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What is Hak Milik (HM) and how does it work?

what is hak milik

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When researching the Indonesian real estate market, you will likely come across the term Hak Milik (HM). This title is highly valued and essential for property ownership in Indonesia. However, not everyone is eligible for the HM title, as specific requirements must be met before applying.

What is Hak Milik?

Hak Milik, also known as Sertifikat Hak Milik (SHM), is Indonesia’s highest form of property ownership. It means ‘Right to Own’ and is registered as a land title with the National Land Agency and is similar to a freehold title. Unlike other land ownership titles in Indonesia, Hak Milik has no time limit and can be transferred freely to those eligible. The HM title can also be used as collateral.

Only Indonesian nationals and some legal entities under Indonesian law can hold the SHM title. It’s important to know that an Indonesian PT or PMA can’t obtain the HM title.

Can foreigners buy Hak Milik property in Indonesia?

Foreigners can’t buy property under the Hak Milik title in Indonesia. According to Basic Agrarian Law No. 5/1960, only Indonesian nationals and some Indonesian entities can hold property under the Hak Milik title. This indirectly means foreigners can’t buy freehold property in Indonesia. Instead, foreigners can purchase Indonesian property in several other ways:

  • Hak Pakai (HP): Foreigners can buy property in Indonesia under a Hak Pakai title, but only if certain conditions are met, such as meeting investment standards and possessing a valid work permit. Not all properties are eligible for this type of title.
  • Hak Guna Bangunan (HGB): The Hak Guna Bangunan title allows legal entities to own a building on Indonesian land for up to 80 years. Requirements must be met to obtain the title.
  • Leasehold: Foreigners often use leasehold agreements to buy property, which grants them a long-term lease of land and buildings for up to 25 years. It’s a popular option for both residential and commercial purposes, especially for individuals and PT PMAs.
  • PT PMA: Invest in Indonesian property through a foreign-owned company called PT PMA. This allows foreigners to obtain a temporary stay permit valid for two years.
  • Passport: A foreigner can buy a property with only their passport if they meet the required minimum capital investment.

Buy property in Indonesia with Own Property Abroad

Do you want to buy property in Indonesia? Own Property Abroad can assist you and ensure a seamless and hassle-free property journey. Thanks to our extensive knowledge and local experience in the Indonesian market, we can help with legal requirements, finding suitable properties, negotiating the best deals, and conducting due diligence.

With our expert team, you won’t have to navigate the complexities of the Indonesian market alone. For further information on how we can assist you, kindly drop your details below or email us at [email protected]. Let’s start working on your property success story today!

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Frequently Asked Questions (FAQs)

What is sertifikat Hak Milik in English?

The meaning of sertifikat Hak Milik (SHM) in English is ‘certificate right to own’ and is a property freehold title in Indonesia. This title, also known as HM, gives the owner complete ownership over the land or building.

How to apply for Hak Milik?

Indonesian nationals can apply for Hak Milik by registering a property under the HM title at the National Land Agency. Foreigners can’t apply for Hak Milik.

Is it possible to transfer Hak Milik to Hak Guna Bangunan?

It’s possible to transfer Hak Milik to Hak Guna Bangunan if the land or property is bought by a business entity, such as a PT PMA. The land title change must be registered at the National Land Agency.

Your guide to buying property in Indonesia

Written by Matt Timmermans

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