How to Have Property for Foreigners in Indonesia? – Some of us might be confused about how to buy and own the property in Indonesia, either to buy an apartment or house. The reason for foreigners to own this property, mostly to do the investment, as this type of investment has a high opportunity especially in Jakarta and Bali. Then, what kind of certificate the foreigners will get? 100% ownership or what?
Here, we will guide you on what you should be aware of in regard to buy a property in Indonesia.
1. Land title types and who can have it
– Hak Sewa (Right-to-Lease)
With this title, you will not get any property certificate. Hence, you can use the property which is owned by an Indonesian for a leasehold period of 25 years and can be extended depends on the agreement with the landlord.
Foreigners with and without KITAS can have the lease agreement upon the property they want to rent with the lease period as agreed.
– Hak Pakai (Right-to-Use)
This title can be received from a person who has Hak Milik (Freehold/Right-to-Own) of their land/property with the use term of 25 years and can be extended up to 80 years. By having this title, you are allowed to construct a residential property, rent, sell and transfer the title to another eligible person in Indonesia.
To have this title as an individual, you need KITAS (limited stay permit) or KITAP (permanent stay permit) and of course, you need to reside in Indonesia. But it is restricted to just one property per individual and can only be for residential usage.
– Hak Guna Bangunan (Right-to-Build)
This title is valid for 30 years and can be extended for another 20 years. If you have this title for your property, you can use your property as a mortgage.
A Right-to-Build title can be owned by only a legal entity in Indonesia as PT PMA (Foreign Direct Investment Company). The benefit of using PT PMA to buy the property is you will get full freehold ownership, without the needs of using Indonesian as a nominee.
– Hak Milik (Freehold/Right-to-Own)
Hak Milik is only applicable for Indonesian citizens (individual) and can be used for a lifetime. This title allows the owner of the property to sell the title, rent the property, exchange it and use it as a mortgage.
2. What you need to know about Property rights for apartment units (Satuan Hak Milik Satuan Rumah Susun)
– HGB Hak Milik (Freehold Right-to-Build)
The development rights status if the apartment is built on top of the freehold land, meaning that the land is owned by the developer himself.
– HGB Murni (Pure Right-to-Build)
The development rights status if the apartment is built above the government-owned land. If one day the government asks the developer to return the land, the government will pay 80% of the land price and each owner of the unit will get the portions based on the unit size they have.
Only Indonesian citizens who can get the full ownership of a unit in the apartment in Indonesia, therefore, the developer usually can give the foreigners this HGB Murni as their property ownership.
– HGB HPL (Land Management Rights)
This means that the developer only got the authorization to build an apartment from the third party.
For this type of status, if the landlord or the third party asks the developer to return the land, then each owner of the units will not get any refund, but it still depends on the agreement between the developer and the third party.
If you decide to leave Indonesia and own property as an individual, then you need to transfer the right of use to another eligible person based on the property law in Indonesia.