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According to Article 41 of Law Number 5 of 1960 on the Principles Provisions of Agrarian (“Agrarian Law”) [Note: sy sudah ingatkan berkali2 untuk gunakan terms yang sama dengan yang sudah kita buat dan ada di web kita[, Right of Use means right to use and collect the production over State Land or land which is owned by private parties. As stipulated in Article 42 of Agrarian Law, Right of Use can be granted to:
Indonesian citizens;
foreigners domiciled in Indonesia;
Indonesian companies established based on Indonesian law and domiciled in Indonesia; and
foreign companies having its representative office in Indonesia.
Assignment of Right of Use
According to Article 54 paragraph (3) of Government Regulation Number 40 of 1996 on Right to Cultivate, Right to Build, and Right of Use Over Land (“Government Regulation 40”), it is stated that the Right of Use can be assigned by the following reasons:
sale and purchase;
exchange;
capital participation;
grant;
inheritance.
Further, the assignment shall be registered to the Land Office (kantor pertanahan). For the assignment of Right of Use as a result of inheritance, Article 54 paragraph (7) stipulates that the assignment shall be evidenced with the testament or heir information document (surat keterangan waris) which is issued by the competent authority.
The Article 42 of Government Regulation Number 24 of 1997 on Land Registration (“Government Regulation 24”) has set out the required documents that must be provided by the heirs for land registration:
land certificate;
death information document (surat keterangan kematian) of the holder of Right of Use;
heir information document (surat keterangan waris).
Moreover, the elucidation of Article 42 of Government Regulation 24 stated that the transfer of right is occurred when the holder of Right of Use dies, which means the heir will become the new right holder. With regards to the party who has the right to become the heir, it will depend on the civil law that applies to the existing right holder.
Background
As we all know, earth, water, and natural resources contained therein controlled by the State and used as much as possible for the prosperity of the people (society). Land and buildings that build on it, in addition to fulfill the basic need, is also constitutes as profitable investment equipment. In other words, land and building have economic value. Therefore, it is reasonable that for those who obtained the right of land and the buildings to give some of the economic value that obtained, to the State through tax payments, especially Acquisition Levy of Right of Land and Building (“BPHTB”). BPHTB is now regulated in Law Number 21 of 1997 on Acquisition Levy of Right of Land and Building (“Law No.21/1997”), as amended by Law Number 20 of 2000 on Amendment of Law No.21/1997 (“Law No.20/2000”).
BPHTB
According to Law No.20/2000, it is stated that BPHTB taxes are imposed on the acquisition of rights of land and/or building. The subject of BPHTB is the individual or entity who obtained rights of land and/or building. The object of BPHTB is associated with the obtainment of right of land and/or building. The obtainment of right of land and/or building consists of:
a. transfer of right due to: sale and purchase, exchange, grant, grant bequest, inheritance, income in the company or other legal entity, resulted in the separation of rights of passage, the appointment of buyers in the auction, the implementation of judgments that have permanent legal force, mergers, consolidation business, business expansion and gifts.
b. conferral of new right due to the continuation of releasing of right, and other than releasing of right.
The rights of land that are subject to BPHTB are Right of Ownership, Right to Cultivate, Right to Build, Right of Use, Right of Ownership on Strata Title, and Right to Manage.
The taxable objects which are exempted from BPHTB shall be the taxable objects that are obtained by:
a. diplomatic representative, consulate based on reciprocal principle;
b. state for performing governmental duties and or development activity for public interests;
c. international organization or representatives of international organization as stipulated by the Minister Decree provided that they neither run business nor do other activities other than their functions and duties;
d. individual or entity due to right conversion or due to other legal acts without any change of name;
e. individual or entity due to endowments;
f. individual or entity for religious service usage.
Acquisition Value
According to Article 5 of Law No.21/1997, the tax rate of BPHTB is in the amount of 5% (five percent) of Acquisition Value of Taxable Object (“NPOPKP”). NPOPKP is the acquisition value of tax object (“NPOP”) reduced with the Acquisition Value of Non-Taxable Object (“NPOPTKP”).
The base of BPHTB imposement is the NPOP. BPHTB is applied for the transaction that exceeds the NPOPTKP, in which is determined regionally, with the maximum amount of Rp 60.000.000,- (sixty million Rupiah), with the exception of the acquisition of rights due to inheritance, gift, bequest which received by person/individual in the direct lineage one degree up or down with the grantor, including husband or wife, in which that the NPOPTKP is regionally determined with the maximum amount of Rp 300.000.000,- (three hundred million Rupiah).
The amount payable of BPHTB is calculated by multiplying the tax rate of BPHTB with NPOPKP.
According to Article 41 of Law Number 5 of 1960 on the Basic Principles of Land (“Land Law”), Right of Use means right to use and collect the production over State Land or land which is owned by private parties. As stipulated in Article 42 of Land Law, Right of Use can be granted to:
Indonesian citizens;
foreigners domiciled in Indonesia;
Indonesian companies established based on Indonesian law and domiciled in Indonesia; and
foreign companies having its representative office in Indonesia.
Further, as stipulated in Government Regulation Number 40 of 1996 on Right of Cultivation, Right to Build, and Right of Use Over Land (“Government Regulation 40”), Right of Use can be granted over a land with land status of:
state land;
land under Right of Management (hak pengelolaan);
land under Right of Ownership (hak milik).
Property ownership by foreigners is specifically stipulated in Government Regulation Number 41 of 1996 on Property Ownership by Foreigner Domiciled in Indonesia (“Government Regulation 41”). Article 2 of Government Regulation 41 states the type of houses which are allowed to be owned by foreigners:
houses built over state land;
houses built based on an agreement with the holder of Right of Ownership. The agreement shall be made before Land Conveyancing Officer (Pejabat Pembuat Akta Tanah);
condominium built under Right of Use over state land .
The Term of Right of Use
It is stipulated in Article 45 of Government Regulation 40 that the term of the Right of Use over state land is 25 (twenty five) years which can be extended for another 20 (twenty) years. The Government Regulation 40 has set out some requirements before the term of Right of Use can be extended:
The land is used according to the land use;
Conditions of grant of right have been properly fulfilled by right holder;
The right holder fulfills the requirements as the right holder as set out in the Government Regulation 40.
Further, for the extension of Right of Use, Article 47 of Government Regulation 40 states that the extension application must be submitted at the latest 2 (two) years before its expiration date.
Moreover, the Government Regulation 41 has set out different term for Right of Use for the houses that built based on an agreement with the holder of Right of Ownership, the term of agreement must not exceed 25 (twenty five) years which the agreement can be extended with another 25 (twenty five) years. However, the extension for another 25 (twenty five) years shall be made in a separate agreement between the foreigner and the holder of Right of Ownership. Further, the extension can be made provided that the foreigner is domiciled in Indonesia or for the case of foreign company, having its representative in Indonesia.
If the foreigner who owns the house that is built with Right of Use over state land or based on an agreement with right holder is not domiciled anymore in Indonesia, within 1 (one) year, the foreigner has to assign his right to other parties which fulfill the requirements to own the land. In the event the foreigner refuses to assign his right to other parties, the house which is built over state land will be controlled by state to be auctioned. As for the house built based on an agreement with the right holder, the house will be owned by the right holder.
Jerry Shalmont
Background
Nowadays, there are various kind of companies established in Indonesia. In term of construction, these companies require a building located on a land. Therefore, according to Law Number 5 of 1960 on the Principle Provisions of Agrarian, there are several rights over land. One of these rights over land is the right to build which can be defined as the right to establish and own a building on a land. The Government Regulation Number 40 of 1996 develops and improves this right to build. The right to build can be given or imposed on state land, land submitted to the right of management, and land submitted to the right of ownership. The right to build can also be used as collateral for loans pledged with mortgage rights.
Allocation of Right to Build
According to the Article 19 of the Government Regulation Number 40 of 1996 describes that right to build is given to Indonesian citizen and legal entities established under Indonesian law and domiciled in Indonesia. The right to build isn’t given to foreigners and foreign entities, so according to article 39 of the Government Regulation Number 40 of 1996 for foreigners and foreign entities, they only have the right to use. The right to build can be granted for a period of 30 years and can be extended for another 20 years. The right to build is given by a decision of the Minister or by an officer appointed upon the recommendation of the management right holders, and have been registered in the book of land in the land office.
Obligations of Holders of Right to Build
The holder of the right to build has to:
to pay money of which amount and terms of payment are specified in the decision , use the land in accordance with its allocation and requirements as stipulated in the decisions and its agreements;
preserve both land and existing building and preserving the environment;
surrender the land back to the State, the holder of Right to Manage or holder of Right of Ownership after the Right to Build is expired;
deliver the certificate of Right to Build which has expired to the Head of the Land Office.
Assignment of the Right to Build
In article 34 Government Regulation Number 40 of 1996, it is mentioned that the Right to Build can be transferred to another party, through a sale and purchase, exchange, capital investment, grants, and inheritance.
Expiration of the Right to Build.
The Right to Build expires if its term ends, is terminated before the term has expired if any requirement is not fulfilled, released voluntarily by the holders of their rights before the the term has expired, is revoked for public purposes, if the land is abandoned or destroyed.
Isrilitha Pratami Puteri