Many foreign buyers find the process of purchasing property in Lombok challenging due to Indonesia’s unique legal structure and unfamiliar terminology. To help make this process smoother, here’s a breakdown of essential property-related terms you’ll encounter in Lombok:
Land titles
- Freehold (Hak Milik): Permanent ownership reserved for Indonesian citizens.
- Leasehold (Hak Sewa): Long-term leases where foreigners can legally own property for up to 30 years, with the option to extend. Ownership remains with the Indonesian landowner, but rights are leased to the foreign buyer.
- Hak Guna Bangunan (HGB): A title for commercial use, available to foreign-owned companies (e.g., PT PMAs) for long-term property management. HGB certificate is valid for 30 years and can be extended to 20 and renewed for another 30 years, totaling 80 years.
- Hak Pakai: Rights similar to Hak Sewa but specifically for residential purposes and with more paperwork involved.
- Strata Title: Mostly used for apartment units, a rare option in Lombok as villa developments dominate.
Legal and Administrative Terms
- Notary (PPAT): A key player in property transactions, managing legal documents and land registry.
- Badan Pertanahan Nasional (BPN): The National Land Office that registers all land transfers and property title changes.
- Zoning: Different areas in Lombok are classified into residential, touristic, or agricultural zones, which impacts property use and permits.
Key Permits & Licenses
- IMB & PBG: Building permits required for property construction or renovation. Properties in restricted zones cannot obtain these permits.
- Pondok Wisata: License required to operate villas as short-term rentals, only applicable in touristic zones and must be registered under an Indonesian individual or company.
- PT PMA: A foreign investment company structure allowing foreigners to legally acquire and manage property in Lombok through HGB title.
Taxes
- PBB: Annual property tax paid by tenants or leaseholders.
- NJOP: The tax-assessed value of a property, determining how much buyers and sellers owe in transfer and acquisition taxes.
- BPHTB: The 5% tax on land and building acquisition.
- Income Tax (Pengalihan Hak): A 2.5% tax on property transfers paid by the seller.
- Lease Income Tax: A 10-20% tax on lease transactions, depending on the seller’s tax status.
- NPWP: Tax identification number necessary for anyone generating income or living long-term in Indonesia.
Understanding these terms will help you navigate Lombok’s property market with ease. As always, consult with local experts to ensure a smooth and legally sound purchase process.
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