Thread: Hak Pakai for foreign investors : Property Ownership

Do you want to own your property without the aid of an Indonesian National?

Hak Pakai for foreign investors

Since March 2004 in effect in Bali:

The government offers foreign investors land rights that are relevant to the nature of their business. Prospective buyers of land for any purpose should consult the local government authorities on land use, planning and zoning. Based on a Presidential Decree issued in June 1996, foreigners domiciled in Indonesia are allowed to own one residential property. To meet the regulations of ownership of a house or an apartment, a foreigner must be deemed to be "beneficial to national development" and must be either:

An Indonesian resident (domiciled permanently in Indonesia) in possession of a permanent resident permit

A non-resident (domiciled in Indonesia only at particular times) in possession of appropriate visit and immigration stamps in his/her passport.

A foreigner can purchase or construct a house built only on land with the right of use (Hak Pakai), the right of use with the right of proprietorship, or the right of lease (Hak Sewa). An apartment can only be purchased by a foreigner on land with right of use (Hak Pakai). Foreigners are not, however allowed to purchase houses or apartments classified as "low cost housing" or "very low-cost housing" Ownership is limited to 25 years, and is extendible for another 25 years provided that the foreigner remains an Indonesian resident or meets the status requirements. If the foreigner departs from Indonesia, the property must be sold or transferred within one year after departure. If the foreigner or his family does not use the house for more than 12 consecutive years, then the foreigner forfeits the "being domiciled" status, for the purpose of owning residential property.

from:

[brl=http://www.bali-information.com/bali_properties_page.php?p=11:ziipobe5]Indonesian Property Laws[/brl:ziipobe5]

Hey Bert,

I have read this statement on another web site, it brings up some interesting points. Although this is not leasehold, there are time restrictions (25 years + 25 years). Am I right in understanding that if you want to sell the land/house, any capital gains are yours?

Do you have any feel for costs of setting up this structure?

You're in the business Bert - I am back early Feb to hopefully nail down some property to build on later in the year. I intend to be in and out of Bali for the next fews years (work commitments elsewhere), but semi-retired within 5years. Which set up would you recommend?

Roy, this law puts land in your own (foreigners) name. Costs involved will be the same as for a buy-sell transaction. There have already several foreign people using this structure, one of them married to an Indonesian Notary. There have also been people breaking their "nameholder" contract to use this structure. Actually its a rather old law (1996) but since a few months notaries of Bali can use it.

the right of use with the right of proprietorship

You can use this just for ONE property.