Australian owning Property in Bali

Fred wrote:

A foreigner can't own land - full stop
A local woman, married to a foreigner can but only if they have a pre nup stating he has no claim to the property.

All this stuff about agents, someone owning the land in your name and so on is open to you losing the lot.
Some agents claim to be able to legally sell to expats - they all share one thing in common - They lie a lot.

spot on it is illegal  to buy here ,

Bali Property Group wrote:

Really people, get yourself a good agency that will provide the legal assistance with the right notary and its safe to buy property in Bali, even on your own name if u like, up to 20 are of land u can have on your own name, no name holders, no expensive lease holds, just hak milik, freehold land on your name.
gr. Mark

It is illegal !

powerof2 wrote:

Hello Matt,
My husband and I lived in Bali for two years, and while there we purchased a villa.  You would have to use a nominee, and also a notary

This illegal activity could see the buyer lose every penny they bought it for.

http://indonesiaexpat.biz/featured/fore … indonesia/

“It is absolutely not allowed for [a] foreigner to own a single inch of land in Indonesia. This is as stipulated by the National Constitution,” the minister told reporters in early March. He went on to highlight that the survey and inventorying of land ‘owned' by foreigners must be conducted to verify that there is no land in Indonesia controlled by outsiders. Much of this stems from what Baldan views as the widespread use of Indonesian nominees to acquire land.......
....“There's no need for sanctions, we will just divert possession of the land. We will ask if he has an Indonesian wife and divert the land to her. But, if he doesn't have an Indonesian wife, then the land will be taken by the state.”

It was always dodgy (or just plain illegal), but now it's being looked at closely, especially on the resort islands.



.

Where did that erroneous quote from The Bali Property Group come from? 

I'm thinking it's time for my brother in law to pay them a visit.   

"I'm going to make him an offer he can't refuse." Don Ubudian. Let's hope no one is missing a horse over this....

  Luke.

Horse meat makes better sate than dog meat.   

RhysG wrote:

Non-Indonesians can legally acquire property in Indonesia and enjoy full beneficial rights. This is done using one of two methods: by a nominee arrangement or by way of an Indonesian foreign owned company (PMA).

With the nominee method, an Indonesian citizen is nominated to buy the land on behalf of the foreign purchaser. Land title deeds will therefore be in the name of the Indonesian nominee. The notary/PPAT handling the land sale and transfer will simultaneously draw up a power of attorney document giving the foreign purchaser total and exclusive authority to utilise, sell, transfer or lease the land, without any reference whatsoever from the nominee, along with a statement (loan agreement) declaring that the money used to buy the land belongs to the foreign purchaser and not to the nominee.

The power of attorney must give the foreign party full beneficial rights on the property and must waive all rights of the nominee. The foreign party is then free to build on the land, sell or lease the property and transfer the title to next of kin. Often, the nominee will receive a nominal fee for his/her responsibilities as the title holder.

The second method is to form a foreign investment company (Penanaman Modal Asing, PMA). A foreigner can fully control a PMA company and the title of the property will be in the company's name in the form of a right to build (Hak Guna Bangunan, HGB). The HGB expires after 30 years and can be renewed several times. However, there are tax implications to be considered, and the Department of Trade will review PMA companies after 30 years, so it may be necessary to re-apply for the PMA licence

[Moderated: no free ads please]

nominee system is illegal

It isn't so much that the nominee method is “illegal” as there is no law specifically prohibiting this approach, rather, it is the current interpretation of already existing land laws which is the issue.  Specifically this has to do with the irrevocable power of attorney to the foreigner which is now interpreted as granting “powers” to the foreigner regarding land that are reserved solely for Indonesian citizens.  And, there is also the tax issue, which in some minds is the driving motivator behind current interpretation and the “letter of the law” as they apply to land ownership. 

In reality, it's a combination of both factors…one being the keen interest in preserving ancestral lands for citizens, the other being the keen interest by the government in increasing tax revenues. 

The bottom line regarding the “nominee scheme” is that the foreign has virtually NO protection in a court of law should the Indonesian nominee decide to be less than trustworthy, and this is fact, regardless of the existence of a POA or not.  There are no cases where a foreigner has won in court in this sort of dispute. 

Regarding land “ownership” by way of a PMA, the regulated limits of foreign ownership in a given PMA varies by the type of business.  Moreover, a PMA cannot be established, and will not be recognized if it is determined that the primary reason behind the PMA is the “purchase” of land.  And, there are also the very high fees and minimum investment required to establish a PMA which needs to be considered as well.  The use of a PMA to get around land laws in Indonesia is not a viable alternative. 

Using a solid and court tested Hak Pakai (or other form of lease) is the most safe structure in place for foreigners to enjoy all the benefits of land “ownership” for a period of up to 50 years.  Just be sure to use an attorney, and not simply rely on a notaris.  Considering the very high amounts of money involved, this is no time to be “penny wise and pound foolish.”

Ubudian wrote:

Where did that erroneous quote from The Bali Property Group come from? 

I'm thinking it's time for my brother in law to pay them a visit.   

They were on page one, but probably disappeared by now for offering dodgy services.
If the authorities do wander round to their gaff, no worries for me as it might save an expat or two from losing their cash.

"If the authorities do wander round to their gaff, no worries for me as it might save an expat or two from losing their cash."

according to the minister of land and agriculture , the nominee system is illegal , all properties with this agreement are being collated and according to aforementioned minister , will be forced to sell within 1 year , if not sold will be taken by the state with no compensation . , this news was  published a couple of months ago , personally im sure the courts would rule in favor of the government rather than some misled unfortunate expat !

FYI "What does this mean for expats who do own property via a nominee?

For expatriates who have purchased property through an Indonesian nominee, these surveys may leave them exposed to a possible change in ownership if the BPN is to follow through with its plan. When asked what sanctions would be placed on those found to illegally own land, Baldan replied:

“There's no need for sanctions, we will just divert possession of the land. We will ask if he has an Indonesian wife and divert the land to her. But, if he doesn't have an Indonesian wife, then the land will be taken by the state.”
- See more at: http://indonesiaexpat.biz/featured/fore … s3UIP.dpuf

Absolutely correct tel522, these old nominee schemes are now under the microscope (most particularly in Bali, but also Java), and any foreigner who still has “their” land under such a scheme is at great risk at this time to forfeit their entire investment. 

The “elephant in the room” that we have yet to discuss is the fact that more and more Indonesians, who some time ago engaged in such “contracts” with foreigners, are becoming increasingly aware of the change of interpretation of such schemes by the government.

Greed, or the visceral image of countless 8 inch stacks of IDR 100k notes on the table can do amazing things to an Indonesian…and why not?  They are, after all, only human.

Anyone reading this thread who is still on an old nominee scheme would be very, very wise to re-work their deal as soon as possible.  And, in that deal, it would also be very wise to “to take care” of their current nominee.

Dear Sir would you mind answering a question based on these circumstances.
I married a Balinese women in the UK and then later found out about the Prenup issues. To this end we have specifically not registered our marriage in Indonesia. But being a good husband i wanted to buy my wife a home. Purchase price 1.7 billion. My wife has paid 600 million deposit and has waited eight months because according to the notaris the land title needed renewing.

Now the Notaris is ready to complete the sale but has stated my wifes fees total 200 million which is 14%. I believe she is being ripped off, the published fees should amount to no more than 7.6% even if the lawyer charges the maximum. I am sure the seller has spent her deposit. As it stands these fees are rediculous and would negate any value increases. Any advice please on which Notaris she should try.

Kind Regards

Mark Chambers

This needs checking to make sure it's correct, but I understand a post-nup agreement can now be taken out, that clearing you from any potential legal issues about the land.
If the notaris is charging more than his stated fees, you have him bang to rights so push a lot, as long as you can prove he's overcharging.

Fred thanks.
Indo still does not recognise post nups but does recognise seperation of assets (from my perspective matters neither way as i will own squat).

Was told today the additional 80 million is to cover deed name update but this i bull, looks like everyman and his dog is in on it. The name change is covered by the 0.2% charge for registration fee. The lawyer can charge 0.5-1.5% so expecting them to charge the most.

Based on these fees nothing would sell. Time the buyer and seller have spent nearly 25% of the value on fees, why would they not just keep the cash.

But more importantly what can we do about this issue of unjustifiable fees.

Thank you

Mark

Check with the local office and ask how much the official fee is.

However, you do have a serious problem in that without the prenup your purchase could be deemed illegal, that meaning you could lose the lot if you push too hard and upset the wrong people.
Saying that, assuming the notaris is aware you're married without a prenup, he's contributing to an illegal act himself.

I agree, I have few friends..German and Swiss, that been successfully owning property, HomeStay..etc and NO problems in the last 7 years, Nominees do get compensated, 1-2% of the property price some got payed. As safe bet, keep the land title doc with you, without no can sell the land, as I understand it it's almost impossible to issue a new land title

Cheers

This price could also include the Tax BPHTB which could be about 82 million (if you didn't put it down as lower price), keep in mind Notaries are much more expensive in tourist areas of Indonesia..

Cheers

The problem is not to know if you have friend who bought land ,the problem is to know if it s legal.
the respond is NO AND NO
Use a nominee in indonesia to buy land is ILLEGAL.
use a PT PMA to buy a land is LEGAL
that's it ,
after that they are some peoples whom take a risk to buy with nominee.
what happens tomorrow if the nominee die?
what happens if you have a problem with your nominee?
what happens if your nominee have bankrupt?
all the paper you ll sign with nominee have no value front of a judge.

I do agree Karim that it could be illegal as many other things foreigners do that can be illegal (like having a girlfriend), I my self will not do it and be able to sleep well at night, however the people I know owning property in Lombok been ok with it...so far, will never know how it will be in the future...could it be different in Bali..?? not sure

Laithn wrote:

I agree, I have few friends..German and Swiss, that been successfully owning property, HomeStay..etc and NO problems in the last 7 years, Nominees do get compensated, 1-2% of the property price some got payed. As safe bet, keep the land title doc with you, without no can sell the land, as I understand it it's almost impossible to issue a new land title

Cheers

Only because they haven't been caught. These deals are dodgy at best and illegal at worse, either way leading to possible confiscation of the land with no compensation.

http://www.balidiscovery.com/messages/m … p?Id=11646

In Bali and Lombok many foreigners control land through nominee landowners, using legally questionable powers of attorneys and fictive mortgage agreements. The Minister's statement has many in the property sector concerned that land could be confiscated by the State or documents used to establish illegitimate foreign control of land declared invalid. The latter could create a windfall for the nominee who would then be established as the sole and rightful owner of the land.

When Ferry was asked what sanctions can be imposed on foreign nationals known to illegally own land in Indonesia, the Minister replied “there is no sanction.”

“There's no need for sanctions, we will just divert possession of the land. We will ask if he has an Indonesian wife and divert the land to her. But, if he doesn't have an Indonesian wife, then the land will be taken by the State,” Ferry explained.

Then, to make things worse, you have to remember these deals are dodgy, so dodgy people get involved in them. Fancy losing all you cash?
https://www.baliexpat.com/how-one-prope … bly-wrong/

Do you need more?
https://www.smh.com.au/world/a-nightmar … i8lrr.html

Easy - When you deal with people willing to break the law, don't be surprised when they rip you off.

Karim bali wrote:

all the paper you ll sign with nominee have no value front of a judge.

I've edited this post to make the point as forcefully as I can

The nominee contract is so much toilet paper as you can't really go to an Indonesian court and ask them to enforce an illegal contract intended to allow an illegal act.

These are often big money deals, but done with tiny brains.

Hi

Wondering if anyone out there is currently leasing a property in Bali. Would love to connect to learn more. We're considering it or looking at options in sharing a lease with other aussies. Thanks.

I purchased a house with my Balinese wife in Bali. I signed a prenup agreement to ensure I did not complicate the purchase (I can understand not owning the land, but don't understand why not the building as in Thailand). 13 months has now lapsed and we still don't have the deeds, we have paid all the taxes associated with the purchase. I am worried the sellers certificate was fake and the lawyer useless. How do we proceed

Did you already check the dokument in BPN?
Did you check who pay the PBB?
Normaly the notary have to check ,original certificat,pbb,ktp,kk,and BPN

Hi Karim, nearly all these activities were left to my wife, other than my visit to sign a prenup agreement. The purchase has been going on now since mid 2016. Initially we were told the old deed needing renewing to a new format and only after that could the title transfer take place. That took place July 2016- June 2017, we then paid a 600 million deposit (again worrying if the seller died). After the new deed came back we paid the remaining 1.2 billion. We paid BPHTB was 80+ million and t
5% (again should be 1-2.5%) to the lawyer which is an incredible charge rate. We also paid PBB. I know we paid to much tax based on what I have read, we appeared to have PAID the sellers tax also. The purchase was f
an acquaintance of my father in law who should have received a commission from the seller but was reneged.
Live and learn but the system is rotten when you can't trust the lawyers. (God what am a saying, trust a lawyer). But excusing my waffle above, still no deed.

For sure your lawyer is a crook,5% it s too much.
But you never talked about the notary,did you use a notary?

Hi Karim, yes we have used a Notaris for all the transactions.