How To Buy Land In Indonesia?

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By:

Team of Hukumindo

Previously, the Hukumindo.com platform has talk about "Principles of Buying Land in Indonesia" read also: "How To Check The Validity of Indonesian Advocates?" and "How to Obtain Indonesian Citizenship?", and on this occasion we will discuss about 'How To Buy Land In Indonesia?'

We assume that you have understood the basic principles of buying land in Indonesia as previously article published. As a continuation of the article, this article will discuss the practical stages of buying land in Indonesia. According to the author's experience, there are at least 6 stages that must be passed when you are going to buy land in Indonesia. 

The First Stage: Research The Land Object You Are Going To Buy

At this early stage, it is important to research the suitability of the land certificate that you are going to buy with the land that is the object of the certificate. Pay close attention to whether the land certificate you are going to buy is registered in the relevance National Land Agency office. If the land certificate that will become the object of sale and purchase is registered in the National Land Agency, then the buying and selling process can be continued. Pay close attention to whether the data listed on the land certificate that you are going to buy is in accordance with the facts on the ground. Pay attention to the address of the land object that you are going to buy, whether it is in accordance with the facts on the ground. Also pay attention to the land area, whether it is appropriate. Also pay attention to the boundaries of the land that you will buy whether it is appropriate. Also pay attention to other details related to this matter. 

Second Stage: Research The Land Seller

Pay attention to the compatibility between the Owner's Name on the land certificate and the Identity Card of the person who will make the sale. When going to sell land, in general, a proof of payment of Land and Building Taxes (PBB) for the last 5 years is also required. Pay attention to the suitability and compliance of the seller with this tax. In the event that the seller is a married couple, a letter of approval from the spouse is required. Likewise, if someone is divorced, a divorce certificate is needed. Also pay attention to other accessories from the seller such as the Taxpayer Identification Number (NPWP) and other things as details. 

Stage Three: Prepare Your Legal Eligibility As Buyer

As a buyer, you must have considered the economic aspects of buying land later. Things such as access to major roads, distance to the port, availability of adequate electricity, land prices, availability of labor around the land location, calculation of labor wages, availability of production raw materials, security, and other things you must have consider beforehand. After considering the economic aspects of the land that you will buy, then the buyer must prepare himself to be legally eligible as a buyer. It is assumed in this article that the buyer is a limited liability company, not an individual. In such a case, a Company Establishment Deed, Company Taxpayer Identification Number (NPWP), Company Registration Certificate, Board of Directors' Identity Card, and other necessary accessories are required. 

Fourth Stage: Process of Making Sale and Purchase Deed

If the object of land that will become the object of sale and purchase has been examined by you and is suitable for a transaction, and the Seller has also fulfilled the requirements to conduct the transaction and you as the Buyer are also legally eligible to purchase the land, then the sale and purchase process can be carried out. 

If it meets the legal requirements for buying and selling, then The Deed of Sale and Purchase of land must be made by the Land Deed Maker Official (PPAT) and or Notary. The making of the Sale and Purchase Deed must be attended by the seller and the buyer. And at least two witnesses need to be present. The Land Deed Making Officer (PPAT) will read and explain the contents of the deed. If the seller and buyer agree with the contents, the deed will be signed by the seller, buyer, witness and the Land Deed Making Official (PPAT). The deed is made in two original sheets, one is kept by the Land Deed Making Officer (PPAT) and the other sheet will be submitted to the National Land Agency office for transfer of names. Copies will be provided to both the seller and the buyer.[1]

In addition to the components of the basic cost of buying land that you have to spend, please be aware at this stage that both the Seller and the Buyer will be subject to tax on the transaction to be executed. The seller must pay income tax (PPh). While the Buyer is required to pay Customs for the Acquisition of Land and Building Rights (BPHTB). Income tax (PPh) and Customs for the Acquisition of Land and Building Rights (BPHTB) can be paid at the Bank or Post Office. Before the Income Tax (PPh) and Customs for the Acquisition of Land and Building Rights (BPHTB) are paid off, the deed cannot be made. At this stage also consider other costs in detail.

Fifth Stage: Transfer of Ownership/Name to the Office of the National Land Agency

After the Sale and Purchase Deed (AJB) is completed, the Land Deed Making Officer (PPAT) submits the Sale and Purchase Deed (AJB) file to the relevant National Land Agency office for the transfer of names. The files submitted are include: a). A letter of application for transfer of name which has been signed by the buyer; b). Sale and Purchase Deed from Land Deed Making Officer (PPAT); c). Land Rights Certificate; d). Photocopy of the identity of the seller and buyer; e). And other necessary letters. 

After the file is submitted at the National Land Agency office, there will be a receipt that will be submitted to the Applicant. The name of the buyer as the holder of new land rights will be written on the pages and columns in the land book and certificate of ownership, with the signature of the head of the National Land Agency office or the appointed relevant official.[2] In reality, the process at this stage requires its own time. Regarding the process of transfer names at the relevant National Land Agency (BPN), you can authorize someone else to take care of it.

Sixth Stage: Master and Use the Land You Have Purchased

As the final part in the process of buying and selling land in Indonesia, while waiting for the transfer of names at the relevant National Land Agency (BPN), the land that you have purchased can be controlled and used. Present your ownership at the location of the land object that you have purchased. You have been able to do fencing/guardrail on the land that you have purchased. Either on the north, south, east and west sides of the land you have purchased. 

In the next stage, you have been able to build buildings on the land that you have purchased as part of the production equipment you need. At this stage, you as the new owner of the land that you have purchased, have been able to take benefit of it. As a legal practitioner, we recommend that you do Legal Due Diligence (LDD) first before making material transactions such as buying land, this is solely to avoid losses that may be incurred in the future. Related to this, please read our article entitled: "How to Avoid Fraud in Investment by Using Legal Tools". And if you have any issue with this topic, contact us, feel free in 24 hours, we will be glad to help you.

*) For further information please contact:

Mahmud Kusuma Advocate

Law Office

Jakarta - Indonesia.

E-mail: mahmudkusuma22@gmail.com

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References:

1. "Syarat Serta Prosedur Jual Beli Tanah dan Bangunan", www.cermati.com, diakses pada tanggal 2 November 2021 https://www.cermati.com/artikel/syarat-serta-prosedur-jual-beli-tanah-dan-bangunan

2. Ibid.