"Freehold" and "leasehold" are the two words you will see on almost every land listing in Lombok. But for a foreign buyer, "freehold" rarely means what it does at home. Here is a clear comparison to help you choose.
What "freehold" means in Lombok
A freehold listing usually refers to land with a Hak Milik (SHM) certificate, the strongest form of ownership in Indonesia. Only Indonesian citizens can hold SHM. A foreigner can access "freehold" land in two ways:
- Through a PT PMA (foreign-owned company). The SHM is converted into an HGB title in the company's name.
- Through Hak Pakai, if you are a resident with a KITAS or KITAP, for a residential home.
What "leasehold" means
With leasehold (Hak Sewa), an Indonesian owner keeps the title and leases the land to you for a fixed period, commonly 20–30 years, with a notarised agreement. You can build and use the land during the term.
Side-by-side comparison
| Leasehold | Freehold via PT PMA (HGB) | |
|---|---|---|
| Who holds the title | Indonesian owner | Your Indonesian company |
| Duration | Fixed term, often 20–30 years, extendable by contract | 30 years, extendable and renewable (up to ~80 years) |
| Upfront cost | Lower | Higher (land price + company setup) |
| Ongoing admin | Minimal | Company reporting, licences, tax |
| Rental business | Possible, but check licensing | Designed for it |
| Resale | Transfer remaining lease (value declines over time) | Sell the HGB or the company shares |
| Best for | Personal villa, smaller budgets | Investors, rental villas, hospitality |
How to choose
Choose leasehold if…
- You want a holiday home or a single villa.
- You prefer a simpler, lower-cost entry.
- Your time horizon fits the lease term.
Choose a PT PMA if…
- You plan to rent villas commercially or build several units.
- You want a long-term, renewable title and a cleaner exit.
- You are comfortable with company administration.
Leasehold contract checklist
- Term length and extension price fixed in the contract.
- Right to build, renovate, sub-lease and transfer the lease.
- What happens to buildings at the end of the term.
- Registration of the lease on the SHM certificate.
- Signed before a licensed notary, with payment via bank transfer.
Every listing on Talora shows its ownership type, lease length and certificate. Filter land by freehold or leasehold, or read the full foreigner's buying guide.
