Overview of Indonesian Land Laws

Freehold (Hak Milik)

The term for freehold title in Bahasa is Hak Milik, which is the highest form of legal land ownership in Indonesia.

The land at Masayu is in the form of Freehold (Hak Milik) land titles which will be issued in respect of each lot in the project and the common areas in the Masayu estate.

These titles will be sold in a sales package which includes:

  • Full service management package
  • Right to use common areas in the estate

Until now, however, non-Indonesian citizens cannot directly hold property in freehold format and thus suggested to secure the property in the form of leasehold, nominee structure, or corporate ownership.

Lease Hold (or Hak Sewa)

This is a contractual rental agreement between the land owner and the foreigner. The tenor could be as long as 25 to 30 years lease.

Nominee Structure

This is a contractual agreement between a foreigner and an Indonesian citizen whereby the foreigner nominate an Indonesian citizen to hold the Hak Milik / freehold title on his / her behalf.

Corporate ownership

Indonesian companies or foreign investment company incorporated in Indonesia (whether they are Indonesian-owned or are foreign owned or commonly called “PMA” company), is allowed to hold a ‘Right to Build’ title called Hak Guna Bangunan (HGB). Holder of HGB title has the right to hold the property under a right to use title (normally) granted for a period of 30 years with rights of extension (+20 + 30 years) - each extension will be subject to tax.

Notice: The above explanation is for information purposes only and it is recommended that you seek independent legal advice with regard to your plan purchase of Indonesian properties.

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