Ownership of Land in Indonesia, for Mixed-Marriage Couples11 February 2020 by Ade
As we have mentioned numerous times before, the nominee structure as a means to obtain absolute ownership of land by a foreigner, is illegal.
However, when land ownership comes into question, and when it involves marriage between a local and a foreigner (even if the intentions are good), the law can make things complicated.
According to the Indonesian Marriage Law (1974), Article 1, mixed marriages can result in the Indonesian spouse losing his or her freehold land and the right to purchase more land under freehold title. The law’s intention is good - to prevent so-called marriages for the sake of owning land for foreigners under joint assets.
This is because of Article 35 of the same law, which states that unless stated otherwise, acquired property and other assets become joint marital property of the couple. So, if one of the spouses is a foreigner, the property cannot be counted as joint marital property, and in effect, cannot be owned by the couple.
However, this is a great disadvantage for many honest Indonesian citizens who are tied into an honest marital commitment with their non-Indonesian spouse.
To solve this problem, it is very important to form a prenuptial agreement which has the ability to separate the Indonesian citizen’s property assets from the joint asset agreement under the future marriage.
If you are recently married to a foreigner (or your spouse is Indonesian), and for some unfortunate reason, you have not been informed about Article 1 of the 1974 Marriage Law, then it is imperative you continue reading.
What is the consequence of not having set up a prenuptial agreement to separate assets? The Indonesian spouse must release their freehold property within one year of the marriage. The release can be done by selling or granting it.
If selling or granting the land is not possible, or if you or your spouse still consider buying a freehold property as a crucial part of one’s life, there is still hope. You can now make a postnuptial agreement to distinguish which asset belongs to the Indonesian spouse and is to be controlled indefinitely.
Due to the possibility of the postnuptial agreement, there has been revisions of the law that is, frankly, still unclear. Some parties have been able to own Hak Milik properties, even though one’s spouse is a foreigner. Some parties have claimed not to lose their freehold land after marrying the foreigner for many years.
The good thing about this uncertainty is that you can always hire a lawyer to clarify things for you. As a disclaimer, this article is NOT legal advice and should be taken with a grain of salt.
Bali Coconut Living is a property agent in Bali that specializes in leasehold and freehold properties. If you are a foreigner looking to find a hassle-free leasehold arrangement, visit our website to learn more. Browse through our portfolio of villas and land, for a secure and profitable investment.