Differences between the two types of Expatriate Property Ownership Rights in Indonesia

Expatriates have two main types Property Ownership in Indonesia. Hak Pakai (Right to Use) or Hak Guna Bangunan (Right To Build). Here is a summary of the main differences between these two types of Property Ownership.

Title

The title for Hak Pakai can be held in an expatriate’s name; for Hak Guna Bangunan this can be held in an Indonesian Citizens name or in the name of a company which is legally registered in Indonesia.

Period

Both Hak Pakai and Hak Guna Bangunan can be held for an initial period of 30 years, renewed for a further 20 years and reregistered for a further 30 years.

Inheritance

Both property types of property titles can be passed on to the owners Heirs. In the case of Hak Pakai, if the benefactor is not resident in Indonesia, he/she will have 1 year within which to transfer / sell the property.

Mortgage

A Hak Guna Bangun title can be used as security on a debt, Hak Pakai cannot be used as security.

Size

Hak Pakai Titles are limited to 20Are, except if there is approval from the Government in exceptional circumstance which would allow benefits for the community.

Purpose

Hak Guna Bungan can be used for business purposes (ie can have a business registered at the property. Hak Pakai Titles are for residential purposes only.

Price

Hak Pakai titles have a minimum price associated with them; this is determined by the province in which the property is located. Currently (October 2018); the minimum price for Bali is Rp. 5.000.000.000 for houses.

Other

There are further requirements that a property registered as Hak Guna Bangunan must adhere to. These vary based on the Regency and Province.

This summary is meant as a general guide to the two different property ownership titles available to expatriates in Indonesia. The information is not exhaustive and is meant only as a guide.

Please get in touch with us for more detailed information on your specific needs. If you found this article interesting you can read more on property tax requirements in Indonesia.