- The diverse range of property ownership and land titles in Bali caters to specific buyers' needs and aspirations.
- Specific residency permits, such as KITAS or KITAP, allow individuals to individually apply for certain ownership titles.
- Ensure legality and profitability by carefully considering the nuances of property ownership and land titles in Bali.
Have you been considering buying property in Bali? Its natural splendor, favourable lifestyle, coupled with booming tourism and market, make it an attractive prospect. However, everyone is subject to these legal provisions when it comes to property ownership.
Whether you’re a local or a foreign investor, understanding the various property ownership and land titles in Bali is paramount.
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1. Hak Milik (HM) | Right to Own
Hak Milik is the paramount freehold land title in Indonesia. It carries immense significance and grants you unmitigated ownership rights over your land.
However, it’s essential to understand that this prized title is exclusively reserved for Indonesian nationals. Foreign nationals (WNAs) and foreign-owned companies (PT PMAs) are ineligible to purchase property under the Hak Milik land title.
Owners with this title have the right to sell, transfer, inherit their land to any individual who possesses the same land title rights. Indonesian nationals also can transfer the Hak Guna Bangunan title to Hak Milik.
2. Hak Sewa Bangunan (HSB) | Right to Lease
This title offers a flexible approach to property ownership and land titles in Bali. It is available to Indonesians who own land or property via Hak Milik and foreign-owned companies (PT PMA) who own a building through HGB, as outlined in Article 44 of Act 5/1960.
Leasehold agreements are structured with fixed terms, typically lasting between 25 to 30 years, with renewal options in the mix. The agreement also covers rent payments and responsibilities related to maintenance and development.
Furthermore, this title also allows owners to rent out their space and generate income. And what’s enticing about choosing a leasehold property? Reduced upfront costs, access to prime locations, and a relatively straightforward acquisition process.
3. Hak Guna Bangunan (HGB) | Right to Build
The “Right to Build” essentially lets you build and own a building on land owned by someone else typically an Indonesian national. They lease the land to a foreign-owned company (PT PMA), but here’s the deal. It is reserved for legal entities like companies. So, if you’re a foreign individual, you can’t snag the HGB title.
Initially, it’s valid for 30 years, but you can extend it for an extra 20- or 30-year period. And if your HGB title happens to expire, don’t worry; you can always apply for a fresh one.
You can use the building for your own purposes. Whether turning it into your private haven or setting it up for commercial activities.
The good news is that HGB titles are transferable – you can sell them, buy them, and even pass them down through inheritance. But remember, transferring from Hak Guna Bangunan to Hak Milik is a privilege exclusive for Indonesian nationals.
4. Hak Pakai (HP) | Right to Use
Hak Pakai, or the “Right to Use” certificate, essentially grants you practical rights without the complexities of the exclusive Hak Milik. Indonesians or foreign nationals with a residency permit, like KITAS, KITAP, or a Second Home Visa ITAS, can purchase property with this title.
But here’s the catch: each foreigner is limited to one Hak Pakai title for residential purposes. So, you can’t rent it out if it’s owned via Hak Pakai.
It is valid for 30 years, extendable for an additional 20 or 30-year period. And if you’re thinking about the long-term, the latest government regulation No.103/2015 allows for a maximum of 80-year lease. Many foreigners found it attractive to have property ownership and land titles in Bali.
5. Hak Milik Atas Satuan Rumah Susun (HMSRS) | Strata Title Ownership on Multi-Story Building Units
The Indonesian property Strata title is your key to owning a piece of space in multi-story buildings in Bali.
The perks? You get to call a part of this multi-story building your own, often with modern amenities and horizontal-vertical ownership. The holder’s rights are limited to the unit itself, excluding the land. The land must maintain its Hak Milik title, while the building may retain the Hak Guna Bangunan title.
And don’t worry; if you’re a foreigner with a valid temporary residency permit (KITAS) or permanent residency permit (KITAP), you can snag an HMSRS title. But, foreign-owned units in a building are limited to a maximum of 49% of the total floor area. It’s no other than ensuring a harmonious coexistence within shared living spaces.
6. Hak Guna Usaha (HGU) | Cultivation Right on Land
The “Right to Cultivate” is a specialised property ownership and land titles in Bali for agricultural endeavours. Hak Guna Usaha allows both local residents and foreign-owned companies to engage in agricultural and farming activities on the land.
According to Article 28 of Act No. 5/1960, this title is valid for 25 years, with the option to extend for an additional 35 years. This title involves limitations on land size, cultivation practices, and a mandate for sustainable agriculture with government oversight.
Now, why should you consider HGU? If you have a green thumb and a heart for cultivation, HGU might be the avenue for you. It offers a pathway to fertile land, potential agricultural income, and to preserve Bali’s agricultural heritage.
7. Hak Pengelolaan (SHLP) | Right to Manage
This title represents one of the most tightly controlled land certificates you can acquire in Bali. In this scenario, the government retains ownership and control over the land, but it entrusts the holder with the significant responsibility of managing it.
In essence, when you hold a Hak Pengelolaan certificate, you essentially act as an extension of the government. It includes the day-to-day management and administration of the land. Moreover, it ensures it’s maintained and operated in compliance with regulations.
What property and land titles in Bali can foreigners opt to own property?
Foreigners have the opportunity to obtain certain property ownership and land titles in Bali. They include Hak Guna Bangunan, Hak Pakai, Hak Sewa Bangunan, Hak Guna Usaha, and Hak Milik Atas Satuan Rumah Susun.
It’s important to note that for some of these titles, like Hak Guna Bangunan, foreigners need to apply through a foreign-owned company (PT PMA). However, individuals with specific residency permits, such as KITAS or KITAP, or even with just a passport (with a certain amount of investment) can also individually apply for certain ownership titles.
Buy Safely with the Available Property Ownership and Land Titles in Bali
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