Land ownership and registration certificate

[Samoerai]

You can make a simple loan agreement over a duty stamp (materai), it has to be in Bahasa, and no need for a notary. The loan can be in USD, so the interest rate could be low (0.25-0.5%).

I made a loan agreement: 25 years + 0,5 % interest per year, starting next month. Would that be okay, in spite of I transferred all of the payments for the house in 2020? If I pre- date the loan agreement, I donnot have proof that my wife transferred the monthly payments to my bank account.

Maybe a solution for this not having proof of transferring the monthly payments to my bank account is this:

A contract with my wife that I pay rent for staying at her house. Maybe that sounds crazy. But let's be honest. The tax authorities here, treat the house I bought for my wife as income and taxeable (I don't know if this is correct English) because man (WNA) and wife (WNI) have no direct vertical relationship. In fact, the same situation as a stranger gives money to my wife. So, in light of this, I am renting a room in her house with use of bathroom and kitchen facilities. Paying rent as much as the monthly payments she has to pay me.

Question: acceptable or not?

 

[centurion]

I made a loan agreement: 25 years + 0,5 % interest per year, starting next month. Would that be okay, in spite of I transferred all of the payments for the house in 2020? If I pre- date the loan agreement, I donnot have proof that my wife transferred the monthly payments to my bank account.

Maybe a solution for this not having proof of transferring the monthly payments to my bank account is this:

A contract with my wife that I pay rent for staying at her house. Maybe that sounds crazy. But let's be honest. The tax authorities here, treat the house I bought for my wife as income and taxeable (I don't know if this is correct English) because man (WNA) and wife (WNI) have no direct vertical relationship. In fact, the same situation as a stranger gives money to my wife. So, in light of this, I am renting a room in her house with use of bathroom and kitchen facilities. Paying rent as much as the monthly payments she has to pay me.

Question: acceptable or not?

You do not need to have bank transfers for loan repayment installments. You can have receipts signed over materai (duty stamp), confirming she received the money.

If you rent, your spouse (owner) will have to pay 10% tax on rent.

 

[Samoerai]

You do not need to have bank transfers for loan repayment installments. You can have receipts signed over materai (duty stamp), confirming she received the money.

If you rent, your spouse (owner) will have to pay 10% tax on rent.

You mean: she can have receipts confirming I recieved the money, right?

 

[centurion]

You mean: she can have receipts confirming I recieved the money, right?

Yes for a loan or any transfer.

However, if your wife received money/funds from rent she has to pay 10% tax on that.

 

[mellowyellow]

A company, Indonesian or PMA, may not own freehold land (Hak Milik). They can own Hak Guna Bangunan, with the caveat that for PMA the business is not created for the main purpose of owning the HGB.

Dafluff, you comment was what I suspected to be the position that the PMA "not created for the main purpose of owning the HGB". This totally make sense. The advisors out there are saying quite something which I don't really buy - one can set up a PMA as a vehicle to own land

 

[centurion]

Dafluff, you comment was what I suspected to be the position that the PMA "not created for the main purpose of owning the HGB". This totally make sense. The advisors out there are saying quite something which I don't really buy - one can set up a PMA as a vehicle to own land

You can set a PMA as a vehicle for land or real estate, and register it with a business line "owning and managing real estate", but there are some limitations:

-PMA has high paid-in capital and high running costs, a lot of reporting obligations that will become more strict as everything goes online,
-In case of empty land, HGB requires the building to be built in 2 years,
-there is a corporate structure that is expensive (resident director, commissioner etc).

So if you open a PMA just to hold the land, and not run a business in the meantime, it is not so profitable, especially for smaller units or smaller land.

 

[jstar]

….purpose of owning the HGB…………a vehicle to own land

These are two very different things.

 

[pantaiema]

Dafluff, you comment was what I suspected to be the position that the PMA "not created for the main purpose of owning the HGB". This totally make sense. The advisors out there are saying quite something which I don't really buy - one can set up a PMA as a vehicle to own land

When come to owning a land, property involving a lot of money, just be careful what the advisor is telling you. Keep in mind they might be just a salesman colluding with a property developer aiming for commission. When you ask them they will just tell you what you want to hear and hide the other facts that might discourage you to invest/buy property. But here we can't blame them, they are salesmen. The headline that a regulation is now allowing foreigners to own properties is just like this, sockpuppeting aiming to fool kid.

It is quite similar to various visas to attract talents, investors, etc that have been introduced or will be introduced, investors visa, second home, golden visa, retirement visa etc. If you carefully have a look of it you might notice it is only a very small change to deserve a headlines and sometimes the change is worse.

Due diligence, cross-checking it with multiple independent parties is a must. But nowadays there are ChatGPT, Bard AI saving people time to start with DDs. This is what ChatGPT& Bard AI are saying, again will need to be taken with a pinch of salt, but at least it is a good starting point. More importantly they are independent and free from other interests. The most authoritative sources is certainly to see what the law is saying. But again in Indonesia it could be different things as it will depend on who decide the case and make judgement.

 

[R Cameron]

@pantaiema That AI response is wrong to say a PT PMA can own Hak Milik land, it will still be HGB. And HGB is truly closer to ownership than a "lease" as it is sometimes portrayed. I agree that skepticism is good, both of salesmen and AI.

 

[Samoerai]

Is this true? A WNA can own a house and the land the house is standing on.


"So, with this provision, a passport or visa is sufficient, foreigners can own property in Indonesia. So this is somewhat different from the previous one, previously we asked for a KITAS (Limited Stay Permit Card) and KITAP (Permanent Stay Permit Card) as well,"

"Now in the possession of a foreigner the KITAS and KITAP will be given after the foreigner gets or buys a property in Indonesia, so the positions are reversed,"

No KITAS, WN Asing Boleh Punya Properti di RI Modal Paspor

Kini, pemerintah memberikan kemudahan Warga Negara Asing (WNA) untuk memiliki hunian di Indonesia. WNA bisa memiliki properti di Indonesia dengan syarat paspor.

www.detik.com

 

[R Cameron]

Is this true? A WNA can own a house and the land the house is standing on.

No, not 'full' ownership known as Hak Milik. That appears to simply be a change that KITAS and KITAP are no longer required, only a passport. Foreigners may have Hak Milik of an apartment in a multi story building (which has no ownership of the land beneath it). Foreigners may have Hak Pakai or Hak Guna Bangunan over grounded houses, which are designations with some similarities to ownership, but are not full ownership.

 

[Samoerai]

No, not 'full' ownership known as Hak Milik. That appears to simply be a change that KITAS and KITAP are no longer required, only a passport. Foreigners may have Hak Milik of an apartment in a multi story building (which has no ownership of the land beneath it). Foreigners may have Hak Pakai or Hak Guna Bangunan over grounded houses, which are designations with some similarities to ownership, but are not full ownership.

The news that a WNA can buy property with a passport only is getting viral.
Indonesians saying "It's a bad idea" because they are afraid that prices go up.
But, I wonder... would prices on property go up?
Are foreigners, like rich main land Chinese, willing want to buy property in Indonesia for themselves to live in or just for investments?

 

[Hermes]

The news that a WNA can buy property with a passport only is getting viral.
Indonesians saying "It's a bad idea" because they are afraid that prices go up.
But, I wonder... would prices on property go up?
Are foreigners, like rich main land Chinese, willing want to buy property in Indonesia for themselves to live in or just for investments?

Could it be that the reference to 'buy' a property means via hak pakai? I found articles online stating similar to your IG post, but they had more details, for example, a landed property cannot be more than 2000 square meters and has to have a certain value, for example in Bali USD 330,000, or IDR 5 billion, which squarely fits the requirements of hak pakai. Perhaps the change, if any, is that a foreigner no longer needs a residence permit to hold HP, which at the end of the day is almost as good as hak milik, in the sense that it is for up to 80 years, the government is the ultimate 'owner' and the title can be converted back to hak milik when sold on to a WNI so the property rights do not depreciate like a leasehold. Given this, it is understandable how the media could equate HP with 'ownership'..

 

[centurion]

Could it be that the reference to 'buy' a property means via hak pakai? I found articles online stating similar to your IG post, but they had more details, for example, a landed property cannot be more than 2000 square meters and has to have a certain value, for example in Bali USD 330,000, or IDR 5 billion, which squarely fits the requirements of hak pakai. Perhaps the change, if any, is that a foreigner no longer needs a residence permit to hold HP, which at the end of the day is almost as good as hak milik, in the sense that it is for up to 80 years, the government is the ultimate 'owner' and the title can be converted back to hak milik when sold on to a WNI so the property rights do not depreciate like a leasehold. Given this, it is understandable how the media could equate HP with 'ownership'..

Foreigners can now buy apartments with Hak Milik Atas Satuan Rumah Susun, basically a regular apartment that fits in upper price bracket, and apartments/houses in Hak Pengelolaan Atas Tanah (HPL) area-these are reclaimed islands in North Jakarta, it also reffers to these two besides Hak Pakai.