What happens if a Company wants to buy land in Indonesia. ?

Buying land in Indonesia has some regulations tit tied to it. Especially if you are a company. Before we purchase a land or property we must understand some basic rights(HAK).

There are a couple type of rights in owning property in Indonesia (mentioned in the uniformed property act, we will list three of them as below:
  • Hak Milik – HM (Owners Rights), the highest level of rights in Indonesia. This rights can be inherited and is diminished for reasons of voluntary, the land vanished or the land is sold.This rights can be inherited and for the time being only Indonesian Citizens has these rights.
  • Hak Guna Bangunan-HGB (Building Use Rights)- This rights is the right that is given to the government to utilize a land to be used for agricultural, industrial, livestock and commercial business.This rights status is a time based right for maximum 30 years and can be extended to another 20 years and can be used for private use such as building a home.
  • Hak Pakai (Utilizing Rights) – is the rights status to utilize or get the goods from a land that is owned by the state or individual that is certified by the PPAT (the Authorized Land Act Certifier). It is usually for 10 years of utilization of land.
The Case : A company wants to buy land.

If you as an owner owns a land which has a rights status of Hak Milik (owner’s right) and a certain company is interested in buying that land for the commercial use of the company. Can the company purchase it from you?

No, it cannot. Because a company can only buy a property that is categorized as HGB. So you as the land owner, must convert the land from the Hak Milik status in to the HGB status. There is a fee for converting this at the PPAT. Usually the cost of this conversion is subjected to the buyer in this case the company that wants to buy your property.

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