What is the legal status of property inheritance for foreign heir?

[michiru_maeda]

Hello, I just joined this forum. I am considering to convert my Australian PR to citizenship. But I would like to know more what I will gain or lose before finalizing my decision.

I am an only child, 39, in domestic relationship with my Australian partner (kumpul kebo ) and residing in Australia. My parents are in Surabaya and have retired. Both of my parents run small family business from home. I would love to convert their residential home to a student accommodation. As it is located near Kenjeran, Galaxy Mall and local universities (ITS and Unair). So beside their current income, they will have additional income stream from the accommodation (kos-kosan).

My parents are in their 60s. Still healthy and independent. But one day, I will need to live in with them. The cost of taking care aged parents in Australia will be astronomical. My savings put aside for my parents will last longer if I live back in with them. My parents will be my sponsor for KITAS then KITAP by using KMILN.

My partner and I are planning to travel the world after our retirement in Australia. So my consideration to have Australian passport is for practicality. It will be great if I can travel with the passive income from the kos-kosan after my parents pass away. However, I have read that foreign heirs can inherit a property from Indonesian parents at the time when they are deceased. From this point, there will be two options. Sell the hour or keep the house under the right of use if they have permit to stay. From my research, for the second option, I need to go to a notary to downgrade the land right at the National Land Agency. But this article doesn't say further than that. I tried to get my head around the second option. But still confused after reading another article. Could you explain it to me with less legal terminology?

Thank you!

 

[dafluff]

Hello, I just joined this forum. I am considering to convert my Australian PR to citizenship. But I would like to know more what I will gain or lose before finalizing my decision.

I am an only child, 39, in domestic relationship with my Australian partner (kumpul kebo ) and residing in Australia. My parents are in Surabaya and have retired. Both of my parents run small family business from home. I would love to convert their residential home to a student accommodation. As it is located near Kenjeran, Galaxy Mall and local universities (ITS and Unair). So beside their current income, they will have additional income stream from the accommodation (kos-kosan).

My parents are in their 60s. Still healthy and independent. But one day, I will need to live in with them. The cost of taking care aged parents in Australia will be astronomical. My savings put aside for my parents will last longer if I live back in with them. My parents will be my sponsor for KITAS then KITAP by using KMILN.

My partner and I are planning to travel the world after our retirement in Australia. So my consideration to have Australian passport is for practicality. It will be great if I can travel with the passive income from the kos-kosan after my parents pass away. However, I have read that foreign heirs can inherit a property from Indonesian parents at the time when they are deceased. From this point, there will be two options. Sell the hour or keep the house under the right of use if they have permit to stay. From my research, for the second option, I need to go to a notary to downgrade the land right at the National Land Agency. But this article doesn't say further than that. I tried to get my head around the second option. But still confused after reading another article. Could you explain it to me with less legal terminology?

Thank you!

Hi, and welcome to the forum. A Hak Pakai title is a title placed on top of another title, in your case, this will be a Hak Milik title. The Hak Milik Title will have to be owned by an Indonesian citizen. In this case, a hak pakai title can be held for 30 years and then renewed with the approval of the Hak Milik title. Should it meet certain criteria as set out by ministerial decree (in this case Menteri Agraria dan Tata Ruang), for example, size of 600m2 or less, it can one day be upgraded back to Hak Milik. Note: Need to double-check the current statutes because ministerial decrees are quite easy to change.

The WNA also has to be a resident of Indonesia, in order for the Hak Pakai to be valid.

IMO, getting Australian citizenship in order to avoid making visas to travel, but still wanting to live in Indonesia and own property is trading one headache for another...

 

[michiru_maeda]

Hi, and welcome to the forum. A Hak Pakai title is a title placed on top of another title, in your case, this will be a Hak Milik title. The Hak Milik Title will have to be owned by an Indonesian citizen. In this case, a hak pakai title can be held for 30 years and then renewed with the approval of the Hak Milik title. Should it meet certain criteria as set out by ministerial decree (in this case Menteri Agraria dan Tata Ruang), for example, size of 600m2 or less, it can one day be upgraded back to Hak Milik. Note: Need to double-check the current statutes because ministerial decrees are quite easy to change.

The WNA also has to be a resident of Indonesia, in order for the Hak Pakai to be valid.

IMO, getting Australian citizenship in order to avoid making visas to travel, but still wanting to live in Indonesia and own property is trading one headache for another...

Thank you for the reply. Seems like my plan to have passive income through the house is falling apart before it starts LOL!

Was thinking to divide time between Australia and Surabaya if my plan is going through. Looks like I can't make my Hak Pakai to be valid since I won't be there full time.

 

[Banana72]

Do you care more about wanting to have a passive income or owning a property in Indonesia? and does the passive income have to be in Indonesia? If you were to have a kos-kosan, who is going to manage the property, etc are you going to take care of that while living with your parents? (I'm also curious about that KIMLN too...I'd say it's just another bureaucratic card created by the government..but who knows).

I guess you could have the property as kos-kosan and start earning money, although dealing with renters in Indonesia has its own headache...but the moment both your parents pass away, I'd say to avoid any headaches, sell the property and switch to either government bonds or CDs (if you still have your KITAP) or if you don't wanna stay in Indonesia at that time, just transfer all the money back to Aussie and invest in mutual funds there or something (or maybe leave a small amount/bank BCA or something when you travel).

or just stay an aussie PR and keep your indonesian citizenship. Trying to do the KITAS/KITAP can be a really frustrating process (and costly if you want to keep it long term)...and even then, you don't really have complete proper rights to live in Indonesia (such as owning a landed property).

 

[michiru_maeda]

Do you care more about wanting to have a passive income or owning a property in Indonesia? and does the passive income have to be in Indonesia? If you were to have a kos-kosan, who is going to manage the property, etc are you going to take care of that while living with your parents? (I'm also curious about that KIMLN too...I'd say it's just another bureaucratic card created by the government..but who knows).

I guess you could have the property as kos-kosan and start earning money, although dealing with renters in Indonesia has its own headache...but the moment both your parents pass away, I'd say to avoid any headaches, sell the property and switch to either government bonds or CDs (if you still have your KITAP) or if you don't wanna stay in Indonesia at that time, just transfer all the money back to Aussie and invest in mutual funds there or something (or maybe leave a small amount/bank BCA or something when you travel).

or just stay an aussie PR and keep your indonesian citizenship. Trying to do the KITAS/KITAP can be a really frustrating process (and costly if you want to keep it long term)...and even then, you don't really have complete proper rights to live in Indonesia (such as owning a landed property).

I care more about having passive income for traveling. In the end, I don't plan to keep owning the kosan. We are childfree couple. So no one to pass it on. My ideal scheme after both parents pass away would be keeping the kosan for the maximum duration a foreigner can keep (I read 30 years) and sell it. I will be nearly 70s by then. Probably too old to do flying back and forth to manage the kosan. It doesn't have to be in Indonesia. But earning it through the kosan means I don't have to start from 0.

I am aware the headache of managing kosan. I was anak kos once. The owner lived in the property 24/7. So yeah, you have a point. managing kosan part time will be adding more headache. I guess, I should be hands on in managing the kosan while my parents are still alive to get an idea. If I can't handle it, then selling it after my parents pass away is the best option.

 

[Banana72]

I care more about having passive income for traveling. In the end, I don't plan to keep owning the kosan. We are childfree couple. So no one to pass it on. My ideal scheme after both parents pass away would be keeping the kosan for the maximum duration a foreigner can keep (I read 30 years) and sell it. I will be nearly 70s by then. Probably too old to do flying back and forth to manage the kosan. It doesn't have to be in Indonesia. But earning it through the kosan means I don't have to start from 0.

I am aware the headache of managing kosan. I was anak kos once. The owner lived in the property 24/7. So yeah, you have a point. managing kosan part time will be adding more headache. I guess, I should be hands on in managing the kosan while my parents are still alive to get an idea. If I can't handle it, then selling it after my parents pass away is the best option.

It goes back to how much %-wise you can get yearly vs putting it in Indo government bonds pays around 6-7% minus 20% tax if no npwp (which you can still own with a KITAP with way less maintenance and you get money lumpsum every 6 months). Pray that Aussie dollar stays stable to if you earn your income in Indonesia (I assume you wanted to travel worldwide). I'd say looks like better keep your Indo citizenship for a while and stay a PR until you really figure out what to do...I don't know how strict Aussie government regarding its PR rules (vs the US) but if it still gives you lots of freedom to travel, etc. unless you want to participate in politics, etc or other benefits I'm not aware of, I'd say keep the Aussie PR. Heh..yeah at least you're only within 6-7 hours flight (from Sydney to JKT) if needed something super urgent....hopping on a plane is much more doable compare to..say, Seattle.

 

[michiru_maeda]

No, no, not interested in politics or voting rights. However, I must maintain my residency to keep my PR which is a bit of a hindrance if we want to travel worldwide full time. Also PR status doesn't guarantee the right to enter Australia as its travel component must be renewed every 5 years. The politics towards immigrants (new or old) here can be vindictive. So it is part of my consideration to switch citizenship

 

[waarmstrong]

You are also mistaken about life infirmities getting in the way of enjoyment once you approach age 70.

 

[Nimbus]

You are also mistaken about life infirmities getting in the way of enjoyment once you approach age 70.

This is probably genetics and lifestyle, but most Americans are much healthier in their 70s than Indonesians. There’s a reason that retirement age for civil servants in Indonesia is 56 year old, although it has been increased to 60 for mid level experts and 65 for high level officials.

 

[waarmstrong]

Americans, unfortunately, are not particularly healthy, plus we have a medical services regime that is, to be kind, second rate in comparison to our peers. Obesity is a common characterization of the life style of many; too many.