When it comes to property ownership in Indonesia, the laws can be complex, particularly for couples where one spouse is Indonesian. While the Indonesian government allows foreigners to own certain types of properties, restrictions apply to ensure that Indonesian citizens are given priority. As such, it is crucial for couples to understand the legal nuances involved in property ownership to avoid potential disputes and ensure their investment is secure. This article aims to provide a comprehensive guide on property ownership laws for couples with an Indonesian spouse, including the types of properties foreigners can own, how to navigate joint ownership with an Indonesian spouse, and the legal requirements for property transactions.
There are several laws that governing this matters, however it is rather tedious and lack of action to educate the general public on what these law governs. Here are some of the Rules and Regulations:
This law was officially named UU No 5 Tahun 1960 concerning Basic Agrarian Regulations, which regulates rights to land, water and air. It also includes basic rules and provisions for control, ownership, use or utilization of national agrarian resources in Indonesia, land registration, criminal provisions and transitional provisions.
Furthermore, this law is an affirmation that control and utilization of land, water and air must be carried out based on the principles of justice and prosperity for the development of a just and prosperous society.
In this law, foreigner could only rent and or owned a short term strata titled property.
In this law, it has been clearly mentioned that Indonesians would lose their right to own land and/or property (freehold) once they are married to a foreigner. Furthermore, this law only recognize Prenuptial agreement sans Postnuptial agreement.
In this constitutional court decision, the Article 29 of Indonesian Marriage Law is declared unconstitutional. Article 29 of Indonesian Marriage Law governs the rules on invalidity of Postnuptial Agreement.
Without any nuptial agreement, based on Agrarian Law, indonesian spouse would lose their rights to own land and/or properties with freehold title as to prevent foreigner to own a land/properties with freehold title through marriage. Furthermore, this would complicate the matters if they own a property prior to their marriage to foreigner spouse OR if during the course of marriage one of the spouse decided to renounce their indonesian citizenship during the course of their marriage
Based on Marriage Law, either spouse would require consent from the other spouse for every transaction involving immovable property in Indonesia. Hence, sans nuptial agreement, any property own by the indonesian spouse, inclusive of their future properties gained via inheritance, would be automatically owned by the state by 50%. To make things worse, any sale process wouldn’t go through since the ownership of the property is unable to be determined.
The nuptial agreement shall stipulate that the foreign spouse agrees to transfer the ownership of a property in Indonesia they bought together to the indonesian spouse, hence preventing the state from taking control of half of it (Perjanjian Pisah Harta).
Fortunately, after the Constitutional Court Decision No. 69 / PUU-XIII / 2015, couples in a mixed marriage could have their nuptial agreement made prior or after their marriage. This is a breeze for every mixed marriage couple.
Declaration: This post is by no means to be regarded as legal advise, kindly consult your lawyer/solicitor.
Important: The information and opinions in this article are for general information purposes only. They should not be relied on as professional financial advice. Readers should seek independent financial advice that is customised to their specific financial objectives, situations & needs. This advertisement or publication has not been reviewed by the Monetary Authority of Singapore.
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