Hak Milik, Hak Pakai, Hak Sewa: A Legal Glossary for Property Investors
What Property Rights Are Available to Foreigners in Indonesia: Hak Milik, Hak Pakai, and Hak Sewa
Planning to invest in real estate in Indonesia? Then you’ll need to understand the local legal landscape—it differs significantly from European or American systems. Here, foreigners cannot hold absolute ownership, and all land remains under the jurisdiction of the state. Instead of conventional titles, Indonesia uses legal classifications defined under national land law.
This article will explain Hak Milik, Hak Pakai, and Hak Sewa—the three principal forms of property rights every investor should know. We'll break down who can access them, under what conditions, what rights each provides, and their associated risks.
Hak Milik — Right of Ownership (Available to Indonesian Citizens Only)
What Is Hak Milik?
Hak Milik (translating to “right of ownership”) is the most complete and powerful form of land ownership in Indonesia—akin to freehold titles in other jurisdictions. This right is perpetual; the holder can sell the land, pass it on through inheritance, use it as collateral, or transfer it to others.
Who Can Own It?
Hak Milik can only be held by Indonesian citizens. The law strictly prohibits foreigners from owning land under this right, regardless of visa status, Stay Permit (KITAS), or investor classification. Violating this regulation can lead to loss of rights and legal repercussions.
Common Misconception: Using Nominee Owners
Some foreigners attempt to circumvent restrictions by registering property under an Indonesian friend or spouse. In such cases, the local acts as the de jure owner while the foreigner manages or funds the property—this practice is legally prohibited. In legal disputes with the nominee or the state, the foreign investor has no standing. We strongly advise against engaging in these arrangements.
Hak Pakai — The Legal Path to Long-Term Use for Foreigners
What Is Hak Pakai?
Hak Pakai is a regulated right to use land or property, granted by the government or a private owner. It enables foreigners to legally use a plot or property for an extended period under specific conditions.
Terms and Conditions
- Initial term: up to 30 years
- Extension: additional 20 years, with a further possible extension of 30 more years
- Total usage period: up to 80 years
- Registered through the National Land Agency (BPN)
- Transferable, mortgageable, and registrable under stated conditions
Eligibility
Foreign nationals with a Stay Permit (KITAS or KITAP), Indonesian citizens, and legally established companies in Indonesia may obtain Hak Pakai. It can be issued to individuals or legal entities.
Common Use Cases
- Purchasing a villa in Bali or Lombok as a foreigner with a KITAS
- Building a personal residence for long-term living
- Acquiring property for rental income or business use
Hak Sewa — Long-Term Lease for Foreigners
What Is Hak Sewa?
Hak Sewa is a formal lease agreement that grants the right to lease land or property for a fixed period. It is the most accessible and flexible legal option for most foreigners who do not possess local citizenship or a Stay Permit. Although it does not confer ownership, Hak Sewa offers lawful and long-term usage rights.
Key Features of Hak Sewa
- Term: up to 25–30 years with potential extensions
- No need for KITAS, KITAP, or a registered company
- Available to individuals
- Lease must be notarized and registered
- Property can be sublet if permitted by contract
Limitations
Hak Sewa does not grant ownership of the land—you cannot sell, inherit, or mortgage the property without the owner's consent. It is a lease, not a proprietary title. Still, within Indonesia’s complex legal context, Hak Sewa remains a legally safe and predictable option.
Comparative Table of Property Rights
| Type of Right | Eligible Owners | Validity Period | Inheritance Allowed | Sale Allowed |
|---|---|---|---|---|
| Hak Milik | Indonesian citizens only | Unlimited | Yes | Yes |
| Hak Pakai | Foreigners with KITAS/KITAP, Indonesian citizens | Up to 80 years (30+20+30) | Possible (under conditions) | Yes, with restrictions |
| Hak Sewa | Any individual or legal entity | Up to 30 years, renewable | No | No / only with owner's consent |
How to Choose the Right Property Right for Your Situation
Your choice will depend on investment goals, time horizon, residency status, and your willingness to navigate legal responsibilities.
- Have a long-term Stay Permit (KITAS/KITAP) and plan to reside in Indonesia? — Hak Pakai is your best fit.
- Looking to rent or invest in a villa in Bali? — Hak Sewa offers the simplest route.
- Planning to build a family home and your spouse is Indonesian? — Hak Milik can be registered in their name, but be aware of legal risks in inheritance or divorce.
Conclusion: How to Avoid Mistakes When Buying Real Estate
The legal status of real estate in Indonesia is a cornerstone of any safe investment. Ignorance can result in loss of rights or serious complications. Hak Milik is exclusive to locals, Hak Pakai is a viable structured solution for foreigners with residency, and Hak Sewa is the most limited but legally clean option.
Before making a purchase, we recommend:
- Consulting with a licensed land law attorney
- Checking land status in the official land registry (Sertifikat Tanah)
- Avoiding nominee ownership schemes
- Signing agreements before a notary and registering with the National Land Agency (BPN)
Remember: success in Indonesia’s real estate market starts with understanding the laws.
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Real Estate in Indonesia: What Property Rights Are Available to Foreigners — Hak Sewa, Pakai, Milik
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Discover which property rights you can access as a foreigner in Indonesia: Hak Milik, Hak Pakai, and Hak Sewa. Legal details, terms, restrictions, and expert tips.
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