Many foreigners are interested in buying a Hak Pakai villa in Bali or a Hak Pakai apartment in Jakarta. Hak Pakai (HP) is a type of property ownership that allows foreigners to own property in Indonesia. However, to obtain Hak Pakai in Indonesia, foreign nationals (WNA) must meet specific requirements before buying HP property in Indonesia.
What is Hak Pakai?
Hak Pakai, also known as Sertifikat Hak Pakai, means Right to Use and gives Indonesian and foreign individuals the right to use a property. In most cases, Hak Pakai is used by foreigners who reside in Indonesia (with KITAS, KITAP, or Second Home Visa), as it gives them the chance to buy a property in Indonesia that was initially owned by an Indonesian national through Hak Milik (HM).
Hak Milik is the highest form of property ownership that can only be obtained by Indonesian nationals. If the Indonesian national wants to sell their property to a foreigner, the title must be converted to Hak Pakai if the property is eligible to be sold with an HP title. After converting the title, the Indonesian national doesn’t hold the Hak Pakai; instead, it’s transferred to the foreign buyer.
The HP title can be obtained for a house, an apartment, or land. However, it’s essential to adhere to the local regulations and requirements, as each region in Indonesia has its own rules for Hak Pakai. Not all real estate properties can be sold with an HP certificate.
Hak Pakai validity
Under new Hak Pakai rules, the validity of the title is for an initial period of 30 years and can be extended for another 20 or 30 years as long as it does not exceed an aggregate total of 80 years. Once the 80 years have expired, one can apply for a new HP certificate or convert it to another type of title. If not extended or converted, the property reverts to the original landowner or the state.
The Hak Pakai property can be sold or transferred to another eligible foreigner if the title is still valid. However, once the period is over without renewal, the owner loses the right to the property.
Hak Pakai requirements and rules
The Indonesian government has set several rules and requirements for Hak Pakai:
- Only foreigners who officially reside in Indonesia can buy a property through HP, meaning they need a KITAS, KITAP, or Second Home Visa ITAS.
- The house, villa, land, or apartment needs to be eligible for Hak Pakai, as you can not apply for an HP title on all properties in Indonesia.
- Foreigners can only hold one property through Hak Pakai, which can only be used for residence. Commercial activities are allowed.
Working with a real estate expert in Indonesia will ensure a smooth application or use of Hak Pakai.
Can foreigners buy Hak Pakai property in Bali?
Foreigners can buy Hak Pakai property in Bali. However, not all properties are eligible for Hak Pakai, as the government has rules and regulations to protect its local real estate market. Always ensure the property you want to buy in Bali is eligible for an HP title.
Many foreign nationals who buy Hak Pakai property in Bali opt for the Second Home Visa ITAS, which allows them to stay in Indonesia for 5 or 10 years. To be eligible for the Second Home Visa, one must show proof of funds of at least IDR 2 billion ($122,000) in an Indonesian bank account or proof of ownership of luxury real estate in Indonesia, owned with Hak Pakai. Luxury real estate in Bali must have a minimum value of IDR 5 billion ($305,000). In contrast, luxury real estate in other parts of Indonesia must have a minimum value of at least IDR 2 billion ($122,000).
How do you apply for a Hak Pakai title?
Foreigners can buy a property that already has an HP title. If the property is eligible for Hak Pakai but doesn’t yet have this title, the foreign buyer can register the property with an HP title at the Indonesian National Land Office, locally called Badan Pertanahan Nasional (BPN).
BPN will issue the HP certificate to the foreigner. Legal or real estate agents can help to obtain the HP title. In most cases, the parties involved must agree on how extensively the land will be utilized before moving forward.
- Determine eligibility: Ensure that you meet the eligibility criteria for the HP title. This right is typically available to foreign individuals holding a residency permit.
- Consult a notary or legal professional: Engage the services of a notary or legal professional who is experienced in handling land-related matters in Indonesia. They can guide you through the application process, explain the requirements, and help prepare the necessary documents.
- Documentation: Prepare the required documents, which may include:
- Application letter requesting the HP title.
- Copy of your valid passport.
- Marriage certificate (if applicable).
- Copy of your Indonesian spouse’s identity card (KTP) or other supporting documents (if applicable).
- Land certificates or other land-related documents.
- Proof of payment for Hak Pakai application fees.
- Application submission: Apply and all supporting documents to the National Land Agency office in the region where the land is located. The BPN will review the application and conduct the necessary verification process.
- Verification and approval: The BPN will evaluate your application, conduct a land survey if required, and verify the information provided. You will be issued a Hak Pakai certificate if your application is approved.
- Registration and notarization: Register the Hak Pakai certificate with the relevant land office (Kantor Pertanahan) and have the transaction notarized by a notary public.
Applying for Hak Pakai is complex, especially for foreigners. Therefore, it is recommended that you use an agency to help with your HP application.
Can foreigners or PT PMAs buy a property with Hak Pakai?
Hak Pakai is one of the ways foreigners can own property in Indonesia. This type of ownership is not the same as Hak Milik, which can only be obtained by Indonesian nationals, but gives foreigners the right to use land or property in Indonesia for a specific period. Some restrictions and regulations exist for individuals who want to buy Hak Pakai property. For example, they need a valid residency permit, such as KITAS or KITAP, or can obtain a Second Home Visa after buying HP property.
PT PMAs can not buy Hak Pakai property, as this property title is only available to individuals. Instead, legal entities such as a PT PMA or representative office (KPPA) can own land or property under Hak Guna Bangunan (Right to Build) or Hak Guna Usaha (Right to Cultivate), depending on the nature of its business.
Need help buying property in Indonesia?
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Frequently Asked Questions (FAQs)
What is Hak Pakai property in Bali?
Hak Pakai property in Bali is a property that holds an HP title and is eligible to be bought by foreigners who meet the requirements. It’s essential to conduct thorough research before buying property, as not all properties in Indonesia can be purchased with Hak Pakai.
What does Hak Sewa mean?
Hak Sewa is the local title for a leasehold in Indonesia. It is close to a standard rental agreement and can last as long as 25 years, which is extendable.
What is the difference between leasehold and freehold in Bali?
The difference between leasehold and freehold is that freehold ownership gives exclusive and absolute ownership over the property, while leasehold ownership lets you lease the property for a specified period. Only Indonesian nationals can own freehold titles (Hak Milik), while Indonesians and foreigners can invest in leaseholds in Bali.
Hak Pakai vs. Hak Guna Bangunan?
Hak Pakai is a Right to Use title in Indonesia allowing individual foreigners to use land or property for a specified period. In contrast, Hak Guna Bangunan is a Right to Build title, permitting entities, such as PT PMAs or KPPAs, to construct and own buildings on land for a particular duration.
For how long is Hak Pakai valid?
Hak Pakai is valid for an initial period of 30 years and can be extended for another 20 or 30 years up to 80 years. You can apply for a new HP certificate if the 80 years have expired.
Can a PT PMA buy a Hak Pakai property in Bali?
No, a PT PMA can not buy a Hak Pakai property in Bali or other Indonesian regions and cities, as the HP title is meant for residential purposes. Foreign individuals can buy Hak Pakai property in Bali if they meet all the requirements and can only own one HP title in their name.
