How to Apply Rights to Use Title for Your Land in Indonesia

Land and building ownership status for foreigners or foreign legal entities in Indonesia is limited to rights to use (Hak Pakai) and leasehold for a certain period of time, ownership rights for flats and apartments. Foreigners or foreign legal entities are not allowed to have property with freehold title (Hak Milik in Bahasa Indonesia), HGU (Hak Guna Usaha or Right to Cultivate) and HGB (Hak Guna Bangunan or Right to Build). This is stipulated in article 16 of Undang-Undang No 5/1960, Regulation on Basic Agrarian Principles.

Rights to Use Title: A Secure Option

While freehold title as full ownership is only available for Indonesian citizens, the Right of Use (Hak Pakai) title provides an excellent option for foreigners seeking a long-term residence in Indonesia, whether full-time or part-time. Foreigners in Indonesia can secure land or property through this type of ownership. This grants permission to utilize a specific land area for residential or commercial purposes.

The initial term typically lasts 25-30 years, with the possibility of extension for a longer-term investment. All with minimal tax implications upon renewal. This provision applies as long as the foreigner still has a stay permit in the country. If the foreigner dies, the property can be inherited. If the heir is a foreigner too, then the heir must also have a residence permit in Indonesia.

Applying Rights to Use Title for Your Property

The Ministry of Agrarian Spatial Planning / National Land Agency (ATR/BPN) website outlines the process for foreigners to obtain a Right of Use title for their property or land in Indonesia. Some steps of the application process are:

1.  Preparing the Required Documents:

–          Signed application form with applicant’s ID copy.

–           Copy of valid stay permit and power of attorney (if applicable).

–          Proof of land acquisition/rights.

–          Current land and building tax payment copy.

–          Proof of Acquisition Duty and payment receipt.

–          Tax payment slip.

2. Document verification: BPN verifies your documents and may request adjustments. If approved, proceed to the measurement fee payment counter.

3. Measurement: After the process of document verification is completed, there will be land measurements carried out by BPN staff. However, the applicant must accompany the staff when the measures take place.

4.  Certificate Collection: Collect your original land certificate at the designated counter. Processing time takes a maximum of 97 days, with variations based on land area:  

Costs Associated with Rights to Use Title

Obtaining a Right of Use certificate involves several fees, including application fees, measurement fees, and potential taxes. The initial registration fee is relatively low (usually about IDR 50 thousands). As the application process continues, measurement fees can vary based on land size, function, and location. 

For example, measurement for 200 square meters of non-agricultural land plot area in Bali cost around IDR 120,000. However it’s recommended to consult with your real estate consultant or the BPN office for a more accurate estimate of total costs associated with your specific property.

Don’t forget your receipt. To ensure a smooth collection process, remember to bring the original copies of your payment receipts when picking up your Right of Use certificate. This final step verifies that all associated fees have been settled, allowing BPN to confidently release the official document to you.  

Experience a Seamless Ownership Journey 

Partnering with skilled and experienced real estate consultants like Seven Stones Indonesia might unlock a multitude of benefits for your successful property purchase in Indonesia. We will act as your expert guide because we comprehend each step to obtain legal documents. Additionally, we overcome any communication gaps and foster smooth interactions with the authorities.

Let our experienced agents connect you with the right property and guide you through every step of the process, ensuring a stress-free ownership experience. Contact Seven Stones Indonesia today to discuss your needs, take the first step making your property dream comes true.  You have burning questions about the real estate market in Indonesia? Don’t hesitate to ask via hello@sevenstonesindonesia.com or text us at +62 877-7711-7701. Our team will be ready to help.