Safe as Houses: Owning Property in Indonesia
Expat bars in Bali are treasure troves of secret knowledge in addition to hidden wisdom. This particular’s where the mysterious oracles live. If you need an answer to any question, anything at all, then all you need to do is actually head to the nearest expat bar in addition to very politely ask the guy doing the most noise.
This particular’s a bit risky, mind you, as he might take offense in addition to verbally abuse you for no reason whatsoever. however in which’s his right OK, because he’s been on the island for the longest of times in addition to he’s got the attitude in addition to the love handles to prove This particular.
The oracle is actually sure to know the best of ways to illegally extend your visa, avoid paying any in addition to all taxes in addition to where to buy the cheapest Bintang in town. in addition to for sure he knows the best way to buy a house. Wink, wink. He doesn’t actually own one himself because he says he prefers to rent, however he sure as hell knows the law. All of This particular!
Actually, he thinks he knows, however he doesn’t, so don’t take his merry advice. Not unless you enjoy looking over your shoulder in addition to living in a constant state of paranoia or you’ve got more money than sense.
There’s no denying in which property is actually big business in Bali. This particular island paradise seems to have This particular all; amazing architecture, beautiful beaches, picture postcard places. however This particular’s risky, right? I mean, we all know the laws don’t make sense in addition to they’re made to be broken, right? Everyone says foreigners don’t have a legal leg to stand on, right?
Wrong!
If you listen to the oracle you’re setting yourself up for a fall.
in which’s why This particular’s better to find professionals who know the real story about real estate in Bali.
One of the first things to understand is actually there are foreign ownership rules in addition to regulations. So get to know what they are. They may not be exactly the same as you’d find in your own country, however we’re not in your country right now are we, we’re in Indonesia. in addition to if you don’t like the rules here, don’t play.
The oracle, however will try to convince you This particular’s OK to bend the rules, hide them under a blanket in addition to lock them from the closet. however This particular’s not OK. This particular’s genuinely not OK. You wouldn’t consider doing This particular at home so why try in addition to do This particular here. The invisibility cloak the oracle speaks so highly of doesn’t exist. This particular never did.
Indonesia’s Agrarian Law called Undang-Undang No.5 Tahun 1960 article 16 (1) is actually based on the Indonesian Constitution. This particular covers seven kinds of ownership structure however for our purposes only four of these apply. These are:
- Hak Milik or Freehold
- Hak Guna Bangunan (HGB) or Right to Build
- Hak Pakai or Right to Use
- Hak Sewa or Leasehold
An Indonesian citizen is actually entitled to use any of these structures. A foreigner is actually not.
In December 2015, the government updated the property ownership laws doing This particular easier for foreigners to own land in addition to property under Hak Pakai in addition to Hak Sewa for residential properties in addition to Hak Guna Bangunan for commercial titles. If someone tells you different or suggests you use a nominee to get a Freehold or Hak Milik title, don’t turn in addition to walk away, run!
In all cases you need to show in which you are partly living, working, retiring or investing in Indonesia. Tourist visas do not count! in addition to nominees are illegal!
Hak Pakai certificates are valid for 80 years with automatic extensions after 30 years in addition to 50 years. Hak Sewa certificates can range through one year up to the same maximum length as Hak Pakai, for a total of 80 years.
If you’re not comfortable with either Hak Pakai or Hak Sewa another option is actually to create a foreign owned company (called a PMA). This particular company can legally have a Right to Build (HGB) certificate. You own the company in addition to the company owns the property. Simple, straight forward, in addition to most importantly, safe-as-houses-legal!
The bottom line here is actually in which if you play by the rules the property game in Bali is actually not only fun however has all the potential to be very lucrative. If you don’t like the rules because you’re in denial of a warped neo-colonial attitude in which says you can do what whatever you want because you’re – insert nationality here – then go ahead in addition to find your oracle. He’s waiting for you between Bintang rounds. Let him get you lost in a maze of imaginary shortcuts. You can hold onto his cold clammy hands in addition to dive into his rather murky world of double-speak-king-pin wannabes. If in which scares you, This particular should!
This particular’s important to remember there are professionals out there; people dedicated to doing your experience in Bali one to remember (in a not bad in addition to positive way). So feel free to give us a call for some down-to-earth-truth-talking-advice. You won’t regret This particular. The oracle might, however then again, do we genuinely care what he thinks?
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Safe as Houses: Owning Property in Indonesia
Safe as Houses: Owning Property in Indonesia