Real Estate Laws and Regulations to Know in Papua New Guinea

Published on January 17, 2026 and written by Cyril Jarnias

Buying, leasing, or developing property in Papua New Guinea is not simply about signing a contract and paying a deposit. The country has a unique land tenure system, dominated by customary ownership, governed by a complex mosaic of overlapping laws and institutions. For an investor, developer, NGO, or even an expatriate individual, understanding this framework is the prerequisite for avoiding disputes, project delays, or, at worst, the outright loss of one’s rights.

This article provides an operational overview of real estate rules in Papua New Guinea, based on legal texts, administrative practice, and the documented experience of major public and private projects in recent years.

A Dual Land System Dominated by Customary Land

Before discussing leases, building permits, or taxation, one must understand the most fundamental reality of the country: almost all land belongs to communities.

Approximately 97% of the territory is customary land, collectively held by clans, tribes, or lineages according to orally transmitted rules. The remaining 3% is “alienated” land, meaning land that has been removed from the customary regime to become state land or formally titled private property.

We are therefore dealing with a true dual system:

Land Type	Estimated Share of Territory	Main Characteristics
Customary Land	≈ 97%	Collective ownership, untitled, governed by customary law, not for sale but leaseable
Alienated Land (State / Private)	≈ 3%	Registered, governed by statutory law, freely transferable and alienable (under conditions)

The Constitution of the Independent State of Papua New Guinea states that land is first owned by the people of the country. It protects citizens against unjust deprivation and explicitly recognizes the role of customary law in governing rights over these 97% of traditional lands.

Key Laws Governing Property and Construction

The legal landscape for land and real estate is based on a set of complementary texts. The main pillars are as follows.

General Land Framework

The cornerstone law is the Land Act 1996 (Act No. 45 of 1996). It consolidates previous land law and governs practically all operations on alienated land: state acquisition, government leases, issuance of “State Leases,” lease categories (agricultural, residential, commercial, urban, etc.), compensation procedures for expropriation, and the role of the Land Board.

The Land Registration Act 1981, amended in 2009, describes the procedures for registering rights over alienated land and, since its amendment, also allows for the titling of certain customary lands registered in the name of incorporated groups (ILG).

Two other texts are central for traditional lands:

To these laws are added the Customary Land Recording Act 2000, which facilitates the mapping and recording of customary rights, and the Land Dispute Settlement Act 2005, intended to govern the settlement of very common land disputes through specialized mechanisms (Land Mediation Committees, Local Land Courts, etc.).

Building and Physical Planning Law

Regarding strictly real estate and technical matters, it is the Building Act 1971, supported by the Building Regulation 1994, that sets the construction rules. These texts define:

– the classification of buildings (residential, office, commercial, factory, parking, warehouse, etc.);

– technical standards for structure, fire safety, earthquake resistance and wind resistance, referencing PNGS national standards and often Australian Standards (AS);

– the procedures for processing building permits, construction inspections, and certification upon completion.

Environmental and Sectoral Standards

For industrial, mining, petroleum, or large-scale real estate projects, the environmental aspect plays a key role via the Environment Act 2000 and its numerous regulations (prescribed activities, procedures, water quality criteria, fee schedules, etc.). Any development activity likely to alter the environment must obtain an environmental permit from the Conservation and Environment Protection Authority (CEPA), often after an environmental impact assessment (EIA) and public consultation.

In the hydrocarbons sector, the Oil and Gas Act 1998 and its regulations additionally require social impact studies, social mapping, identification of customary landowners, and the holding of Development Forums to discuss benefits to be provided to communities.

Finally, several sectoral texts (Public Health Act 1973, National Water Supply and Sewerage Act 1986, Electricity Industry Act, Fire Service Act, etc.) come into play at the stage of a project’s technical approvals (water, sewerage, electricity, fire safety). The National Water Supply and Sewerage Act, for example, takes precedence over the Building Act in case of conflict on plumbing and sewerage matters.

Who Does What? Key Real Estate Institutions

The Papua New Guinean institutional landscape can be daunting due to its density. Each stage of a real estate project involves several authorities.

Land Administration

The core of the system, for both state land and registered customary land, is the Department of Lands and Physical Planning (DLPP). It manages state land, organizes lease allocations, leads the policy on transforming customary land, and houses the offices of the Registrar of Titles and the Surveyor General. Its headquarters are in Port Moresby (Eda Tano Haus, Waigani Drive) and its contact details are published, including a central phone number (+675 301 3246), highlighting the centrality of this ministry for any serious application.

Until recently, the Land Titles Commission and the National Land Commission handled title matters and public land respectively. They have been merged into a new entity, the Land Commission of Papua New Guinea, created by the Land Commission Act 2022. This commission, both quasi-judicial and administrative, holds hearings for:

The Land Board, established by the Land Act, plays a decisive role in allocating State Leases. It examines applications, decides on competing bids, and makes recommendations to the Minister for Lands, who makes the final decision.

Planning and Construction

For urban planning and construction, several bodies share tasks:

– the National Physical Planning Board and the Provincial Physical Planning Boards process planning applications under the Physical Planning Act;

– in the National Capital District, a specific board and the National Capital District Building Authority oversee urban planning and construction control;

– Provincial Building Boards exist in each province, and the Head of State can create a Building Authority for a specific area, vested with the same powers.

Environment, Investment, and Taxation

On the environmental front, CEPA processes the permits provided for by the Environment Act 2000, while the overseeing ministry supervises the national environmental strategy (NEMS 2021–2025), protected areas policies, and international commitments such as the Convention on Biological Diversity.

For real estate projects led by foreign investors, the Investment Promotion Authority (IPA) is essential. Created by the Investment Promotion Act 1992, it issues foreign enterprise certifications (“Foreign Enterprise Certification”) and maintains the company register. Any company controlled at least 50% by non-citizens is considered foreign and must obtain this certification before conducting any activities, including real estate.

On the tax side, the Internal Revenue Commission (IRC) oversees income tax, withholding taxes, VAT (GST), and, from 2026, the new capital gains tax regime established by the Income Tax Act 2025. Even though this article focuses on land, these tax rules directly influence the profitability of real estate investments.

Customary Land: Rules, Changes, and Market Integration

The overwhelming presence of customary land (≈ 97% of the territory) requires a detailed understanding of its functioning to grasp the possibilities and limitations of a real estate project.

Nature of Customary Rights

Customary lands are collectively held by groups (clans, tribes, extended lineages). Boundaries are often marked by natural features (rivers, trees, ridges) and oral histories passed down through generations, rather than by cadastral plans.

Rights generally include:

– the right of access and use (to cultivate, hunt, harvest);

– the right of inheritance, governed by local customs (sometimes patrilineal, sometimes matrilineal);

– the right to collective decision-making on projects affecting the land (leases, concessions, occupation permits);

– the right to compensation if the land is acquired or affected by a project.

Impossibility for a Foreigner to Buy Directly

Non‑citizens cannot directly acquire or lease customary land from traditional owners. The Land Act 1996 provides that the State must first acquire or lease this land (either by agreement or through more controversial procedures like Special Agricultural and Business Leases), before it can sublease it to a private investor.

In practice, a foreign investor wishing to carry out a real estate project on customary land has several pathways, all involving the State, an ILG, or both.

Option for Mobilizing Customary Land	Key Legal Mechanism	Main Remark
Acquisition by Agreement	Section 10 of Land Act 1996	Requires agreement of customary landowners
SABL (Special Agricultural and Business Lease)	Sections 11 & 102 of Land Act 1996	Highly controversial mechanism, subject to inquiries and reforms
Compulsory Acquisition for Public Purpose	Section 12 of Land Act 1996	Constitutional protection against unjust deprivation
Voluntary Registration via ILG and Customary Title	Land Groups Incorporation (Amendment) Act & Land Registration (Amendment) Act 2009	Makes land “bankable” but with practical challenges
Tenure Conversion	Land Tenure Conversion Act 1963	Used on a case-by-case basis, managed by the Land Titles Commission

SABLs, which allow the State to take a 99-year lease on customary land and then sublease it to a company, have caused scandal: a Commission of Inquiry uncovered numerous cases of corruption and dubious community consent (only 4 leases out of 42 investigated had clear agreement from the owners). A political decision to abolish this system was announced, but its implementation has been slowed by the courts. Any investor must therefore approach this type of mechanism with extreme caution.

ILG and Voluntary Registration: Towards “Bankable” Titles?

To gradually integrate customary lands into the formal market while respecting community rights, the 2009 reform established the Voluntary Customary Land Registration (VCLR). The idea: allow a clan or customary group to incorporate as an ILG, register its land under a customary title, and then lease it to third parties, without losing collective ownership.

The process is heavy and controlled.

Process description

– creation and registration of the ILG;

– submission of a detailed plan and evidence of customary ownership to the Director of Customary Land Registration (DLPP);

– land inquiry and site inspections;

– publication of the plan in the press with a 90-day objection period;

– potential referral of disputes to the Local Land Court;

– final registration and issuance of a certificate of title in the name of the ILG by the Registrar of Titles.

– risks of subsequent challenge to the composition of the ILG or its representatives;

– weaknesses in land administration (title register, archives, etc.);

– difficulties in enforcing claims on land with high cultural and political value.

Reforms are recommended to strengthen the reliability of processes (improved registers, more robust conflict resolution mechanisms, securing Land Commission decisions), to make these leases more attractive for real estate financing.

Alienated Land: State Leases, Freeholds, and Foreigner Restrictions

Regarding the roughly 3% of alienated land, the framework is closer to Western-style land systems, with registered titles, state leases, and private ownership. But here too, Papua New Guinea adds its specificities.

Freehold, Leasehold, and State Leases

Alienated land can be held in freehold (full private ownership, rare) or in leasehold via a State Lease granted by the State for a term generally between 50 and 99 years. Urban Development Leases, intended for urban development projects, are often limited to 5 years.

The Constitution and the Land (Ownership of Freeholds) Act prohibit non‑citizens from owning freeholds. They can, at best, benefit from temporary conversions to leases or partner in structures where land ownership remains with citizens.

Once the lease is registered, Papua New Guinea applies a Torrens‑type system: the registered certificate of title or state lease provides near-indisputable proof of ownership (indefeasible title), giving strong legal security… provided the registration was correctly processed, which is not always the case in practice.

Process for Obtaining a State Lease

The standard procedure follows several steps:

1. Submission of an application to the DLPP, specifying the type of lease desired, intended use (residential, commercial, industrial, etc.), and required information about the applicant. 2. Processing by the Land Board, which may hear several applicants for the same plot. 3. Recommendation by the Land Board to the Minister for Lands. 4. Decision by the minister and publication of the grant in the National Gazette. 5. Issuance of the state lease and registration in the title register by the Registrar of Titles.

Private Leases and Landlord‑Tenant Relations

Beyond state leases, the relationship between owners (or leaseholders) and tenants is governed by the Landlord and Tenant (Miscellaneous Provisions) Act 1975 and the Property Law Act 1978. These texts, inspired by English law but adapted to the local context, specify in particular:

– the effects of a transfer of the leased property on an ongoing lease (no formal “attornment” by the tenant required);

– the assignability of lease obligations for both lessor and lessee;

– possible remedies in case of non-payment or breach of clauses.

Tenancy law does not set a rent schedule but imposes basic obligations: landlord’s duty to maintain habitable and safe housing, requirement for written notice for evictions, regulated possibility for the tenant to challenge a rent increase deemed abusive or to seek compensation for non-return of a security deposit.

Launching a Real Estate Project: Due Diligence, Permits, and Inspections

Between the land framework, building law, environmental rules, and taxation, a real estate project in Papua New Guinea quickly resembles a high‑wire administrative act. A rigorous due diligence approach is essential.

Land and Corporate Due Diligence

Before any financial commitment, it is recommended to:

– verify the land status (customary, state, freehold, State Lease) through a title search with the DLPP or Land Commission;

– analyze the certificate of title (restrictions, remaining lease term, mortgages, easements);

– check, if applicable, the regularity of the creation and governance of a partner ILG;

– confirm the identity of the seller or lessor and their authority to conclude the transaction;

– cross-check information with local authorities and, for customary land, with clan leaders and customary mediators.

Building Permits and Technical Standards

The Building Act and its regulation impose a formalized building permit application process. The application must be filed on a standard form (Form 1) with the Provincial Building Board or competent authority, accompanied by:

– a site plan at a minimum scale of 1:500;

– architectural and structural plans at 1:100;

– detailed material specifications;

– proof of ownership or lease, and any easements.

The country is divided into seismic zones (1 to 4) and design wind zones. Structural calculations must incorporate these parameters, as well as specific coefficients (basic seismic coefficient, importance factor, structural type factor) explicitly mentioned in compliance certificates.

Coordination with Planning and Environment

Parallel to the building permit, any project located in a declared planning area must obtain a Physical Planning Permission (outline or full) in accordance with the Physical Planning Act. This permission verifies the project’s compatibility with zoning, densities, heights, setbacks, etc.

For large-scale projects or those with environmental risks, the Environment Act classifies activities into levels (Level 1, Level 2 categories A and B, Level 3). Beyond a certain threshold, a full EIA must be submitted, public consultation conducted, and a decision awaited from CEPA. Operating without an environmental permit is illegal and exposes one to very high fines, calculated per day of non-compliance, potentially reaching several hundred thousand kina in case of serious damage.

One should expect, for a medium-sized industrial project, a timeframe of approximately 12 to 24 months to obtain all approvals (building permit, environmental, utility connections, sectoral approvals).

Expropriation, Compensation, and Protection of Rights

The Constitution recognizes the State’s right to proceed with compulsory acquisitions for public purposes, but governs this practice with substantial guarantees: deprivation of property must not be unjust, and adequate compensation must be paid.

State Acquisition and Right to Compensation

The Land Act distinguishes two pathways for State acquisition:

– by amicable agreement, based on negotiation with the owners (citizens, ILGs, State Lease holders);

– by compulsory procedure, for reasons of public interest (infrastructure, schools, hospitals, defense, etc.).

In the latter case, a “notice to treat” is first served on the owners so they detail their rights and indicate the desired sale price. If no agreement is reached, the minister can order an acquisition by notice published in the National Gazette. From the date of publication, the land is transferred to the State, free of all encumbrances, and the various rights of the parties (owner, tenant, mortgagee) transform into rights to financial compensation.

In practice, several cases illustrate the sensitivity of these issues, such as the claims of a sub-clan for additional compensation related to the site of the Holy Trinity Teachers College in Mt Hagen, stemming from an acquisition in the 1940s. The decision to pay 700,000 kina in compensation highlights the risk, for the State and investors, of long-lasting conflicts if the identification of the true customary owners was not correctly conducted upfront.

Resettlement and Projects Funded by International Donors

For projects supported by institutions like the Asian Development Bank (ADB), an additional set of requirements applies via the Safeguard Policy Statement (SPS). Within the framework of the Rural Primary Health Services Delivery Project, for example, a Land Assessment Framework was established to govern site selection and land acquisition (often customary) intended for the construction or rehabilitation of approximately 32 Community Health Posts.

– priority to public land free of customary claims;

– use of voluntary land use agreements or negotiated purchases;

– independent verification of the voluntary nature of any land donations;

– payment of compensation based on the Valuer‑General’s valuation, to be paid before work begins;

– consideration of vulnerable groups (women, female-headed households, the elderly) in the sharing of compensation.

This type of framework illustrates a broader trend: the increasing pressure from donors and civil society to strictly regulate land acquisition practices and avoid forced displacement.

Restrictions on Foreigners, Investment Structures, and Guarantees

For non‑citizen investors, Papua New Guinean real estate law combines openness via leases with a firm closure on land ownership.

Prohibitions and Room for Maneuver

Two principles govern foreign access to land ownership:

– prohibition on owning freeholds;

– inability to buy or lease customary land directly from traditional owners.

Non‑citizens must therefore:

– either take a State Lease or sublease on already alienated land;

– or enter into a lease with the State or an ILG, within a legally authorized scheme (prior acquisition by the State, registration of customary land, etc.).

Furthermore, any investment must be certified by the IPA as a “foreign enterprise,” with a minimum investment threshold (100,000 kina) and control over activities reserved for citizens (small trade, subsistence agriculture, etc.). Non-compliance with this obligation can lead to contract nullity, suspension of certification, and administrative sanctions.

Investor Guarantees and Political Risks

Despite this restrictive framework, the government expresses a willingness to facilitate productive investments, particularly through the Investment Promotion Act, which offers guarantees:

Taxation also offers various incentive schemes for investments (special economic zones, incentives for manufacturing, rural incentives).

However, regulatory uncertainty is never far away. A proposed reform of the Land Act, for example, raised serious concerns in business circles: it considered further limiting the holding of titles by non‑citizens, even potentially voiding certain state leases and mortgages held by foreigners after a period of 30 years. Employer organizations saw this as a risk of investor flight, while NGOs feared, conversely, increased state control over land to the detriment of customary communities.

Real Estate Taxation: Registration Duties, Taxes, and the Future Capital Gains Tax

Papua New Guinea does not have, strictly speaking, a generalized land tax like in other countries, but real estate is subject to several levies.

Stamp Duty, Registration, and Rents

Real estate transactions are subject to stamp duty, calculated as a percentage of the declared value:

Type of Transaction	Approximate Stamp Duty Rate
Transfer of Property	Progressive scale, approximately 2 to 5%
Assignment of Lease	Approximately 1% of the lease value
New Leases (generally)	Rate applied to the total rental amount

In addition to these duties are registration fees (approximately 0.01% of value), as well as notary and lawyer fees. The seller does not pay a specific tax on capital gains as such, but the profit may be included in taxable income if the transaction is part of a business activity.

Capital Gains Tax: A Paradigm Shift to Come

Until now, there has been no general capital gains tax regime. The Income Tax Act 2025 will change this from 2026, with the introduction of a 15% capital gains tax on the disposal of certain “taxable assets.”

Targeted assets include in particular:

– resource rights (mining, hydrocarbons);

– information pertaining to these rights;

– interests in entities where more than 50% of the value derives from such assets.

Concurrently, a 10% VAT (GST) applies to most goods and services. Pure real estate transactions may be exempt in some cases, but related services (construction, property management, engineering services, etc.) are generally subject to it if the provider exceeds the annual turnover threshold.

A Complex Reality: Conflicts, Reforms, and Social Issues

Beyond the texts, real estate in Papua New Guinea is marked by deep tensions.

Scarcity of Alienated Land and Informal Urbanization

The low proportion of available alienated land in Port Moresby and other urban centers, combined with population growth and rural exodus, leads to an explosion of informal settlements. About a quarter of the urban population lives in unplanned settlements, often on customary land occupied precariously. These situations create an immense challenge for authorities: how to regularize, extend infrastructure, while respecting customary rights and without encouraging illegal occupation?

Role of Women and Community Governance

In many rural Papua New Guinean societies, women have actual use rights over customary land (agricultural work, access to resources), but remain largely excluded from decision‑making bodies and the equitable sharing of benefits from leases or compensation paid to communities. Case studies in the mining and forestry sectors show that this blind spot in land governance can fuel tensions, even contribute to serious crises, as was the case in Bougainville where poor management of royalties was one of the conflict factors.

Conclusion: Navigating a Demanding but Potentially Rewarding Land System

Papua New Guinea offers real real estate opportunities, driven by significant needs for housing, social infrastructure (health, education), and industrial facilities. But these opportunities are only accessible to those who accept to play by complex rules, tested by decades of tensions between custom, statutory law, and market pressures.

For a real estate player, five key ideas emerge:

2. Leases rather than ownership. For foreigners, the horizon is that of leasehold (up to 99 years), not full ownership. It is better to structure investments based on rental flows, usage rights, and contractual security, rather than pure land speculation.

3. Administrative compliance is not a formality. Building permits, planning permissions, environmental licenses, IPA certification, ministerial approvals for leases: neglecting any one of these building blocks can compromise an entire project.

5. Social and environmental sensitivity is unavoidable. In a country where land is inseparable from the identity and history of communities, long-term success depends on genuinely co‑constructing projects with customary landowners, scrupulously respecting compensation frameworks, and paying attention to internal clan power dynamics.

Understanding and respecting real estate laws and regulations in Papua New Guinea is not just a legal obligation: it is the condition for building projects that endure, in a country where land remains first and foremost a matter for the people.