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Types of Freehold · Only Indonesian citizens can own freehold land with Hak Milik Certificate (Deed). · Important to do detailed due diligence report with professional (1% to 3 %). · Buyers tax 5 %, Sellers Tax 5 % Notaries & Legal 1% to 3 %. · There have been laws passed allowing foreigners to own certain apartments with many restrictions. In the near future many believe that foreigners will be able to purchase freehold land. Freehold purchased with PMA · 100 % foreign owned PMA Company can own title but not Hak Milik only Hak Guna Bangunan. · Can convert back to Hak Milik and sell as freehold in future. · $7,000 to $ 10,000 to start PMA + Legal Fees. Therefore only utilized with large purchases Freehold purchased with Nominee · Nominee can be any Indonesian. Prefer single male. · Pay Small Fee. Usually ( $500.00 to $1,000) · Foreigner holds Hak Milik Certificate (Deed). · Mortgage on Land in foreigners name listed on certificate to prevent reissue of deed. · Irrevocable Power of attorney allowing foreigners to sell without nominee´s approval. · Buyers tax 5 % Sellers Tax 5 % Notaries & Legal 1% to 3 % Leasehold · Foreigner can lease land for up to 30 years consecutively up to 90 years. · Can have option to renew for additional thirty years. · Should lock in renewal term and price with Notarized agreement. · Can sub lease or re-sell lease. · Not grey area, legal and binding. · Notaries´ fees and taxes usually include in purchase price. Disclaimer: Foreigners should consult a Legal attorney or qualified Business consultant to discuss the best method. Hak Pakai - Right of use Simple Explanation of Hak Pakai: · Hak Pakai means the right of use over land, either state-owned or private, which gives the holder the right to use and obtain a parcel of land. · Law PP 40/1997 states that the initial period for right of use is not to exceed 25 years but can be extended for another 20 to 25 years or even indefinitely if the land is still in use for a certain reason/purpose (i.e. use of buildings). · Right of Use may be owned by resident foreigners, and/or foreign companies that have a representative office in · The Foreigners names are documented on the actual land certificate. This option would mean that you eliminate participation of an Indonesian nominee. The land is documented in your own name. · The renewal costs are calculated at 2% of the taxable value of the land, this can be confirmed upon review of the NGOP document. · The land must hold a building permit, foreigners can only have one parcel of land registered under the Hak Pakai status, and foreigners are officially required to have a KITAS (residential visa) although Hak Pakai for foreigners in the past have been processed who do not hold a KITAS visa. · Must contribute to the national development, i.e. have economic interests in · Can convert back to a Hak Milik and sell as freehold at the current market price. Estimated Costs: The costs to convert an existing freehold land certificate (Hak Milik) to Hak Pakai (Right of use) are: · BPN (Building Permit Office) Land Office approximately Rp.20.000.000 per 200 m 2 in the Badung area (in other regions we would have to submit an inquiry with the regional BPN office. · Notary fee: 1% of sale value ( real price) · 5% of the Land Value (Buyer tax) - minimize price · 5% of the Land Value (Seller tax) - minimize price · BBE service for co-ordination of Hak Pakai: Rp.10.000.000 Disclaimer: We do not guarantee the above information or the future value of any Indonesian real estate. Foreigners should consult a Legal attorney or qualified Business consultant to discuss the best method. We also recommend that you complete detailed due-diligence on any Indonesian property before purchase. |