Apartment ownership — legal status in Indonesia
This article covers apartment ownership in a legal context. It is separate from my article on land ownership.
Apartment unit ownership rights (hak milik atas satuan rumah susun)
The Dutch refer to apartment ownership has ‘appartmentsrechts’. This is a good term, because it does not tend to mislead in the way that the words ‘hak milik’ in the Indonesian version does. The key words in the Indonesian phrase are ‘atas satuan rumah susun’. The difference here between the ‘hak pakai atas tanah’, ‘hak milik atas tanah’, and the ‘hak milik atas satuan rumah susun’ is the object of the right — land in the first cases, and an apartment unit in the last.
In fact we can talk of owning rental rights to land, owning usufructuary rights to land, or owning ownership rights to an apartment unit, and in principal all rights can be bought and sold — the real question is to what extent the rights themselves are limited.
The types of apartment unit defined by law:
- rumah susun komersial — for profit
- rumah susun umum (general) — for low-income population
- rumah susun khusus (special) — to meet special needs
- rumah susun negara (state) — for civil servants/staff
Hak milik atas satuan rumah susun can be issued over land that is:
- hak milik
- HGB/Hak Pakai without underlying hak (i.e. ‘land directly controlled by the state’) — by omnibus law this can be directly extended when the apartment building is signed off, giving a total of 50 years from initial issue.
- HGB/Hak Pakai with underlying hak pengelolaan (state management rights’) — by omnibus law, this can be directly extended and renewed giving a total of 80 years from the initial issue.
The ownership (hak milik) of an apartment represents the ownership of a distinct apartment unit, as well as shared ownership of shared facilities and communal areas. However, in the case where the underlying primary land right is a limited one (HGB/Hak pakai), then the ending of that right will mean the ownership of the apartment no longer exists either.
The ownership is proved by a surat hak milik atas rumah susun (SHMRS).
Ownership of an apartment unit by a foreigner/eligibility.
The law about foreign apartment ownership is currently somewhat muddled.
Firstly, the primary source of law on foreign apartment ownership is NOT the agrarian law. The original apartment law was in 1985, and was repealed & replaced in 2011. Apartments are not regulated under the agrarian law, so there is no need to look there for guidance.
Secondly, the 2011 law provides for regulations to be made about eligibility apartment ownership (it’s not directly in the law).
The 2020 Omnibus law (11/2020) now for the first time in primary legislation (as distinct from secondary regulations) regulates the ownership. This is article 144 of the omnibus law.
This provides:
- Indonesian citizens
- Indonesian legal persons
- Foreigners who have a permit in accordance with regulations
- Foreign legal persons with representative in Indonesia
- International institutions or foreign missions who are in, or have representative in Indonesia
can own hak milik atas satuan rumah susun.
In the case of foreigners, the underlying land must be hak pakai or HGB (and not hak milik).
The ownership of foreign houses & apartments was regulated by 2015 Government Regulation and 2016 Ministerial Regulation. The 2015 & 2016 regulations provide that a foreigner can buy an apartment subject to minimum price:
- 3 billion for Jakarta
- 2 billion for Banten and Bali
- 1.5 billion for East Java
- 1 Billion for West Java, Central Java, Yogyakarta, West Nusa Tenggara, East Kalimantan, South Sulawesi, North Sumatra
- 750 million elsewhere
While the 2015 government regulation has been replaced, the 2016 has not, so these provisions should still be valid, and not yet replaced by the 2020/2021 rules. The 2015/2016 rules provide for:
- a hak pakai status which automatically converts to/from hak milik when purchased by a foreigner, valid for 30 years, extendable for 20, and renewable for 30 years, on new apartments.
- where the underlying land right is for a shorter period than that, a hak pakai status that matches the underlying right.
Since most apartments are on HGB land (since the building of an apartment is generally done by a development company, and companies cannot own hak milik), it follows that ownership of apartments is not really land ownership, but a limited right, and is quite properly not the subject of agrarian law bans on ‘ownership’. The 2020/2021 reforms will allow foreigners to ‘own’ apartments on the same basis as Indonesians; i.e. both will be restricted by an 80 year term in most cases, and the foreigner will no longer have a different name (hak pakai) on their certificate nor have to arrange extension/renewal separately to that of the building.
Certificate of ownership of apartment unit building (surat kepemilikan bangunan gedung satuan rumah susun, or SKBG sarusun)
The SKBG is a ‘certificate of ownership’ not issued by the land certificate agency, but by local government. It is issued on the basis of land status created under the 1960 law — certain land by the Agrarian law is defined as waqaf (forever for religious purposes), or belonging to state bodies. This land cannot be sold, but can only be rented. A 60 year lease is issued for the land, and then a 50 year SKBG is issued on the basis of the lease. The length of the lease is said to relate to the expected warranty on a new building, not any limit on lease terms under Indonesian law.
Since the underlying land right is ‘hak sewa’ (rental rights), the ‘ownership’ is not a concern of the land agency, since rental rights themselves cannot be issued with a land certificate, merely a rental agreement.
There are some references to SKBG specifically for foreigners, however under the apartment law, SKBG should relate specifically to ‘umum’ and ‘khusus’ apartment units, which are unlikely to be appropriate for foreigners. Foreigners should just buy apartments which are SHMRS.
Legal references
