Apart from Indonesian citizens (WNI), foreign citizens (WNA) who live in Indonesia can also have land certificates. However, land certificates intended for foreigners are of course different and are generally limited to a certain period of time. The following is an explanation of the types of land certificates and land rights that can be owned by foreigners in Indonesia.
Land certificates that can be owned by foreigners in Indonesia need to be well understood. In the legal context, ownership of land and buildings for foreigners or foreign legal entities is limited to use rights for a certain period of time, rental rights for buildings, ownership rights for flat units (or sarusun), and residential houses. This regulation requires that foreigners who have obtained land rights as Indonesian citizens must relinquish ownership if they change their status to foreigners, in accordance with Article 21 paragraph (3) of the Basic Agrarian Law (UUPA).
“Foreigners who, after the enactment of this Law, obtain property rights due to inheritance without a will or mixing of assets due to marriage, as well as Indonesian citizens who have property rights and after the enactment of this Law lose their citizenship, are obliged to relinquish those rights within a period of one year from the acquisition of that right or the loss of that citizenship. If after this period of time the ownership rights have not been released, then these rights are extinguished by law and the land falls to the State, provided that the rights of other parties encumbering them continue.”
Furthermore, Pasal 26 ayat (2) UUPA confirms that land owned by foreigners will become state ownership if it is obtained with ownership rights. Thus, the land certificate that can be owned by foreigners is a Hak Pakai certificate. Use Rights are defined in Article 41 of the UUPA as the right to use and/or obtain results from land controlled directly by the state or land owned by another party, in accordance with the decision of an authorized official or agreement with the land owner.
The subjects of usage rights include various parties such as Indonesian citizens, foreigners domiciled in Indonesia, legal entities established and domiciled in Indonesia, foreign legal entities with representatives in Indonesia, departments, non-departmental government institutions, regional governments, religious and social bodies, as well as representatives of foreign countries and international bodies.
The use of use rights is usually carried out by foreigners to use property in Indonesia because the applicable regulations limit them to only having use rights and rental rights. The use right certificate is a legal document, confirming the right to use the property in accordance with the characteristics of the use rights previously regulated. Property that can be accessed through a use right certificate includes state land, land with management rights, and land with ownership rights.
Land Rights for Foreigners in Indonesia
Provisions regarding land ownership for foreigners in Indonesia are regulated in law. They have certain rights to land and buildings, which include use rights to land for a certain period of time, rental rights to buildings, ownership rights to apartment units (known as “Sarusun”), as well as rights to residential or residential houses, as follows. :
1. Land Use Rights for a Certain Period
Foreigners in Indonesia have land rights, including land use rights with a certain time limit. Pasal 42 letter b of the Basic Agrarian Law (UUPA) together with Pasal 49 paragraph (2) letter e of Government Regulation 18 of 2021 explains that foreigners domiciled in Indonesia can hold use rights to land within the specified period. Usage rights provide the authority to use and obtain results from land owned by the state or other individuals, in accordance with the provisions stipulated by the authorized official or in an agreement with the land owner.
Land that can be applied for use rights includes state land, land with ownership rights, and land with management rights. Procedures and requirements for obtaining use rights to state land, management rights and property rights are carefully regulated. For example, use rights to state land are granted through a decree of the Minister of Agrarian Affairs and Spatial Planning (ATR), with a maximum period of 30 years which can be extended and renewed. Requirements for extending or renewing use rights cover various aspects, including maintaining and utilizing the land in accordance with the spatial plan, as well as the absence of a plan to use the land for public purposes. Likewise with land use rights, management rights and ownership rights, both of which are also strictly regulated and require the approval of the right holder concerned. Usage rights over proprietary land can be used as collateral for debts with mortgage rights, and can be transferred or released to other parties in accordance with established procedures.
Land that can be applied for use rights includes state land, land with ownership rights, and land with management rights. Procedures and requirements for obtaining use rights to state land, management rights and property rights are carefully regulated. For example, use rights to state land are granted through a decree of the Minister of Agrarian Affairs and Spatial Planning (ATR), with a maximum period of 30 years which can be extended and renewed. Requirements for extending or renewing use rights cover various aspects, including maintaining and utilizing the land in accordance with the spatial plan, as well as the absence of a plan to use the land for public purposes. Likewise with land use rights, management rights and ownership rights, both of which are also strictly regulated and require the approval of the right holder concerned. Usage rights over proprietary land can be used as collateral for debts with mortgage rights, and can be transferred or released to other parties in accordance with established procedures.
2. Ownership Rights to Flats and Residential Houses
Furthermore, foreigners in Indonesia also have the right to own flats (Sarusun) and residential houses. Sarusun is an apartment unit that functions as a separate residence, usually connected to a public road, and can be built on land with building use rights, use rights on state land, or land with management rights. Ownership rights to Sarusun are individual and separate from collective rights to shared parts, objects and land. According to Pasal 144 paragraph (1) letter c of the Job Creation Law together with Pasal 67 paragraph (1) letter c Government Regulation 18 of 2021, foreigners can have ownership rights to Sarusun with permission in accordance with applicable laws and regulations. Ownership rights to Sarusun can be split or combined with the approval of the authorized official, and can be transferred or secured with mortgage rights.
Apart from that, foreigners can also have ownership rights to a house where they live, provided they have immigration documents that comply with applicable laws and regulations. Residential houses that can be owned can be in the form of landed houses on land or flats built on land with use rights, building use rights on state land, land with management rights, or land with ownership rights located in certain areas such as economic zones. specifically, free trade, free ports, industrial areas and other economic areas.
3. Rental Rights for Buildings
Lastly, foreigners in Indonesia also have rental rights for buildings. Leasehold rights allow someone to use someone else’s land to build a building by paying a certain amount of rent to the land owner. Rental payments can be made once or periodically, before or after the land is used. However, the land rental agreement must not contain conditions that are detrimental to either party.
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