There are a number of different types of title in Indonesia with the three principle types being:

Hak Milik – This form resembles to freehold title in UK, Australia, US and can only be held by and Indonesian individual.

Hak Pakai – This form is similar to leasehold title and is technically, the right of utilization of state land. The maximum length of lease is the issue that caused most discussion, with the stated maximum allowable lease terms varying between 20 years + additional 20 years renewal, 20 years + 30 years + 20 years, 25 years + 25 years up to 60 years + 60 years. At the current time, we feel that the longest lease term that investors can rely on is 25 years + a further 25 years.

Hak Guna Bangunan (“HGB”) – This is a type of leasehold title that includes land with the right of construction. This form of title is available to Indonesia individuals, Indonesian Companies, and Indonesian Companies controlled by foreigners, known as PMA’s. This type of title must be renewed every 20 years by payment of an HGB tax. The level of taxation is based on change of value in the land, but as the level of taxation is not fixed and is at the discretion of local Government, it is often the subject of much argument and frustration.