Buying Property in Indonesia under Local Spouse’s Name
For foreigners who want to buying property in Indonesia, mixed marriages are very common in Indonesia. This is because Indonesia is an international hub for doing business and vacation and many foreigners met the love of their lives and chose to settle down in the country.
In addition to immigration matters, one of the most talked-about issues of mixed marriage is the property ownership right, also known as Hak Milik, in particular.
In this article, you will read more about what happens to the property ownership right in a mixed marriage and how a prenup or postnuptial agreement in Indonesia is relevant.
Loss of Hak Milik Ownership Rights by Indonesian Wife/Husband
According to Law No. 1 of 1974 concerning Marriage (Marriage Law), in a mixed marriage, whether the marriage is conducted in Indonesia or outside Indonesia. In terms of land ownership, especially for Indonesian citizens, mixed marriages can result in an Indonesian citizen losing his Hak Milik (freehold) land.
In accordance with the agrarian regulations, an Indonesian citizen who owns land with Hak Milik ownership rights and is married to a foreign national must release the land. The release can be done by, for example, selling or granting it.
The release must be made within one year of the Indonesian citizen obtaining the land, or since the Indonesian citizen has been married to the foreigner. If the time passes and the land ownership rights are not released, then the land rights will be removed legally and the land will fall into the hands of the state.
The need for the release of land rights occurred because in the marriage between Indonesian citizens and foreigners, there was a mixture of assets. Hak Milik (freehold) property owned by Indonesian citizens are mixed with the foreigners’ assets as “joint property”.
Why It Is Important to Have a Prenuptial or a Postnuptial Agreement in Place
When a foreigner and an Indonesian national get married, they often need to ensure that they have drafted a prenuptial agreement before their marriage.
As discussed earlier, the Indonesian Law sees the mixed couple having the same rights of their assets including property. Therefore, if foreigners do not set up a prenup with their Indonesian spouses to indicate the division of assets, their local spouses are not permitted to own any property under their names.
There is another agreement known as a postnuptial agreement, or post-marital agreement, which functions similarly as a prenup. The postnuptial agreement is not covered by the Indonesian Marriage Law but it has its legal effect because it is stated under the Indonesian Civil Code.
For mixed couples who don’t have a prenup, they will often go for a postnuptial agreement when they realize that they do need to have a long-term financial plan and consider buying a property in Indonesia under the name of the local spouse.
For both types of agreements, either prenups or post-nuptials, do keep in mind that you need to take into account the possible change of circumstances such as disability and childbirth.
It is also essential that you review your prenup or postnup with a professional legal consultant every other year to make sure that they are up-to-date with the current laws and your circumstances.