Indonesian Property / Land Ownership & Use Laws

The following laws are those bantered around and misquoted by so called real estate companies in Bali with regard to foreign ownership / control over villas on the island. However, the following English interpretations below come not from a villa sales site but from people like a recognized leader in insolvency issues (Insolvency Asia); that is, people who know and report the true law.

Hak Milik (ownership)
This title is the most complete form of ownership of land in Indonesia. The holder can use the land for any purpose whatsoever, including housing. The title may only be held by individuals of Indonesian nationality and special legal bodies stipulated in Govt. Reg No. 38 of 1963 Regarding the Appointment of Indonesian Legal Entities Which May Obtain Land with a Right of Ownership (June 9, 1963). These legal entities are govt banks, cooperatives, religious and social bodies. Consequently, Indonesian legal entities, foreigners and foreign legal entities cannot obtain land with a Hak Milik title

Hak Pakai (right to use)
This right gives the holder the right to use a plot of land and obtain the produce from such land. Land on which a Hak Pakai can be bestowed includes state land, land under a Hak Pengelolaan title and land under an Hak Milik title. This right can be held by Indonesian citizens, Indonesian legal entities (including Foreign Capital Investment Companies or “PMA’s”), and by both resident foreigners and foreign companies with representatives in Indonesia. The duration of a Hak Pakai is for 25 years* and may be extended for a further 20 years* or for an unlimited time, depending on the project concerned.

Hak Guna Bangunan (right to build)
The holder of this title is entitled to erect buildings on the land. The title is granted for an initial period of 30 years*, which may be extended for a further 20 years* and thereafter can be renewed, as long as the use of the land is in accordance with applicable zoning regulations. Indonesian individuals and Indonesian legal entities, including “PMA’s”, may hold this title. NB: Duration* times may now vary