Understanding property Titles in Indonesia and what is needed
It can be daunting when you first venture into the possibility of owning property in Bali, but rest assured we have you covered. Anything from Leasehold to Right to Build, discover the different types of property ownership in Bali and what they mean for foreign buyers
Leasehold (Hak Sewa): This is the most common transactions foreign investors do
Any type of VISA, including Tourist Visa is the only requirement (PS. And money in the bank)
Property rights are defined on a notarized agreement done by a Authorised legal notary here in Bali
Right to Build (Hak Guna Bangunan/HGB):
Need to have a PT PMA company to acquire this tile
Need a KITAS/Residence permit
Right to Use (Hak Pakai):
Need KITAS/Residence permit
Can only buy a single property per title
Right to Own (Hak Milik): Most common ownership title for Indonesian nationals
Only eligible for Indonesian citizen
Leasehold (Hak Sewa) :
Leasehold properties in Bali, can be leased with any kind of Visa, including a tourist Visa. Unlike other forms of property ownership, leasehold doesn't require foreign nationals to register a company or obtain a residence permit in Indonesia. This makes the process much more accessible and straightforward.
Leasehold ownership titles grant the purchaser full control over the property for a specified amount of time (ie. The lease terms that left on the contact) Can be anything from as little as 10 Years – 50 Years depending on the villa, its location and age of the property. This flexibility, attractive price, and ease of acquiring a leasehold property have made it a popular choice for foreigners looking to invest in Bali's vibrant property market.
Right to Build (Hak Guna Bangunan/HGB)
If you are considering acquiring a freehold property in Bali through a foreign-owned company, known as a PT. PMA (Perseroan Terbatas Penanaman Modal Asing), a specific visa is required.
The title allows you to fully own property for up to 70 years. The 70 years comprises of
- 30 years of initial validity + 20 years of extension + 20 years of renewal.
The good thing about this title is you can pass the title to another company or sell it to Indonesian nationals and convert the HGB title to the Hak Milik title, which makes the property remains highly valuable to Indonesian nationals. With this title you also able to purchase more than one property and use them as businesses.
You have to register a new PT PMA or acquire an existing one, you can set up a 100% foreign-owned PT PMA You can acquire property in the name of your PT PMA immediately after the company’s Articles of Association have been approved and the company’s tax card has been issued which usually takes around 2-3 weeks.
You must obtain a specific visa called a "KITAS" (Kartu Izin Tinggal Terbatas), which is a limited stay permit. It is important to note that the process of obtaining a KITAS can be more complex and time-consuming compared to leasehold properties. Working with a reputable legal and consulting firm specializing in foreign investments can greatly assist you in navigating through the necessary procedures and requirements. That’s where BVR legal will step in and make this process simple and smooth
Right to Use (Hak Pakai)
The Hak Pakai title has some similarities to HGB. Those similarities include:
Foreigners need to have a residence permit/KITAS.
Ownership validity of up to 70 years, comprises 30 years of initial validity + 20 years of extension + 20 years of renewal.
Family can inherit the title
Can be sold to Indonesian nationals and converted to Right to Own title (Hak Milik)
Besides those similarities, the Hak Pakai title doesn’t require you to own a PT PMA and can be bought individually. However, several limitations made many foreigners not choose this title:
Hak Pakai title only let you own land that has a building on it.
Limitations to operating as a business
A minimum property value of 5 billion rupiahs for a building built on land, and 2 billion rupiahs for an apartment.
Can only buy a single property.
Right to Own (Hak Milik)
Right to Own is the strongest property title that people can have over land in Indonesia, and this is what most Indonesian Nationals purchase
A Hak Milik title can be transferred to another party through inheritance or purchase. However, Hak Milik is only owned by Indonesian citizens and legal entities that have met the requirements.
Now that we have explained the differences, should you wish to learn more, contact BVR property today and chat with one of our team members.