When conducting a property sale and purchase transaction, many things need to be observed, starting with the track record of the housing developer, the status of the land/land to be built, and the various property deed in the sale and purchase binding agreement (PPJB).
Going through all the processes of buying a property properly and according to the law will give your property a legal basis.
Understanding the legal description of property
One of the most important factors is the legality of the house. Home legality plays an important role in the property possession process.
With complete and valid legalities, homeowners can avoid various legal issues in the future. Therefore, it is very important to understand the role and importance of home legality in property ownership.
Why legal property is important
Home legality plays a vital role in property ownership. First, home legality provides legal protection for homeowners. By having valid and complete documents, homeowners have certainty that their personal property is legal and legally valid.
In addition, home legality also acts as proof of legal possession. When buying a house, it is important to ensure that documents such as land certificates and sale and purchase deeds have been appropriately handled. These documents prove that you are the legal owner of the house and provide legal certainty in property transactions.
Furthermore, the legality of the house is also important in transferring property ownership. If one day you want to sell the house, its complete and valid legality will facilitate the sale and purchase transaction process. Prospective buyers will feel more confident and trusting in buying a house that has clear legality.
List of important legal documents when buying property
When buying a house, you must pay attention to important letters or documents supporting home ownership. This is very vital to prove the legality of home ownership in the eyes of the law and avoid legal conflicts in the future.
1. Certificate of Land and Building Ownership
An important house letter you need is a certificate of ownership of land and buildings. Based on the type of right, there are three letters that prove ownership of land and buildings, namely:
- Certificate of Land Ownership (SHM)
- Building Rights Title Certificate (SHGB)
- Right to Use Certificate (SHP)
SHM is the strongest certificate of ownership because it means that as a certificate holder, you have the right to the land and the building on it.
Meanwhile, SHGB and SHP are ownership certificates for the right to use land and/or buildings. The legality of SHGB and SHP is only temporary. So, it would help if you extended it periodically according to the agreement with the legal owner.
When buying a house, make sure that the house has these three documents. It’s best if there is an SHM, as it means that the seller’s or developer’s ownership of the house is absolute, and you can complete the title transfer process after the sale process is complete.
2. Akta Jual Beli (AJB)
A sale and purchase deed or AJB is a letter issued when a house sale and purchase transaction is completed. This deed contains information on the sale-purchase transaction stated in the SHM.
If you are buying a second-hand house, you must ask the seller to show you the AJB to find out whether this is in accordance with the information in the SHM. The letter is a proof that a real estate is being transferred or mortgaged.
Also, check the name of the land deed official (PPAT) stated in the AJB and adjust it to the one stated in the SHM. The existence of a PPAT or notary in making the AJB is absolute to ensure the validity of the house sale transaction.
3. Certificate of Building Permit (IMB)
The IMB certificate is proof that the certificate holder has permission to build a building on a piece of land and useful for measuring the exact boundaries of the property. The local government issues this certificate, which contains information about the building area, land area, and land ownership.
Make sure the house you buy has an IMB certificate. If it doesn’t, you, as a homeowner, can later be fined around 10 percent, or your house can even be forcibly demolished.
4. Land and Building Tax (PBB) Letter
Next is proof of payment of annual land and building tax or PBB. This letter can prove that the previous owner of the house paid taxes, so you will not be taxed for the old owner’s negligence.
Ask the homeowner or seller for proof of PBB payments for the past few years. In addition to proving your tax compliance, you will also need this document later to take care of the name change in the SHM.
5. Proof of Bill Payment
When buying a used house, you also need to check the bill documents related to the house, such as water, telephone, internet, and electricity bills. Of course, we don’t want to be burdened with fines or other financial losses just because the old homeowner was not disciplined in paying these bills.
How to Ensure Home Legality in Property Ownership
There are several steps that can be taken to ensure the legality of a house before buying it. First, check important documents such as land certificates, deeds of sale, and other ownership papers. Make sure that these documents are complete, valid, and in accordance with applicable regulations.
Next, check the ownership history of the house. Make sure there are no disputes or legal issues involving the property in the past. You can ask for help from a legal expert or notary to do this check and ensure that the house is free from legal issues.
Also, ensure that all property-related payments have been made correctly. Check that property taxes and other fees have been paid on time. This will ensure that the house has no outstanding debts or financial issues that could impact its legality.
Requirements for Expats to own legal property in Indonesia
The government has regulated provisions regarding foreigners buying houses in Indonesia through several Government Regulations (PP) and Ministerial Regulations (Permen), such as:
Government Regulation (PP) No.103 of 2015 concerning Ownership of a Residential House or Residence by Foreigners Residing in Indonesia.
Government Regulation No.18 of 2021 on Management Rights, Land Rights, Flat Units, and Land Registration
Ministerial Regulation (Permen) of Agrarian and Spatial Planning/Head of the National Land Agency No.18 of 2021 on Procedures for Determining Management Rights and Land Rights.
Not only landed houses and flats or apartments, there are several criteria related to houses that foreigners can buy in Indonesia.
For example, the house must not have a Certificate of Ownership (SHM).
Property ownership rights with SHM can only be owned by Indonesian citizens (WNI), as stated in Law No.5 of 1960.
So, what criteria can foreigners own houses or apartments with?
The rules are stated in Article 185 of the Minister of Agrarian and Spatial Planning/Head of the National Land Agency No.18 of 2021.
Requirements for expats to buy property in Indonesia
These various terms and regulations are important to comply with so that the home purchase application is considered legally valid.
Some of these regulations and requirements are:
1. Having a KITAS
The first requirement for foreigners to buy a house in Indonesia is to have a KITAS.
As mentioned above, KITAS is an absolute requirement for foreigners to own property in Indonesia.
The Ministry of Law and Human Rights issues KITAS.
This card must be renewed every two years.
Meanwhile, to get a KITAS, a foreigner must first work in Indonesia.
With KITAS, foreigners’ motivation to buy property is not limited to investment but also includes living in it.
2. There is a Time Limit for Right of Use
Another regulation and requirement for foreigners to buy a house in Indonesia is to comply with the period of use and the right of use.
Foreigners who want to buy a house in Indonesia have a maximum time limit of 80 years as long as they have a residence permit.
The regulation regarding the time limit of the right of use is contained in Article 6, Paragraphs 1-3, which reads as follows:
- Single houses granted on hak pakai land are valid for 30 years.
- Hak pakai can be extended for 20 years.
- After the extension period ends, the hak pakai can be renewed for another 30 years.
3. Price Limit on Residential Houses that Foreigners Can Buy
Another regulation refers to the price limit set if foreigners want to buy a house in Indonesia.
The regulation is stated in Ministerial Decree No.1241/SK-HK/IX/2022 on the Acquisition and Price of Residential Houses for Foreigners, namely:
Price Limit for Landed House
- DKI Jakarta: IDR10 billion
- Banten: IDR5 billion
- West Java: Rp5 billion
- Central Java: Rp3 billion
- Special Region of Yogyakarta: IDR5 billion
- East Java: IDR5 billion
- Bali: IDR 5 billion
- NTB: IDR 3 billion
- North Sumatra: Rp3 billion
- East Kalimantan: Rp2 billion
- South Sulawesi: Rp2 billion
- Other regions or provinces: Rp1 billion
How to choose a trusted real estate agent
Experience and Extensive Network
Experience is a significant factor in choosing a real estate agent. An agent with extensive experience has in-depth knowledge of the property market and is able to provide the best advice to meet your needs.
In addition, an agent with a wide network will open up more property options for you.
Credibility and Reputation
The credibility and reputation of a property agent should also be considered. You can check reviews and testimonials from previous clients to assess their reputation.
Property agents with a good reputation are usually more trusted and able to provide better service.
Good Customer Service
Good customer service is key to determining the best property agent. A good agent will always be responsive to your questions, provide advice, and help you throughout the property buying and selling process.
Make sure the property agent you choose is ready to provide good support and communication.
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