Type of Property
Ownership in Indonesia
To ensure safe and secure land ownership in Indonesia, Lombok Prime Land has invested significant time and resources in establishing the correct legal structure to ensure full compliance with Indonesian foreign ownership laws and international investment regulations.
Freehold (Hak Milik/SHM)
- Characteristics:
- Strongest ownership right
- Perpetual duration
- Inheritable
- Can be used as collateral
- Only for Indonesian citizens
- Cannot be owned by foreign
nationals or corporations
- Legal Basis:
- Basic Agrarian Law No. 5/1960
- Article 20-27
- Highest form of land rights
- Advantages:
- No time limit
- Maximum property value
- Complete ownership rights
- Full transfer rights
- Can be converted to other rights
Right to Build (Hak Guna Bangunan/HGB)
- Characteristics:
- Right to construct and own buildings
- Limited time period (30 years)
- Extendable for 20 years and 30
Years - Can be upgraded to SHM
- Available for Indonesian citizens and
legal entities include PT.PMA
- Time Periods:
- Initial period: 30 years
- Extension: 20 years
- Renewal possible after expiry
- Total possible duration: 80 years
- Legal Aspects:
- Must be registered
- Requires land use permit
- Can be transferred
- Can be used as collateral
- Subject to government regulations
The HGB title is the most preferred and safest way for foreigners to own properties in Indonesia, and it offers several key advantages. Firstly, with the HGB title, foreigners gain full ownership rights over the land. This means they have control and can utilize the land according to their needs.
Right to Use (Hak Pakai)
This title grants the right to use and control land for residential or other specific purposes. It is typically granted for a period of 25 years and can be extended for
another 20 years.
Leasehold (Hak Sewa)
This is a land title based on a lease agreement, allowing the holder to use the land for a specified period.
