In most countries, owning a unit in a multi-story building is a straightforward process. However, in Indonesia, you need a special permit to build or own a multi-story unit. This permit is known as the Hak Milik Atas Satuan Rumah Susun (HMSRS). This article explains what Hak Milik Atas Satuan Rumah Susun is in English and how foreigners can obtain the HMSRS land title.
What is Hak Milik Atas Satuan Rumah Susun (HMSRS)?
Hak Milik Atas Satuan Rumah Susun (HMSRS) is a land title that pertains to the right of ownership over a unit in a multi-story building. Included in the HMSRS is not only the individual right of ownership over the unit but also a common right to use the facilities of the building.
HMSRS is also known as the ‘strata title’, where each building unit is considered a separate property that different people and legal entities can own. Ownership over the unit, however, does not extend to the land. The land must remain under the Hak Milik (HM) title.
Who can obtain Hak Milik Atas Satuan Rumah Susun in Indonesia?
Individuals who buy and own an apartment unit in a multi-unit residential building must obtain the Hak Milik Atas Satuan Rumah Susun title. This title grants them full ownership rights over their unit within the condominium complex.
The HMSRS title is obtained through a legal process that involves registering the property ownership with the relevant government authorities. This process typically consists of the developer or the management of the condominium complex assisting the individual unit owners in obtaining their HMSRS titles.
Foreigners can obtain HMSRS, but only under the following conditions:
- The building must be classified as a strata title building. Not all residential buildings in Indonesia have this classification, so ensure that the property is eligible for foreign ownership.
- The foreigner must have a valid temporary residency permit (KITAS) or permanent residency permit (KITAP).
- The total area of foreign-owned units within a building or complex must not exceed 49% of the total floor area. This is known as the ‘foreign ownership quota’ and is designed to ensure that most units remain available for Indonesian citizens.
- Foreigners cannot own more than one unit in the same condominium complex.
It’s important to note that implementing these regulations can vary between different regions and local governments in Indonesia.
4 Steps to obtain Hak Milik Atas Satuan Rumah Susun (HMSRS)
Indonesian nationals and foreigners can buy property in Indonesia with Hak Milik Atas Satuan Rumah Susun in four steps.
Step 1: Find a unit in a multi-unit residential building
Regulations provide minimum prices on units purchased by foreigners depending on the area. These prices range from IDR 750 million ($48,750) to IDR 3 billion ($195,000). These units can cost a hefty amount, so it’s smart to work with a real estate agent who can help you find a suitable unit at an affordable price.
Step 2: Conduct due diligence
Once you find a suitable property, you must undergo due diligence. This is especially important in Indonesia. For an HMSRS title, checking the developer’s compliance with regulations is crucial. Always verify that the developer has the necessary building license, occupation permit, and separation deed. These documents are mandatory before a developer can issue an HMSRS title.
Step 3: Sign the purchase agreement
The seller and the buyer must enter into a purchase agreement containing all the terms and conditions, including payment of taxes. After signing the purchase agreement, the parties must submit the contract, seller’s land certificates, and other relevant documents to a land deed conveyancer (PPAT).
Step 4: Issuance and registration
Once the parties finally comply with all the payments and submission of documents required by the PPAT, the buyer and the seller will sign a land transfer deed. The PPAT would then register the land deed in the local land office and issue the buyer a Hak Milik Atas Satuan Rumah Susun certificate.
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Get help with buying property in Indonesia
While foreign ownership of land and property is generally restricted, a Hak Milik Atas Satuan Rumah Susun title is an exception. Obtaining an HMSRS for foreigners is a complex process that requires expertise to adhere to legal requirements. Working with professionals such as real estate agencies can simplify the process and help you own your first unit in Indonesia.
Frequently Asked Questions (FAQs)
What is the HGB title Indonesia?
HGB stands for Hak Guna Bangunan and is the title that confers to the owner the right to own and construct a building on a specific piece of land. The ownership of the HGB holder only extends to the building, not the ground.
Does Indonesia allow foreign ownership?
Yes, Indonesia allows foreign ownership of land. However, this does not extend to freehold titles. As such, foreigners can only buy land in Indonesia through a PT PMA and use the building under Hak Guna Bangunan or only under Hak Pakai (HP). It is also possible to buy land through a leasehold agreement.
What are the arrangements for foreign property ownership in Indonesia?
Foreigners can buy property in Indonesia, provided they comply with certain conditions. The most secure and legitimate methods are forming a PT PMA, signing a lease agreement, or obtaining a Hak Pakai or Hak Guna Bangunan title. Some choose to designate an Indonesian representative, but this can be legally complicated and lead to problems.