Hak Pakai: the right the regulation wrote for a foreigner with a house here

Not a workaround and not second best. For a foreigner’s landed house in Indonesia, hak pakai is what the regulation says the answer is.

If you are a foreigner who intends to live in a house in Bali, hak pakai is the right the regulation was written for. That is a stronger statement than it sounds: article 71(1)(a) of PP 18/2021 does not present hak pakai as one option among several for a foreigner’s landed house. It presents it as the answer.

What the right actually is

Hak pakai adalah hak untuk menggunakan dan/atau memungut hasil dari tanah yang dikuasai langsung oleh Negara atau tanah milik orang lain…

Hak pakai is the right to use and/or take the produce of land which is directly controlled by the State or which belongs to another person…

UUPA (Law 5/1960) art. 41(1)

Two things follow from that definition and both matter. First, hak pakai is a right over land, not ownership of land. The building can be yours outright; the land underneath carries a registered right with a term on it. Second, the land it sits over can be State land or someone else’s freehold — and the second case is a lawful, ordinary arrangement that people confuse with a nominee structure because it also involves an Indonesian name on a hak milik certificate. It is not the same thing at all, and the difference is worth understanding before anyone explains it to you in a sales meeting.

Foreigners are named in the regulation

There is no ambiguity to navigate here. Article 49 of PP 18/2021 splits hak pakai into a fixed-term right and an indefinite one, and then lists who gets the fixed-term version: Indonesian citizens; Indonesian legal entities; foreign legal entities with a representative here; religious and social bodies; and, at sub-paragraph (e), Orang Asing — foreigners. The implementing regulation repeats the list verbatim at article 111(2).

The indefinite version — hak pakai selama dipergunakan, for as long as it is used — is reserved at article 49(3) for government bodies, village administrations and foreign missions. It is not available to you, and where you see “hak pakai with no time limit” advertised, that is what is being misdescribed.

The term: 30 + 20 + 30, and what that really means

Article 52(1) gives hak pakai over State land or hak pengelolaan a maximum initial term of 30 years, an extension of up to 20, and a renewal of up to 30. Eighty years is the ceiling and it is a good deal longer than most Bali leases.

That ceiling is for hak pakai over State land. Hak pakai granted over someone else’s freehold — the Indonesian owner keeps hak milik and grants you the right by a PPAT deed — runs at most 30 years, renewable only by a new grant deed (PP 18/2021 art. 52(3)). There is no extension limb, and renewal is a fresh grant the owner has to agree to. On that route the horizon is thirty years and the second thirty depends on the landowner, which puts it closer to a registered lease than to the eighty-year ladder. Ask which of the two a listing’s “hak pakai” is: the certificate says what land it sits on.

The word doing the work is “application”. Each stage is applied for, and article 125 of the implementing regulation sets out what has to accompany the application: the certificate, the land registration information, a survey plan if the land is re-measured, any mortgagee’s consent — and, if the applicant is a foreigner, the immigration document. That last requirement repeats at every stage.

Selling it has a step of its own. Transferring hak pakai over State land needs a transfer permit, obtained before the deed (PMNA 3/1997 art. 98(1)(b), as amended by Permen ATR/BPN 16/2021) — so a resale has a permit in its timetable that a lease assignment does not. What the PPAT must check before any deed.

The limits on a foreigner’s house

Article 186(1)(a) of Permen ATR/BPN 18/2021 caps a foreigner’s landed house three ways at once:

• the house must be in the luxury category as defined by legislation;
• one parcel per person or per family;
• the land must be no more than 2,000 square meters.

Article 186(2) allows a departure from the parcel count or the area where the acquisition has a positive economic and social impact, with the Minister’s permission. Treat that as an exception that exists, not as a planning route.

There is also a minimum price, and we do not know what it is. Permen ATR/BPN 18/2021 art. 187(2) states that the price of a home a foreigner may acquire is set by a Ministerial Decision. That decision is not published in the national legal database we read the rest of these rules from, so we have not quoted a figure. Sites that print one are quoting a secondary source, not the instrument. Why we handle it that way.

Buying a house that is currently freehold

Most attractive houses in Bali are held under hak milik, because most owners are Indonesian. You can buy one. What you cannot do is hold it as freehold, and the regulation handles this by conversion rather than by prohibition.

Article 187(3) provides that where the acquisition is a landed house held under hak milik or HGB, the right is converted into hak pakai. Article 158 approaches it from the other side: a foreigner who is not entitled to hold hak milik or HGB may only apply to convert those rights into hak pakai. So the freehold does not travel with the house. It stops at the transaction and a hak pakai comes out the other side, with a term starting from the grant.

This has a practical consequence that catches buyers out. The certificate you were shown during viewings — the seller’s hak milik, perpetual, unconditional — is not the certificate you will hold. Ask to see the conversion modeled before you pay a deposit, not after.

Planning to let it when you are not there? A foreigner’s home is granted with residential designation as one of four limits, and running accommodation is a separately licensed business — whether the right fits a rental plan.

What it costs to acquire

Acquiring hak pakai is an acquisition of a land right, so it falls inside BPHTB: article 44(3)(d) of Law 1/2022 lists hak pakai among the rights whose acquisition is taxed. The statutory ceiling is 5% at article 47(1), the base for a purchase is the transaction price at article 46(2)(a) — or NJOP if that is higher, under article 46(3) — and there is relief of at least IDR 80 million for a taxpayer’s first acquisition in that region, at article 46(5).

Every one of those is a ceiling or a floor set nationally, with the operative rate fixed by regional by-law. The costs page works through what that means in practice, and the areas pages explain why the regency you buy in is the one that sets your bill.

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