Last Updated on March 9, 2025 by Yasmina
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Lombok is quickly becoming one of Indonesia’s top property investment hotspots, offering stunning landscapes, lower property prices than Bali, and high rental yields. But if you’re a foreign investor, you might be wondering:
Can foreigners buy property in Lombok?
The short answer: Yes—but not freehold. However, there are secure and legal ways for foreigners to invest in Lombok’s property market through leasehold agreements, PT PMA companies, and other ownership structures.
This ultimate guide will walk you through everything you need to know about buying property in Lombok as a foreigner, from legal options to investment tips and step-by-step processes.
Understanding Indonesian Land Ownership Laws
The Legal Framework
Indonesia has strict land ownership laws, meaning foreigners cannot directly own freehold land (Hak Milik). However, foreigners can still legally invest in property through other structures:
✔ Leasehold (Hak Sewa) – Long-term property lease, up to 80 years
✔ Right to Use (Hak Pakai) – Own a villa or apartment for personal use
✔ PT PMA (Foreign-Owned Company) – Own land & buildings under a business entity
Each method has its own advantages and legal requirements, which we’ll explore in detail below.
- Why It Matters: Understanding these laws prevents legal complications and ensures your investment aligns with Indonesian regulations, especially in sought-after locations.
Types of Land Titles in Indonesia
Option 1: Leasehold (Hak Sewa) – The Most Common Option
✔ Foreigners can lease land or property for up to 80 years.
✔ No Indonesian partner or company required.
✔ Ideal for villas, rental properties, and personal use.
🔹 How it works:
- A leasehold agreement is made with the landowner for 25-30 years, with renewal options.
- Foreigners have full rights to develop, rent, and sell the lease.
- Leasehold properties can appreciate in value and be resold.
💡 Best for: Investors looking to own and rent out villas in prime areas like Kuta and Selong Belanak.
Option 2: PT PMA (Foreign-Owned Company) – Own Property Legally
✔ The safest way for foreigners to “own” property in Indonesia.
✔ PT PMA (Penanaman Modal Asing) allows foreign business ownership.
✔ Can buy land under Hak Guna Bangunan (HGB) and build properties.
🔹 How it works:
- A PT PMA company is established in Indonesia.
- The company can purchase and develop property legally.
- The land is held under a Hak Guna Bangunan (HGB) title, valid for 30 years + renewals.
💡 Best for: Investors looking to own land, develop commercial properties, or run a rental business legally.
Option 3: Right to Use (Hak Pakai) – Residential Ownership
✔ Foreigners can own a villa or apartment on designated land.
✔ Requires a KITAS (residency visa).
✔ Valid for 25 years, extendable to 80 years.
🔹 How it works:
- The property must be built on land with a Hak Pakai title (not Hak Milik).
- It can only be used for residential purposes (not for rental income).
- A valid stay permit (KITAS/KITAP) is required.
💡 Best for: While less common than options 1 and 2, this option is best for foreigners wanting to own a home in Lombok for personal use.
Can Foreigners Own Property in Indonesia?
Foreigners cannot directly own land in Indonesia. However, they can:
Secure a Leasehold Agreement
Foreigners cannot directly own land in Indonesia. However, Leasehold Agreements offer a legally recognized way to secure a property for investment.
- Typical Lease Periods: Leases usually last for 25 years and can be extended, giving foreign investors the stability they need to manage long-term projects.
- Security: You can renew the lease, giving you more control over your investment. This is particularly advantageous in developing areas like Lombok.
Obtain a Right to Build (HGB)
If you’re focused on development, the HGB title allows you to own any structure on the leased land. This flexibility makes it ideal for building vacation homes, hotels, or commercial spaces.
- Renewable and Convertible: HGB titles can be renewed or converted into leasehold agreements, offering flexibility for long-term investments.
Establish a PT PMA:
- A foreign-owned company (PT PMA) can own freehold land in Lombok, making it one of the most attractive options for investors who want complete ownership of properties for development.
Where to Buy Property in Lombok?
Not all areas in Lombok offer the same investment potential. The best locations depend on your goals—rental income, long-term appreciation, or personal use.
🏝️ Best Areas to Buy Property in Lombok
| Location | Best For | Investment Potential |
|---|---|---|
| Kuta | Expats, digital nomads, rental investors | High demand, strong rental yields |
| Selong Belanak | Luxury villas, beachfront properties | Premium pricing, high appreciation |
| Gerupuk & Are Guling | Surf tourism, eco-lodges | Growing market, lower entry cost |
| Gili Islands | Beachfront investments, boutique hotels | Strong rental demand, tourism hotspot |
| Senggigi | Retirees, long-term expats | Stable market, ocean views |
💡 Investment Tip: Areas near Kuta, Tampah Hills & Selong Belanak are experiencing fast growth and appreciation.
How Much Does It Cost to Buy Property in Lombok?
Property prices in Lombok are still affordable compared to Bali.
🔹 2025 Property Price Estimates
| Property Type | Price Range (USD) |
|---|---|
| Land (per sqm) | $20 – $250 |
| 1-Bedroom Villa | $150,000 – $200,000 |
| 2-Bedroom Villa | $180,000 – $300,000 |
| 3+ Bedroom Luxury Villa | $250,000 – $500,000+ |
💡 Tip: Buying land for $50,000 – $100,000 and developing a villa can yield strong ROI through rentals.
The Process of Buying Property in Lombok: A Step-by-Step Guide
- Research and Identify the Ideal Location: Lombok has a diverse range of real estate options, from the dynamic Kuta to the relaxing environment of Selong Belanak. Research the area to ensure it aligns with your investment goals, whether for commercial development or a personal retreat.
- Choose the Right Type of Land Title
Deciding between the Leasehold (Hak Sewa) and the Right to Build (HGB) is essential. Leasehold is ideal for long-term leasing, while HGB is better suited for those wanting to develop property. - Engage with Local Experts: Working with local real estate professionals and legal advisors is invaluable. They can help navigate market complexities, provide insights on local pricing trends, and ensure your investment follows legal guidelines.
- Make an Offer: Negotiate the price and terms with the seller.
- Conduct Due Diligence: Verify land titles and zoning regulations and ensure the property complies with local laws. Proper due diligence helps avoid disputes over ownership and legal encumbrances.
- Sign a Preliminary Agreement: Outline the terms of sale with the help of a legal expert.
- Secure the Land Title: Finalize the leasehold, HGB, or PT PMA ownership process.
- Finalize the Transaction: Pay taxes and fees and register the property.
Navigating Legalities and Ensuring Compliance
Working with Legal Professionals
- Importance of Legal Guidance: Engaging with a legal professional experienced in Indonesian property law is crucial. They can assist in drafting and reviewing lease agreements, ensuring that your investment complies with local laws and regulations.
- Safeguarding Your Investment: A legal expert will help safeguard your investment by ensuring all legalities, including land rights and transactional aspects, are correctly handled.
Understanding Taxes and Fees
- Taxation and Transactional Costs: Be aware of the various taxes and fees involved in property transactions, such as property tax, transfer tax, and notary fees. These can vary based on the property type and location.
Maximizing Your Investment in Lombok
Long-Term Investment Strategies
- Assessing Growth Potential: Consider your chosen location’s long-term growth and development potential. With Lombok’s increasing popularity and development, strategically located properties will likely appreciate over time.
- Strategic Property Selection: Choose properties that offer the potential for value appreciation, whether through development, renovation, or changes in the local market.
Exploring Rental Opportunities
- Leverage the Tourism Market: Lombok’s thriving tourism industry makes it an ideal location for short-term rentals like vacation homes or boutique hotels. Properties in tourist hotspots like Kuta Lombok can generate substantial rental income, tapping into the island’s growing appeal.
Final Thoughts: Is Buying Property in Lombok a Good Investment?
✅ Yes! Lombok offers affordable property, high rental demand, and strong capital appreciation.
✅ Foreigners can buy property legally through leasehold, Hak Pakai, or PT PMA structures.
✅ Best areas: Kuta, Selong Belanak, and the Gili Islands for strong ROI and growth.
If you’re looking for a high-potential investment in Indonesia, Lombok is one of the best choices for 2025 and beyond!
In conclusion, buying property in Lombok as a foreign investor involves a comprehensive process of location research, selecting the appropriate land title, engaging with local experts, and conducting thorough due diligence. Navigating legalities and understanding the financial aspects are also key components. With strategic planning and informed decisions, investing in Lombok’s property market can offer substantial long-term rewards.
Resources
Indonesian Investment Coordinating Board (BKPM): The BKPM offers comprehensive information on investment policies, regulations, procedures, and opportunities in Indonesia. It’s an essential resource for foreign investors looking to understand the investment climate and legal requirements.
Ministry of Agrarian Affairs and Spatial Planning/National Land Agency: For real estate investments, this agency provides crucial information on land ownership, registration, and land-related regulations in Indonesia. It’s valuable for understanding the legal aspects of land transactions.
About Nour Estates
We started Nour Estates with a simple idea: to make finding your dream land in Lombok as easy and enjoyable as a day at the beach. Our team is a mix of local folks and people from around the world who fell in love with Lombok just like you. We’ve been in your shoes, faced the challenges of buying land here, and learned all the ins and outs. Now, we’re here to share that knowledge with you.
We are here to find you the perfect land to invest in. Contact us today, and let’s start this exciting journey together!
Can foreigners own freehold land in Lombok?
No, freehold (Hak Milik) land ownership is only for Indonesian citizens.
What makes Lombok an appealing destination for international property investors?
Lombok is a highly desirable location for investors due to its stunning landscapes, rich cultural heritage, and growing real estate market in Indonesia.
How can one navigate the legalities of buying property in Lombok as a foreigner?
Navigating the legalities requires thorough research and possibly the assistance of a local real estate expert or legal advisor. They can provide guidance on the necessary documents and procedures to ensure compliance with Indonesian property laws.
What types of real estate opportunities are available in Lombok for international investors?
Lombok offers a variety of real estate opportunities ranging from luxury villas and beachfront properties to commercial real estate developments. Each offers unique benefits and potential returns based on location and property type.
Start your hassle-free investment journey with Nour Estates. Contact us today for expert guidance!
