Foreigners can buy property in Indonesia, under their own name, under the Right of Use (Hak Pakai) property ownership status.

The full details of Hak Pakai can be found in Presidential Decree No. 41 of 1996. "Hak Pakai is the right of use over state-owned land or property owned by public or private entity for a specific purpose, for generally a finite period," says public notary Evi Susanty Panjaitan. "Hak Pakai can be sold, exchanged or transferred, under the specific period.

"It may be held by an Indonesian individual or entity, foreign individual, or a foreign legal entity with a representative office in Indonesia. Hak Pakai is not necessarily restricted to apply only to foreigners domiciled in Indonesia. The National Land Office would only require the immigration (arrival) stamp proof on the foreign owner's passport."

For documentation purposes, while not domiciled in Indonesia, the foreign owner's address may be the address of the land/house to be purchased or another existing permanent residential address in Indonesia, excluding a hotels.

Properties under Hak Pakai status are mortgageable.

With the Hak Pakai a foreigner could be granted the right of use for a period of 90 years; Right of Use initially will be granted by the government for 25 years and extendable for another 20 years, which then is renewable for the same period of time (another 25+20 years).

The fees involved for the extension will be 2% of the Government's Land & Building Valuation (NJOP), to be paid 2 years prior to the expiry date.

If a foreigner wishes to purchase vacant land, a letter stating that the immediate construction of a building will be part of the investment has to accompany the Hak Pakai. Alternatively, the land has to be leased out under a long lease agreement should a building not be part of the land investment.

In short, while the said foreigner does not stay in Indonesia, the land property must be managed and/or be leased out for a long period of time.

If a property with Hak Pakai status needs a villa rental permit, the only difference is the original NJOP will be adjusted to be close to the market transaction value.

In Bali, the NJOP of a property is usually much less than the market transaction value. Nobody would be able to give a certain indication on how much less as the value really varies from one area to another.