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Complying with Legal Boundaries for Purchasing
Coastal and Small-Island Land

purchasing a small island

Purchasing a small island or beachfront is increasingly popular among luxury buyers and developers. Yet coastal zones and small islands fall under strict legal compliance, far beyond standard inland properties. Ignoring these rules can lead to failed transactions, fines, or forced repossession.

What Qualifies as Coastal & Small-Island Land?

  1. 1. Coastal Zones are shoreline parcels subject to maritime, environmental, and spatial‐planning laws.

    2. Small Islands are land masses under 2,000 hectares regulated to balance private use with public, conservation, and defense needs.

Ownership Limits on Small Islands

Under Ministerial Regulation of Agrarian Affairs and Spatial Planning/National Land Agency (Peraturan Menteri Agraria dan Tata Ruang / Kepala Badan Pertanahan Nasional/ Permen ATR BPN) Number 17 of 2016 Article 18icon for new tab, private ownership of small islands (under 2,000 hectares) is capped at 70% of an island’s total area.

The remaining 30% must be reserved for public use, environmental conservation, and national defense.

Buyer cannot acquire an entire islet, even if a seller advertises it for sale. This rule protects ecological balance and strategic interests.

Absolute Ban on Full Privatization

The Ministry of Agrarian Affairs and Spatial Planning (ATR/BPN) has repeatedly clarified that there is no legal basis for privatizing an entire island. In a June 2025 press briefing, the Head of Public Relations and Protocol Bureau of the ATR/BPN, Harison Mocodompis, stated:

“There is no legal basis for privatization. So, privatizing the island as a whole is not possible.”

As such, any advertisement claiming exclusive sale of a whole island should be treated with caution.

Ensuring Clear Title and Legal Status

Many coastal plots still rely on customary claims or traditional land documents (girik/letter C) rather than official land certificates.

The official land certificates are as follows:

  1. Right of Ownership Certificate (Sertifikat Hak Milik / SHM).
  2. Right to Build Certificate (Sertifikat Hak Guna Bangunan / SHGB).
  3. Right to Cultivate (Sertifikat Hak Guna Usaha / SHGU).
  4. Right to Use (Sertifikat Hak Pakai).

Under Government Regulation (Peraturan Pemerintah / PP) Number 24 Year 1997 on Land Registration (Articles 3 & 5)icon for new tab  and Government Regulation Number 18 Year 2021 concerning Management Rights, Land Rights, Residential Units, and Land Registrationicon for new tab, these informal proofs must be converted into official certificates to secure legal ownership.

Purchasing without a formal certificate exposes the buyer to title disputes and even loss of rights if the conversion process is not properly followed. Buyer must obtain an official land certificate through the National Land Agency (Badan Pertanahan Nasional / BPN) before February 2nd of February 2026, to avoid the risk.

Verify Zoning and Location Permits

Before any coastal land purchase, buyer must ensure local spatial plans (Rencana Tata Ruang Wilayah / RTRW) and obtain a valid location permit from the regional government. These requirements stem from Law Number 26 of 2007 on Spatial Planningicon for new tab (amended by Law Number 6 of 2023)icon for new tab.

The location must:

  1. Not within a protected or conservation zone.
  2. Not designated as a non-cultivation or buffer area.
  3. Have an official Location Permit.
  4. Allow buyer’s intended use (residential, commercial, or tourism).
  5. Secure proper zoning clearance and permits to avoid any administrative fines or criminal penalties.

Importance of Due Diligence

Purchasing a small island or coastal land is different from an ordinary real estate transaction. You must conduct due diligence on title status, spatial planning, and ownership limits. Ignoring these legal boundaries can lead to severe financial loss and lengthy disputes.

  1. Title Audit: Confirm formal land certificates with BPN.
  2. Ownership Limits: Verify small-island caps and public-use allocations.
  3. Spatial Compliance: Review local RTRW and secure a Location Permit.

Let Us Safeguard Your Coastal Investment

Putranto Alliance offers end-to-end support, from due diligence to assisting with the legal process for the desired property. Ensure your coastal or island property purchase is fully compliant and secure.

Discover Our Land Sales Purchase Deeds Service

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Jl. Denpasar Raya Blok C4/24
Kompleks Menteri, Kuningan
Jakarta Selatan 12950 Indonesia
+(62) 21-520-4989

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