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Everything to Know about

Land ownership Rights

in Indonesia

     Expatriates in Indonesia have a rightful concern regarding land use and ownership.  Act No. 5 of 1960 regulates the umbrella law regarding rights over land ownership.

Only Indonesian citizens may have a Right to Own Principle (Hack Milik, Freehold)

     With the emergence of foreign investment and business in Indonesia, many foreigners need buildings or land. A foreign who wants to have their own house or business building can obtain under these following rights:

Right to use (Hak Pakai)

     A person or legal entity has the right to lease another's land. This right belongs to Indonesian citizens, foreigners, and legal entities (such as PT/limited liability companies) established under Indonesian law and domiciled in Indonesia or the representative office from a foreign legal entity. The lease and the leaser can make an agreement to arrange it,

     The maximal duration of this agreement is 25 years but could have an extension for 20 years more.

Building Rights on Land (Hak Guna Bangunan)

     The safest and increasingly popular solution for foreigners to buy a property is to acquire HGB (Right to Build, Hak Guna Bangunan) through the formation of a foreign-owned company (PT PMA).

      Right to build title cannot be owned by a foreign individual but can be owned by a 100% foreign-owned PMA-licensed company, which then has the freedom to construct and develop buildings on the land during the term of the HGB. This structure therefore can provide a foreign investor with direct legal control over the company and land. The duration of the HGB is for 80 years, split as 30 years + 20 years + 30 years.

   Registration of the company could be done from abroad, just sending a letter of atorney to someone in Indonesia to make the company on his name. 

     Price approximately 7.000$, duration 3 months.

Leasehold (Hak Sewa) 

     This is a notarized lease agreement that can be signed for 25 years with the right to extend the lease

      One person or a legal entity in Indonesia could possess the right to lease of land and use the land for purposes of a building by paying the owner a sum amount of money as leased, based on Article 44 Act 5/1960. The right belongs to Indonesia citizens, foreigners, as well as legal entities registered in Indonesia

     Agreements for long-term leases, which are notarized by a public notary (PPAT) and recorded with the Indonesian Ministry of Law. Under the Indonesian Civil Code, leasehold rights are protected in the event of death/bankruptcy of the lessor in the event of a sale of the freehold land. In both cases, the lease will continue for its full duration. Investors own the rights of the lease for the duration that has been paid and they have the right to on-sell the remaining years left of the lease as well as pass the lease title on via inheritance. This structure is the most secure and legal way for foreign citizens to purchase property.

TAX

 

-The seller and the buyer are required to pay all legal costs involved in the land transaction/settlement. This varies in accordance with the size of the plot being purchased however as a rough guide it comes to about 8% of the purchase price of the land including taxes required to be paid to the govt by the buyer

-Depending on the arrangement reached with your Notary there will usually be a fee required to be paid which is generally 1% of the sale price.

Tropical Beach

What’s the next step after purchase land?

​​Building your dream villa

 

     We can happily recommend for you Mandalika Developer who does work in the area. Your plots will be totally leveled and ready for the commencement of building upon purchase and it's our hope that as many purchasers as possible commence building as soon as possible to help manifest your vision.

     The best is to use a local contractor as Mandalika Developer because some cultural issues have to agree with the community and mayor of the village

How much does it cost to build in Lombok?

     This will obviously vary depending on the type and quality of villa you are looking to build however as a rough guide a high-end build with quality construction, fittings, and finishing will range from about 100.000$ for a simple 1bedroom villa, 150.000$ for a 2bedroom villa...

-IMB: Before commencing to build however you will be required to apply for a building permit known as an IMB from the Government, which can be done through Mandalika Developer. Will be needed Architectural plans. 

-Infrastructures and services: Street access not always are from the main road, sometimes needs to fix the road to make the access by concrete if needed. 

Services as Water usually are done by well, not possible government supply.

Electricity is no problem, just request to PLN electricity Indonesian company.

Internet if is not near the city or the villa only could be by 4G, usually as fast as cable... more than 10MB speed

     Electricity: Some people are opting for a mix of solar and generators, which can provide ample electricity requirements and fits in nicely with the whole eco theme and making a lot of sense given the amount of sunshine in Lombok. Running things like air conditioners and other high amperage devices is extremely power-intensive so it is necessary to couple renewable sources with a backup generator and/or be connected to the grid. 

    Water: Otherwise you can use rainwater collection which is then stored in underground tanks installed during initial home construction and works perfectly well due to the enormous quantities of rain Lombok receives for about 4 months a year. Alternatively water tankers can deliver to you to be stored once or twice a year at a very cheap rate.

     Septic: Sewerage is handled via septic tanks and there are a number of nearly zero maintenance, zero odor, totally hidden systems on the market that are customizable to individual needs.

     Internet: High-speed fiber network has been rolled out for the Mandalika project, and is currently available in and around Kuta, so like everything else you can expect things to continuously improve over the coming years as it develops further. There is a growing cellular network in the south and 3G/4G coverage, while not comprehensive is generally not a problem. Again this is being improved all the time.