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What Happens When a Foreigner Purchases Property in Indonesia Under Their Local Spouse’s Name?

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.

What Happens When Foreigners Buy Property in Indonesia under Their Local Spouse’s Name

Under the Marriage Law in Indonesia, when an Indonesian citizen is married to a foreigner in Indonesia or outside Indonesia, the Indonesian citizen in the mixed marriage may lose the freehold title (Hak Milik) of his/her land ownership.

It is because the foreign spouse doesn’t have the right to hold the freehold title and assets including Hak Milik are considered joint property of the foreigner and the Indonesian national, according to the agrarian regulations.

Thus, the Indonesian spouse must release the land by granting or selling it, within 12 months upon the acquisition of the land. If the land is not released within the specified period, the owner’s land rights will be removed automatically and it will then belong to the state.

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 realise 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.

How Cekindo can Assist

One of the advantages of a prenuptial and postnuptial agreement when buying a property in Indonesia is to regulate how your assets and property are distributed.

If you do not have a prenuptial or postnuptial agreement in place, the Indonesian Law will decide how to divide the certain property of yours purchased during the marriage.

Cekindo can help you draft a valid prenuptial and/or postnuptial agreement that meets the requirements of the law in Indonesia.

With our assistance, you will have proper execution of your property division and distribution in the unfortunate event of a divorce or death. Each province or state may have different legislations governing prenuptial or postnuptial agreements.

Please contact our qualified professional legal consultant for further information. Fill in the form below.