I'm not against the idea of expats living here in long-term accommodation. Far from it. What worries me is the tendency to advertise property here as "freehold", as if foreigners can buy property here in the same way as they can in their home country.
You can't. Not without tricky schemes involving local 'name-givers' and a contract which is questionable at best in the eyes of the law, may be unlawful under the Indonesian Constitution and has even resulted in some people losing their property.
I believe that long-term leasing is far safer - and it's legal.
(moderated)
Why you shouldn't buy a 'freehold' villa in Bali
borborigmus
13 September 2009 09:49:28
37
Fred
23 March 2022 04:52:57
27467
This is an old topic but the subject came up again recently, and the OP's warning is just as valid now as it was then.
Indonesian citizens and some foreign companies can own land, but foreigners can only lease or rent.
There are, as the OP stated, a good number of dodgy estate agents out there who will sell you property, and it's very possible you could lose it with zero compensation.
floaton
25 April 2022 05:30:28
60
Not completely true as a foreigner on a KITAS you can buy freehold just not for commercial purposes.
But then again as a foreigner you can't use it for commercial purposes anyways whether it is leasehold or freehold.
But then again as a foreigner you can't use it for commercial purposes anyways whether it is leasehold or freehold.
Fred
25 April 2022 09:06:40
27467
Not completely true as a foreigner on a KITAS you can buy freehold just not for commercial purposes.- @floaton
But then again as a foreigner you can't use it for commercial purposes anyways whether it is leasehold or freehold.
Not really so.
This dates back to the war of independence in 1945 when the Dutch tried to re-steal Indonesia.
Foreigners with an Indonesian spouse can sort of own land under certain conditions, and owners of PT PMA can do the same, but no other foreigners can legally do so. Foreigners can buy some types of flats but there are restrictions on them as well.
The expat risks confiscation of the lot without compensation, so it's a pretty big risk.
You will find a good number of agents selling land under 'nominee' schemes, but there's no way you can enforce the agreement in court if anything goes wrong because you would have to admit trying to break the law in order to do so.
No judge is going to enforce a dodgy contract when doing so means he's assisting you to commit an illegal act.
However, he would be within his rights to nullify the contract and return the land to the state.
A lease or rent agreement is fine.
floaton
25 April 2022 10:19:15
60
Fred
25 April 2022 11:04:23
27467
Not completely true as a foreigner on a KITAS you can buy freehold- @floaton
I must be clear - A foreigner on a KITAS can't own land in Indonesia.
There are schemes, workarounds, conversions to make a sale look like a lease, and likely a bunch of other dodgy messes out there but, when it boils down, all these are attempts to get around an unambiguous law so there is always the chance you'll lose the lot with no compensation.
Let's say you use a nominee- the nominee has his name on the papers so the law sees the land as his. You can't take it to court because it's illegal.
Convert to a lease - if the supposed owner decides to rip you off - tough - it's illegal
This is a rather extreme case, but not an isolated one
At the end of the day - Owning land is illegal so you risk losing the lot.
All these schemes are utter rubbish and, worse, dangerous rubbish that could well see you in serious trouble as well as losing your money.
DO NOT BUY LAND IN INDONESIA - IT'S ILLEGAL FOR MOST FOREIGNERS
floaton
27 April 2022 04:51:07
60
bennl
27 April 2022 10:59:04
176
hak pakai however is still not ownership, and therefore you also don't own the land, you only have the right of use.
Fred
27 April 2022 15:25:10
27467
PLEASE NOTE
Offering ways to attempt to break the law is not acceptable.
I'm well aware of the buy but pretend it's a lease scam, and how dangerous this is to expats who try it.
It goes like this - A lease is a lease in law, and that means it's covered by the laws concerning a lease. It also means the apparent Indonesian owner on paper has all the rights of an owner. If they decide to rip you off, you can't go to court to fix it because you have to admit a crime in order to do so.
A lot do it, but that doesn't mean it's either legal or a good idea.
End of the day - Trying to break the law is a very bad, and sometimes very expensive, idea.
Fred
28 April 2022 03:15:08
27467
This is really easy - Most foreigners can't own land in Indonesia.
If you try to claim bought land is a lease with a view to converting back to ownership in the future is illegal and you risk having the land confiscated with zero compensation, or worse.
Also, that mess of a silly idea means someone has to be listed as the owner - That leaves the expat open to a multitude of problems.
I keep hearing this is legal but it is not. However, many people are fooled into believing it is by dodgy estate agents.
This LINK is an example of one of these foolish nominee schemes going bad and the expat losing her life savings, but exactly the same can happen if the listed owner of an illegal lease conversion (and they are all illegal) decides to do the same to their mark.
Fred
28 April 2022 03:36:55
27467
I'm not against the idea of expats living here in long-term accommodation. Far from it. What worries me is the tendency to advertise property here as "freehold", as if foreigners can buy property here in the same way as they can in their home country.
........
- @borborigmus
I believe that long-term leasing is far safer - and it's legal.
The OP has this exactly right.
The law is very clear - Indonesian land can only be fully owned in the normally accepted way by Indonesian citizens . That means the land has to be registered to a WNI with their NIK.
Nominee and pretend lease schemes still require a registered land owner, and that has to be an Indonesian. If the "owner" wants you out, they can frame you with ease by hiring the local gangsters to make sure you get deported - You lose every penny you put into the thing.
A lease (Hak pakai) is fine as you only own the right to use the land but, anything you build might well be lost without compensation at the end of the lease.
You can, depending on the terms of the lease, sell it on for whatever you can get, but that value becomes limited as the term gets closer to its termination date.
Stick to the OP's advice or rent - These are the only sensible ways to do this.
Fred
29 April 2022 09:50:48
27467
Let's put this to bed
Undang-undang No. 11/2020
NOMOR 18 TAHUN 2021
FLATS can be owned by a foreigner (that's been the case for some years). These can only be bought in some areas, have minimum values, and foreigners have shared use rights for land they may be built on - They do not own the land.
Also mentioned are houses with land, but a foreigner only gets the right of use of the land - NOT ownership. Again, these are restricted as they are only available on government land in some areas, have minimum prices, and the house owner has no right to own the land.
Buying land for personal housing is illegal and there is no way to beat it without risking everything you put into it
I wonder if some dodgy sods are telling foreigners they can own any land that is for sale as long as they convert to a lease. If that is the case, I smell a potential scam where the foreigner is forced out and the land is taken over by whomever is listed as the owner.
Of course, it could just be as simple as a lying estate agent after money without a care if the buyer loses the lot, but I'm sure there aren't any heartless gits like that working in such a highly thought of profession.
Subscribe to this topic
Articles to help you in your expat project in Bali
Accommodation in Indonesia
Many of the expatriates living in Indonesia prefer renting accommodation owing to the generally limited ...
Accommodation in Bali
If you are planning to relocate to Bali, housing is a critical part of your project. So how to find your ...
Buying property in Bali
Should your experience as an expatriate in Bali make you want to settle down permanently, you might want ...
Buying property in Jakarta
When planning a move abroad, housing is a priority issue. If you expect to be away for a very long time ...
Popular neighbourhoods in Bali
Bali is regarded as one of Indonesia's smallest islands with a large population but is home to ...
Accommodation in Surabaya
Known as the "City of Heroes" in relation to where the struggle for Indonesian ...
Open a bank account that suits you
Discover the best international banks to manage your money securely.
"