Buying land

[Candice Hammer]

Hi there,

I was hoping someone could help me. I would like to know the laws around buying land in Lombok. I am from Australia. I know only an Indonesian citizen can own land in Indonesia but what about an Australian business?

Thanks,
Candice

 

[jstar]

If it would be a foreign owned business, it has to be a so called PT PMA, Candice. But besides it is amazingly expensive to set up this company structure, it can NOT have the so called Hak Milik (land ownership).

 

[dafluff]

An Australian business can not own land in Indonesia either. You must have a registered legal entity in Indonesia. Typically this is a PT PMA (foreign investment limited liability company). Even then it has at least the following restrictions:

1) The PT PMA can not exist solely for the purpose of owning land.
2) The land title is not freehold but a Hak Guna title (land use), which can be renewed as long as the requirements of the HG title are continuously met.

 

[waarmstrong]

Non-citizens Investing in Indonesian real estate is a perilous endeavor, even for those with years of experience. Corruption and shysterism are endemic. Finding another place for your money is highly recommended.

 

[steveandpenny]

The only thing you can do is a long term lease for the land .. 20 years or longer.

 

[snpark]

Or lease a wife for 20 years and donate the land

Kiss the wife goodbye when you leave the house and kiss the house goodbye when you leave the wife

Love is grand, divorce is a hundred grand

 

[waarmstrong]

The only thing you can do is a long term lease for the land .. 20 years or longer.

I was going to say, "Marry an Indonesian citizen property owner," but Snpark already noted the complications of taking that route.

 

[vocalneal]

^ Find a woman you don't like and buy her a house. Was that Rod Stewart or Mick Jagger.

 

[brian@bekasi]

Or lease a wife for 20 years and donate the land

Kiss the wife goodbye when you leave the house and kiss the house goodbye when you leave the wife

Love is grand, divorce is a hundred grand

As someone who has been married a lot more times than average, I can very much relate to the "divorce is a hundred grand" bit.

 

[Bad_azz]

Guys, guys... I will assume that Candice is a woman. She will not be allowed an Indonesian wife. Same-sex marriage is not legit here.
However Candice- I do know a couple of really really decent single male Indonesians who would not fleece you, should you be available to marry.

 

[ericjancoen]

depend on what the land used for, the regulation differ for each type of right. tell us a bit more about this.
i assume the entity who will own the right will be a business/ a legal entity, lets assume that part is done.

the business will be able to own property under these titles,1. right for building (Hak Guna Bangunan), 2. right to use (Hak Pakai) for 20ish years and you can extend it as stated above, at first these looks like you just renting, but these title also come with privilege as if you own the land, like using it to take credit from bank etc. you can read the detail on Indonesian regulation number 50 of 1960 (Undang-Undang Nomor 5 Tahun 1960 tentang pokok agraria).

i have seen some people succeeded setting up their business and "owning property" in Indonesia. To put it simply, they find good partner here. I hope you find yours and wish you the best of luck in what you are doing.

 

[jstar]

For the Right to Use land, so the Hak Pakai, you don’t need a company @ericjancoen . so that would be rather useless in this case. And I have seen cases where foreigners who were NOT domiciled in Indonesia -so spending the winters here- get into trouble with this setup. (I think @Davita posted an article on the subject once.)

I guess with the latter paragraph (with partner) you mean the ‘nominee system’. So to have an Indonesian citizen (WNI) own the land. There is always some risk involved, even if there a ‘watertight’ contract; in case of conflict between the foreigner and the official owner or a change of regulations it might become a nightmare.

And talking about ‘trustworthy’ partners: See the Jeremy Thomas case in BALI. Greed is a nasty thing.

https://m.detik.com/news/berita/d-3...penipuan-jual-beli-vila-rp-16-m-jeremy-thomas

 

[Bad_azz]

I'd rent my hubby out ... he is trustworthy.

 

[William King]

And talking about ‘trustworthy’ partners: See the Jeremy Thomas case in BALI. Greed is a nasty thing.

https://m.detik.com/news/berita/d-3...penipuan-jual-beli-vila-rp-16-m-jeremy-thomas

I had not heard about that case before, so he pretended to help, transferred land to his name and then sold it.

Bali police will not investigate because the lives in Jakarta.... so have the Jakarta police done anything ? Or is it too far away to investigate ?

 

[snpark]

I thought this case was settled in the end, wasn't JT found guilty and the bule (Patrick?) won (not sure if he got his money or property back though)

 

[Davita]

I thought this case was settled in the end, wasn't JT found guilty and the bule (Patrick?) won (not sure if he got his money or property back though)

If my memory serves me well I'm sure the civil case was found in the Bule favor and the land returned to the original nominee as the transfer was found to be fraudulent. Not sure what happened to that case thereafter.
I also recall that JT was charged with a crime, found guilty and sentenced to jail......but cannot find any reference so it may be my imagination or just wishful thinking....

edit: Maybe I was thinking of JT's son who was sent to prison..... http://www.en.netralnews.com/news/lifestyle/read/13746/axel.matthew.thomas.catches.flu.in.prison

 

[jstar]

I found an English article on the case. This is an excerpt:

The case against Jeremy Thomas dates from the purchase of a 35 are parcel (3,500 square meters) of land in Dewatan, Ubud in 1999 by Alexander Patrick Morris. Because Morris is a foreigner, he “borrowed” the name of an Indonesian nominee Rudio Marcio who acted as an agent in the property transaction.

In 2000 a villa was erected on the parcel of land.

Morris, who worked as an independent commissioner for PT Astra International, was a long-standing acquaintance of Jeremy Thomas who undertook to build a spa on a 12 are (1,200 square-meter) section of the land, adjacent to Morris’ villa.

When Patrick asked Jeremy Thomas to borrow money from a bank to build the spa, Jeremy requested in 2013 that the title on the land be transferred from Marcio to his name in order to facilitate the approval process for the loan from the Bank.
.
Because of a close friendship between Jeremy Thomas and the Australian, he agreed that Jeremy assume nominee ownership of the property and villa.

Problems arose when the bank provided Rp. 17 billion to Jeremy Thomas who never reported how the borrowed funds co-signed by Morris were being used.

In the end, Morris was only given Rp. 1 billion by Jeremy Thomas, who in turn charged the Indonesia actor with embezzlement and fraud under sections 378 and 372 of theIndonesian Criminal Code (KUHP).

http://balidiscovery.com/messages/printmessage.asp?Id=14592

 

[Davita]

I recall the case as it was used by many advocates of the 'nominee' method of 'owning' property in RI to be lawful. The facts, and judges, didn't actually conclude that.
The case itself was bizarre as both parties were involved in fraud. In fact, the Bule (Patrick), initially was found guilty and sent to jail before he turned around and had JT charged.
http://www.news.com.au/world/asia/f...g/news-story/b39c05d6ddd9ff520ac2e037c6f903e4

To me it was a case of trying to use the law to clean dirty hands of both parties.

I suggest we shouldn't detract from the OP's question further by opening this can of worms as it isn't relevant.

 

[jstar]

You think? I consider it to be extremely relevant since everyone who toys with the thought to ‘buy’ in Indonesia, will one moment in time be confronted with the Nominee setup. So also the OP.

We don’t hear that much about it but it seems there are more than 100 active disputed land case before the courts. Only in Bali.

And law firms as Bali Safe Harbor still claim it’s possible to create a PT which can also own land.

 

[Davita]

You think? I consider it to be extremely relevant since everyone who toys with the thought to ‘buy’ in Indonesia, will one moment in time be confronted with the Nominee setup. So also the OP.

We don’t hear that much about it but it seems there are more than 100 active disputed land case before the courts. Only in Bali.

And law firms as Bali Safe Harbor still claim it’s possible to create a PT which can also own land.

I was talking about this Alexander/Thomas case as being irrelevant.
If you wish to hash about the legal problems associated with nominees a better example would be the Susi Johnston case......https://www.smh.com.au/world/a-nightmare-in-paradise-20150709-gi8lrr.html