Indonesia’s property laws can be complex, especially when it comes to land ownership for foreigners and mixed-nationality couples. Here’s a breakdown of how mixed marriages affect land ownership in Bali, along with crucial points to consider if you’re planning to buy or build.

Understanding Indonesian Land Laws

In Indonesia, foreigners cannot directly own land under freehold title. However, if you are married to an Indonesian citizen, there are possibilities for your spouse to own land, with some important stipulations.

Mixed Marriage Ownership: Key Considerations

• Prenuptial and Postnuptial Agreements: For an Indonesian spouse to own land, a prenuptial or postnuptial agreement to separate assets is necessary. This agreement ensures that each partner owns their assets individually, not jointly.
  • Without such an agreement, any property acquired during the marriage is considered joint marital property, which can complicate matters.
  • Prenuptial agreements must generally be made before the marriage. However, as of 2016, it’s also possible to make a legal agreement to separate assets after marriage, allowing the Indonesian partner to own land in their own right.
• Joint Responsibility: Any guarantees on loans or debts taken during the marriage are a shared responsibility. Also, any legal processes regarding joint property require consent from both partners.

Avoiding Illegal Nominee Arrangements

It’s crucial to be aware that nominee arrangements, where a foreigner uses an Indonesian citizen as a proxy to “own” land, are illegal. These arrangements are not recognized under Indonesian law and can lead to severe consequences, including the government repossessing the land. Any documents associated with nominee arrangements are considered null and void.

What if You Are in a Nominee Arrangement?

If you are currently in a nominee arrangement, there are a few potential options for rectification:

• Form a Foreign Investment (PMA) company, which is permitted to own land with conditions.
• Transfer ownership to your Indonesian spouse through legal agreements.
• Sell the property.
• Become an Indonesian citizen.
• Convert the land title to a Hak Pakai (Right to Use) title. This is a fully legal option for foreigners with resident permits, which grants control of the land for a specific period.

Checklist for Buying Land in Bali If you are considering buying land in Bali, here’s a checklist to help you navigate the process:

• Engage a reputable PPAT: Land transfers and title deeds are drafted by a Land Deed Official (PPAT).
• Conduct thorough due diligence:
  • Verify the legal owner and ensure no outstanding debts or mortgages.
  • Confirm the exact boundaries of the land.
  • Check the zoning regulations to ensure it’s suitable for your intended use.
  • Verify the existence of any existing titles (leases).
  • Ensure there is legal public access to the land.
• Secure necessary building permits:
  • Obtain an IMB (building permit) in the name of the landowner before you build.
• Assess Land Stability and Infrastructure:
  • Verify the land’s stability.
  • Check the availability of electricity and water to the land.

Inheritance Considerations

If an Indonesian partner who owns land dies and the land is inherited by the foreign spouse, the foreigner must dispose of the land within 12 months, otherwise, the state can take possession of it.

Final Thoughts

Navigating land ownership in Bali requires careful attention to legal details, especially when mixed marriages are involved. It is always best to seek professional legal advice to ensure all transactions are conducted lawfully and your interests are fully protected.