Looking to buy land in Lombok? Investing 10 minutes of your time by reading this post is the best you can do to clarify some ideas. Buy land can be a really interesting investment. In this post, we will explain to you some of the most important facts that make Lombok one of the most popular destinations in Indonesia right now and what you need to consider before buying land in Lombok. If you are interested in buying a property in Lombok, check out this other post from us.

All you need to know as a foreigner to buy land in Lombok

1. Get reliable information.

Did you know that foreigners cannot own real estate in Indonesia? This is fact #1 and probably one of the most important ones to know and follow, and this is stipulated by the National Constitution. Foreigners are NOT allowed to hold a Right of Ownership title (Freehold/Hak Milik) to a parcel of land in Indonesia. There is though, a right way to do things for a foreigner to buy land in Lombok, as other methods of investing in land and benefiting from the potential value increase.

2.  Do it the right (and legal) way.

You don’t want to make things quick and cheap when thinking of investing in land in Lombok. We really recommend you seek trustworthy information before doing the big step. You don’t want to check into Google and get confusing or obsolete information. To make rights right, get in touch with a legal expert who can guide you through the process and undertake the required due diligence on your behalf, otherwise you can get through a real nightmare at some point.

3. Check about the 3C’s, you won’t regret it:

• CLEAR: Referring to dispute-free. Make sure that the name of the owner exactly matches with want is stated on the land certificate. Just 1 owner? Check it twice just in case. You don’t want another alleged landowner to suddenly arrive claiming he didn’t know his land was for sale.
• CLEAN: Are you sure the land is not occupied by someone else who is not entitled or being used for other economic activities?
• CORRECT: Is the information in the documents provided correctly? Right size? Right location? Make sure it all matches.

4. Don’t rush into things.

It sounds very exciting as a foreigner to buy land in Lombok. BUT, don’t be anxious and take your time. It’s an important decision to, do your research, really think about the different options you have. We totally understand that you will come up with many questions, and we will be there for you anytime to help you make the right final decision.

5. Deal with this matter with a trustworthy team of professionals.

With Oceano Development you will benefit from over a decade of experience in Real Estate in Lombok and a team located right where you need them. We perfectly understand your worries and corners. We went through the same thing many years ago and we understand that buying land in Lombok foreigners is a very complicated decision, but having the right people around makes it easier.

6. The land itself is not the only thing that matters.

What’s around the land? Is any infrastructure to access the land? Is the already some services installed such as water, electricity or drainage? In case it’s not, is this included in the price of the land you are interested in or will you have to pay that additionally? We could be talking about big money here, don’t forget to ask about it and make sure the information is correct.

7. Location, location, location.

What are the conditions you will sign for? Are you sure the location is the right one? Where the land is located is one of the driving points of the value of the land. What are your impressions regarding the long term? Are you sure about the size of the land you really want to buy?

8. Look deep into the costs.

When buying land in Lombok as a foreigner there is much than what’s the price per square meter. Make sure you are also considering other costs such as administrative costs with the Land Deed Making Officer (PPAT), taxation, company establishment to be able to own land as a foreigner, etc.

Facts before buying land in Lombok

Are you sure that being land in Lombok is the right thing for you? Let’s quickly go over some important factors to consider:

• Every kind of investment has some level of risk, and buying land in Lombok is not different.

The government frequently shifts between pro-Indonesian and pro-foreign investment. This shifting results in new land ownership regulations by the Parliament and Supreme Court rulings that add a high degree of legal complexity. What is quite certain is that Indonesian citizens will be able to hold a freehold title also in the future. That’s why you are willing to look into the small typing of your contract. Need help with this? Our legal team will be more than happy to assist you.  

• Which of the four investment strategies fits better in your investment strategy?

Land Banking:  is a long-term and passive investment strategy where the investor typically holds the investment for several years.

• • Land banking has been the most used investment strategy in south Lombok and in many areas land prices have increased by 40% annually.

Trading: is a short to medium-term and active investment strategy. The investor typically adds basic infrastructure and/or subdivides into smaller plots.

Developing: This is a medium to long-term and active investment strategy. The investor typically first adds value by building for example a villa and enables rental of the villa.

Villa: Is a medium to long-term and semi-passive investment strategy. The investor typically invests in a ready-built villa or one off the drawing.

Evolution of Lombok land prices

Over the past ten years of operating in the South Lombok area, Oceano Development has collected a vast amount of data on wholesale land transactions. Lombok has historically been a poor cousin to Bali’s tourism boom but that is changing with large amounts of investment.

As we have already mentioned earlier in our post, considering the service and infrastructure around the land you’re considering buying is one of the most important factors to consider. Data shows that land prices on Lombok have increased more than 200% in 4 years, yet still list for as little as US$230 per square meter. 

Massive investments in major hotel chains opening their doors in the next couple of years, the custom build MotoGP racetrack, and the $3 billion Mandalika Project on the island’s south coast; are some of the factors that will lead to a steep climb in land prices on Lombok in the upcoming years in the southern coast of Lombok leading a knock-on effect in terms of tourism facilities and opportunities for investment and tourism.

If you’re still looking for your investment opportunity and buy land in Lombok in order to build your dream project don’t hesitate to get in touch with us and we will be glad to give you some extra advice. We will make sure all the process runs smooth and safe and will help you to make the best sedition for your investment.

This document is a GUIDE ONLY. Please contact us directly and we will discuss the best option for you for buying land in Lombok with our legal team.