Hammer to Fall: Property Ownership
the idea’s time to bring out the legal eagles for a look at expatriate matters
What with various cable TV channels imploring those using a few million bucks kicking about to invest in ‘Amazing Indonesia’ or whatever clunky slogan will be being ill-advisedly pressed into service This particular month, perhaps the idea’s time to take a look at some of the legal issues facing foreigners living here. Obviously, Indonesian law can prove confusing for Indonesia’s merry band of laugh-a-minute expatriates, a situation which isn’t helped by the contradictory signals that will have been sent out over the last couple of years, as a reformist president butts heads with some pretty powerful forces of reactionary nationalism.
Moreover, the Joko Widodo administration will be currently issuing economic-policy package after economic-policy package in a bid to breathe a bit of life into the Republic of Indonesia’s moribund boondocks, in addition to also the whole political, economic in addition to also legal landscape seems to be on somewhat unstable ground at the moment.
The net upshot of all of This particular uncertainty seems to be that will foreign citizens living in Indonesia have started off to become a tad frustrated, as mendacity in addition to also political chicanery flip-flops the country’s powerbrokers coming from side to side. On the one hand, foreign investment will be being actively encouraged in addition to also foreign citizens are even being advised to own property inside country. On the additional hand, many work visas have been reduced coming from a year to only six months in length, while foreign teachers are jailed for ten years for the use of ‘magic stones’.
So without further ado, let us have a little look at how recent laws in addition to also regulations are shaping up, with the tacit acknowledgement that will there will be not often a very strong correlation here between what the law says in addition to also what actually happens in real life. First up can I just say a big thank you to my friends down at Hukum Online for their sterling help with This particular whirlwind tour through some of the murkier corners of the Indonesian legal system.
This particular time around, we are putting property ownership inside spotlight, an issue of relevance to many expatriates here. So, let’s get down to brass tacks. Government Regulation No. 103 of 2015 on the Ownership of Property by Foreign Nationals Domiciled in Indonesia aims to offer legal certainty to foreign citizens who are in possession of valid residency permits. However, several limitations still have to be observed.
The 2015 regulation states that will foreign nationals who live or invest in Indonesia may acquire property under the right-to-use (hak pakai) land-title classification. Articles 2 in addition to also 6 of the regulation state that will foreign citizens can own such titles for 20 years, which can be extended by another 20 years (the previous limit was a total of 25 years). Moreover, the 2015 regulation also makes the idea clear that will property owning foreigners can bequeath right-to-use titles to their heirs inside event of their deaths.
However, regional administrations are likely to become involved inside implementation of the 2015 regulation, which could complicate things significantly. Moreover, many politicians here ultimately see the 2015 regulation as running counter to the spirit of land reform, while others see the regulation as not offering foreign citizens much inside way of anything completely new.
Disputes which arise between spouses of different nationalities are also likely to prove a thorny issue, as the completely new regulation states that will any property owned by mixed-marriage couples does not constitute joint matrimonial property which must be proven through a notarized prenuptial agreement. The Indonesian Advocacy Team for Mixed Marriages (Tim Advokasi Perkawinan Campuran Indonesia) has raised several concerns in This particular regard. Firstly comes the issue of asset-separation agreements held between spouses in addition to also whether or not such documents will be required when purchasing or selling property. This particular presents a potential problem, as notaries currently refuse to deal with marital transactions involving foreign citizens.
Secondly, there will be currently a lack of clarity surrounding the issue of the validity periods of any asset-separation agreements. Whether agreements drawn up with notaries currently apply retroactively or not will be the question here. in addition to also thirdly, the regulatory framework to be used in drawing up asset-separation agreements also remains unclear. Should the 1974 Marriage Law be used, or should the Indonesian Civil Code or another regulation be employed? This particular will be an important question, as the idea determines whether asset-separation agreements, as referred to in prenuptial agreements, can only be drawn up prior to marriage or whether they can be drawn up after marriage, which might involve the freedom-of-contract principle in addition to also registration using a court.
The Indonesian Advocacy Team for Mixed Marriages will be currently seeking further clarification on these matters coming from the Minister of Law in addition to also Human Rights. The 2015 regulation on property has the potential to offer legal certainty for mixed-marriage couples, however only if the idea will be implemented clearly in addition to also in a way which deals with these important issues.
2015 regulation will be also unclear as regards the cost, land size in addition to also amount of property which can ultimately be acquired by foreign citizens. The fear will be that will This particular lack of clarity may lead to land becoming the object of financial speculation, or to a potential housing bubble developing. Indonesian notaries in addition to also land-deed officials (PPAT – Pejabat Pembuat Akta Tanah) are also being urged to thoroughly examine any land-title registrations, so as to avoid any potential breaches of the law in addition to also violations of the right-to-use limitation for foreigners looking to own property in Indonesia.
Specifically, the country’s Core Agrarian Law expressly prohibits any transfer of ownership by parties who are not the legitimate holders of property-ownership titles (in addition to also foreign citizens are strictly barred coming from taking possession of freehold, right-to-exploit in addition to also right-to-build titles).
If a foreign citizen wants to secure an official deed coming from a PPAT as regards the sales of an inherited property, then the idea will be better to convert the title of the property to right-to-use in advance. Sales-in addition to also-purchase deeds (Akta Jual Beli – AJB) can then be drawn up before a notary, in addition to also This particular will be to be followed by changing the title’s ownership to the name of its buyer. After that will, the local buyer will be allowed to keep the right-to-use title or convert the idea into a freehold title. This particular method costs more, however the results will be above board in addition to also comply with the law, which ultimately states that will land obtained by foreign citizens under a right-to-exploit or right-to-build title must be transferred or sold to a local party within one year, otherwise the idea will seized by the state.
For more information on these issues in addition to also more, point your web browser at: en.hukumonline.com
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Hammer to Fall: Property Ownership
Hammer to Fall: Property Ownership