Inheritance and exit: what each structure does when you stop

The regulations say a good deal about death, marriage and sale. All of it is cheaper to deal with before you buy than after.

Almost everything written about buying in Bali stops at the purchase. The regulations do not: they have quite a lot to say about what happens when you die, when a marriage ends, and when you want to leave. Those provisions are easier to satisfy before you buy than after, which is why this page is in the ownership cluster rather than filed somewhere at the back.

Death: the right survives, if the heir can hold it

Article 69 of PP 18/2021 handles inheritance in three short sub-articles. The first conditions a foreigner’s home ownership on holding an immigration document. The second provides that if the foreigner dies, the home may pass to their heirs. The third adds the condition that does the work: where the heir is themselves a foreigner, they must hold an immigration document too.

So the right is inheritable, and it is inheritable by someone who is in a position to hold it. A child who lives in Melbourne and visits for three weeks a year is not automatically that person. This is a solvable problem and it is far easier solved in advance — by choosing the structure with the estate in mind, or by putting the heir in a position to qualify — than by an estate discovering it in the middle of a probate.

The Basic Agrarian Law shows what the alternative looks like. Article 21(3) deals with a foreigner who comes into freehold by inheritance without a will or through marital community of property: they must dispose of it within one year, and if they do not, the right lapses by operation of law and the land falls to the State, with any encumbrances surviving. That article is about freehold, not hak pakai. It is quoted here because it is the clearest thing in the statute book about what Indonesian land law does when a right lands in hands that cannot hold it, and it is not sentimental.

Marriage, and the article that saves mixed couples

A foreigner married to an Indonesian sits at a genuine fork, and PP 18/2021 article 70 marks it precisely. Sub-article (1): an Indonesian citizen married to a foreigner may hold the same land rights as any other Indonesian citizen. Sub-article (2): those rights must not be marital community property, evidenced by a notarial separation-of-assets agreement between the spouses.

Read the second half carefully, because it is doing all of the work. Without a separation of assets, land acquired during the marriage is capable of being marital property. Marital property in which a foreign spouse has an interest is property in which a foreigner has an indirect interest in freehold, and article 26(2) has something to say about that.

The agreement is a notarial instrument. Couples who married years ago and only discover this when they try to buy should take Indonesian advice on what is still possible; it is a specific question with a specific answer and it is not one a website can give you.

Selling: three routes out, and they are not alike

Selling a hak pakai

This is a transfer of a registered land right and it behaves like one. For the buyer it is an acquisition, so BPHTB attaches — hak pakai is listed at article 44(3)(d) of Law 1/2022. For you it is a transfer, so the final income tax at PP 34/2016 article 2(1)(a) applies: 2.5% of the gross transfer value, borne by the seller.

The constraint that surprises people is not tax. It is that your buyer has to be someone capable of holding hak pakai, which is a smaller market than the market for freehold. The term also matters: what you are selling is the remainder of your 30, 50 or 80 years, and it is shorter than when you arrived.

Assigning a lease

You can only assign if the lease permits it and the landowner consents in the form the lease requires. Neither is automatic and both are worth confirming when you buy rather than when you sell. A lease is not a registered land right, so the acquisition duty that attaches to transfers of land rights does not attach here — article 44(3) lists the rights whose acquisition is taxed and hak sewa is not among them.

What does attach is the arithmetic. If you bought 25 years and held for 9, you are selling 16, and your buyer will apply exactly the reasoning on the leasehold page to your asking price. Leases get less liquid as they shorten, and the effect accelerates.

Exiting a PT PMA

Two doors, and choosing between them is the main decision.

Sell the shares. The company continues, the HGB never moves, and there is no transfer of a land right to tax. It is clean on the land side and the buyer is acquiring your company’s entire history — its filings, its tax position, its liabilities. Buyers who understand that will price it.

Sell the asset. The company transfers the land right, which is an ordinary transfer with ordinary transfer taxes, and you are left holding a company with cash in it and a liquidation to run. Simpler for the buyer, more work and more cost for you.

What to settle before you buy, not after

1. Who inherits, and can they hold it? If the honest answer is no, the structure is the wrong one, and that is much cheaper to discover now.
2. If you are in a mixed marriage, is there a notarial separation of assets? Article 70(2) is not optional wording. Mixed marriage, joint property and the prenup.
3. If it is a lease, is it assignable, and on whose consent? A lease you cannot assign is a lease you cannot sell.
4. If it is a company, which exit are you planning for? Share sale and asset sale want different housekeeping from day one.
5. What does your home jurisdiction do with this? Indonesian succession rules and your own country’s tax treatment of foreign property are separate problems and neither defers to the other.

None of these is expensive to answer at the start. All of them are expensive to answer at the end.

Questions on this specifically