT (Pejabat Pembuat Akta Tanah, the Land Deed Official) may draw up a land-transfer deed. A right that is not registered — a lease, for example — is an agreement between two parties, not an entry in the national record. That single distinction explains most of what follows.
Hak Milik — freehold
Hak Milik is Indonesian freehold, and the 1960 law reserves it for Indonesian citizens.
Who may hold it: Indonesian citizens. Not foreigners — not in Bali, not in Jakarta, not in Sumba, nowhere in the country. The restriction does not lift with long residence, with marriage, or with the size of the money involved.
That also answers the workaround people ask about: a foreigner cannot hold Hak Milik, and buying in an Indonesian citizen’s name is not a lawful way around it. The legal guide for foreign buyers covers why. For this article, treat freehold as closed.
Hak Guna Bangunan (HGB) — the right to build
HGB is a registered right to construct and own buildings on land you do not own outright. A PT PMA can hold it, which is what makes it relevant to a foreign buyer with something to build.
Duration: 30 years, extendable by 20, then renewable by 30.
Typical use: villas, guest houses, resorts. If your plan involves building, renting out or holding more than one plot, HGB is the title built for it.
Strength: high. It is on the national record, so it can be checked at BPN rather than taken on trust. Its limit is the calendar: extension and renewal are steps someone has to take at the right time, not things that happen by themselves.
Hak Pakai — the right of use
Hak Pakai is a registered title available to foreigners who are legally resident in Indonesia — a certificate in your own name rather than a contract with a landowner, which makes it a different proposition from a lease.
Duration: historically up to around 80 years in total, starting with a grant of around 30 years that can then be extended. The terms have been revised more than once, so treat any figure you read online, including this one, as a starting point and confirm the current rules with a notary.
Typical use: a home for a foreigner who actually lives here. It is residential in character rather than a development vehicle. A PT PMA can also hold Hak Pakai.
The catch: eligibility rests on legal residency, so ask your notary what happens to the title if your permit status changes.
Hak Sewa — leasehold
Hak Sewa is a contractual right to use land for an agreed period, typically 25 to 30 years and extendable. The key point is what it is not: a lease is an agreement with a landowner, not a title registered in your name at BPN. Who may enter into one, and on what terms, is worth confirming with a notary before you rely on it.
It is the easiest door to walk through and the weakest room to stand in. You are buying time, not land, and a lease is only as strong as its document and the person on the other side of it. So negotiate the extension into the original contract: how long, at what price or by what formula, and who signs if the landowner dies. Renegotiating near the end of the term, with your house already standing on the land, is not really a negotiation.
PT PMA — a structure, not a title
A PT PMA is an Indonesian limited company with foreign shareholders. It is not a land title; it is the entity that holds one. The company holds the HGB or the Hak Pakai, and you hold the company.
It fits development, commercial use, rentals and holding several properties. It fits a single holiday house poorly: it is a real company, with setup costs, a minimum capital requirement and ongoing accounting and reporting duties that continue whether or not the property earns anything.
The four titles side by side
| Title | Who can hold it | Duration | Typical use | Notes |
|---|---|---|---|---|
| Hak Milik (freehold) | Indonesian citizens only | Confirm details with an Indonesian notary | Land held by Indonesian citizens | Registered, but closed to foreign buyers everywhere in Indonesia |
| HGB (right to build) | A PT PMA can hold it | 30 years, extendable by 20, renewable by 30 | Villas, rentals, resorts, development | Strong — registered, but time-limited |
| Hak Pakai (right of use) | Foreigners legally resident in Indonesia; a PT PMA can also hold it | Historically up to ≈ 80 years total (first grant ≈ 30, extendable); terms revised over time — confirm current rules | A home for a resident foreigner | Strong for personal use — registered, tied to residency |
| Hak Sewa (leasehold) | A contract with the landowner — confirm eligibility with a notary | Typically 25–30 years, extendable | Holiday home, single plot, testing an area | Weakest — a contract, not a registered title |
Registered title or private contract
If you remember one line from this article, make it this one: a registered title exists in the national record, and a lease exists in a drawer. Both can work. They fail in completely different ways.
With a registered title — HGB or Hak Pakai — there is a certificate at BPN naming a holder, a plot and an end date, and any transfer runs through a PPAT deed rather than a handshake. Read three things on it: which title it actually is, whose name is on it, and when the term ends. A certificate that says HGB when you were told Hak Milik is telling you something useful before you spend money.
With a lease there is no certificate to check, so the document is the asset. That puts the weight on drafting: the term, the extension mechanism, what happens if the landowner dies or sells, what you may build, and what becomes of that building at the end. A weak lease can be signed in front of a notary and still leave you exposed — the notary confirms what you agreed, and does not make it a better deal.
One more layer sits underneath all of this: adat, or customary land, held under traditional community law and not always fully reflected on the national register, which can leave overlapping or hidden claims that no title column shows. That is a due-diligence question rather than a titles question, and we cover the checks in the legal guide.
Choosing, in practice
Pick the structure from the plan, not the other way round. Decide what you will do with the land and for how long, and the shortlist narrows: a registered title where you need provability, a lease where you want obligations light, a company only where the property is meant to earn. The wrong choice is rarely fatal, but it is expensive to unwind. Which route is open to you personally depends on your residency and your purpose — that is what the legal guide is for.
Frequently asked questions
How long does HGB last?
Thirty years, extendable by 20 and then renewable by 30. Extension and renewal are applications that have to be made at the right time, so treat the dates on the certificate as diary entries, not background detail.
What is the difference between leasehold and Hak Pakai?
Hak Pakai is a registered title in your own name at the National Land Agency; leasehold is a contract with a landowner. Hak Pakai is the stronger position, but it requires legal residency in Indonesia. A lease does not.
Who registers land titles in Indonesia?
BPN, the National Land Agency, registers titles and issues the certificate. A PPAT, the Land Deed Official, is the only official who may draw up a land-transfer deed. A lease is not a registered title, so it will not appear in the BPN record the way HGB or Hak Pakai does.
Do I need a PT PMA to buy land in Indonesia?
Not for a lease, and not for Hak Pakai if you are a legal resident. You need one for HGB — to build, rent out, operate commercially or hold several properties. Set one up only when the plan justifies the minimum capital and the ongoing accounting and reporting duties.
What taxes and fees apply when buying?
They depend on the transaction: title type, structure, value and the parties involved, so any single percentage quoted online is unreliable. Ask for a written breakdown for your own purchase before you sign anything.
This article is general information, not legal or tax advice. Indonesian land rules are revised from time to time, and the right structure depends on your residency, your plans and the parcel itself. Confirm current terms with a qualified Indonesian notary or PPAT before committing.
If you want a title checked before going further, or you are weighing a lease against a company structure, get in touch. You can also browse the current land listings or read the Sumba real estate FAQ.