1. Ownership and legal status
- Indonesian or foreigner
- Foreigners cannot own land directly in Indonesia. Usually they use schemes such as
- Hak Pakai
- Hak Guna Bangunan (HBG) through a business entity (PT PMA)
- Nominee Arrangement (high risk and not recommended)
- Check Land Certificate
- Make sure the land has a valid certificate: SHM (Sertifikat Hak Milik), SHGB, or SHP.
- Check the authenticity of the certificate at BPN (National Land Agency).
2. Zoning and Permits
- Make sure the property is in the appropriate zone (residential, tourism, or commercial zone).
- Properties used for business (such as villas or guesthouses) must have the appropriate IMB (Building Construction Permit) or PBG (Building Approval).
- Check if the property has an operational license if it is used for rental.
3. Legal Due Diligence
- Use a trusted local notary and lawyer to ensure there are no legal issues, disputes or inheritance problems.
- Don’t be tempted by low prices before knowing the legal background of the land or building.
4. Infrastructure and Access
- Check the availability of water, electricity, road access, and nearby facilities (beaches, restaurants, schools, etc).
- Pay attention to potential floods, landslides, or other natural disasters.
5. Purpose of Purchase
- For investment? Look for areas with high occupancy rates
- For living? Consider the atmosphere, community, and personal needs.
6. Price and Market Value
- Compare prices of similar properties in the same location.
- f the property is already running (villa, guesthouse), ask for financial statements and occupancy data.
7. Taxes and Additional Costs
- Understand the sales and purchase tax, BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan), and rental tax if the property is used for business.
- Don’t forget notary fees, name transfer, and other licenses.
