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Insights · 7 min read

Foreign National Heirs and Mixed Marriages: Inherited Land and the One-Year Limit

A foreign national heir still has the right to inherit, but cannot hold freehold title to land. Understand the one-year limit in the UUPA and how to plan for it.

Ibu Ratih (a pseudonym) has two children. The elder lives in Jakarta. The younger has lived in Australia since university, married there, and is now an Australian citizen. Ibu Ratih wants the family home and a plot of garden land to be divided fairly between the two one day. She has just heard from a relative that her younger child, as a foreign national (WNA), "is not allowed to own land in Indonesia". She wonders whether that means her child loses the right to inherit. (This illustration is fictional and anonymised.)

The answer is no. Foreign citizenship does not remove a person's standing as an heir. What is restricted is the type of land right they may hold. This distinction matters a great deal. Without planning, that restriction can end in the loss of the land right itself.

Freehold title is only for Indonesian citizens

Law Number 5 of 1960 on Basic Agrarian Principles, the Basic Agrarian Law (UUPA), provides that only Indonesian citizens may hold freehold title (hak milik) to land (Article 21(1)). A similar restriction applies to the right to build (hak guna bangunan), which in principle may only be held by Indonesian citizens (WNI) and Indonesian legal entities.

The UUPA also covers cases where a foreigner acquires freehold title not by purchase but through a legal event. Article 21(3) states that a foreigner who acquires freehold title through inheritance without a will or through the mixing of property by marriage, as well as an Indonesian citizen who loses their citizenship, must give up that right within one year of acquiring it or of losing citizenship.

If the right is not given up within one year, the freehold title is extinguished by operation of law and the land passes to the state, while the rights of other parties that encumber it continue.

In addition, for as long as a person holds both Indonesian citizenship and a foreign citizenship, they also cannot hold land under freehold title (Article 21(4)). The UUPA also states that a transfer of freehold title to a foreigner through a legal act such as sale, gift or testamentary gift is void by operation of law, and the land passes to the state (Article 26(2)).

What this means for a foreign national heir

In Ibu Ratih's situation, when the estate eventually opens, her younger child remains an heir and is entitled to their share. However, they can hold freehold land only temporarily and must give it up within one year. Giving it up can mean selling to an eligible party, transferring it to another heir who is an Indonesian citizen, or taking another step permitted by law.

A one-year limit sounds long, but in practice it is often not enough. Obtaining a certificate of inheritance (surat keterangan waris), transferring title, meeting tax obligations, reaching agreement among the heirs and completing a sale can take months, especially when an heir lives abroad.

What foreigners may own

Government Regulation Number 18 of 2021 (PP 18/2021) gives foreigners clearer room:

  • Foreigners may be granted a right of use (hak pakai) for a fixed term (Article 49(2)).
  • Foreigners with valid immigration documents may own a residential house or dwelling, namely a landed house on land under a right of use, including a right of use over freehold land under an agreement made by deed before a land deed official (PPAT), or certain apartment units (Articles 69 and 71), subject to limits such as a minimum price and permitted use (Article 72).
  • If the foreign owner of such a house dies, the house can be inherited. If the heir is also a foreigner, they must hold valid immigration documents (Article 69(2) and (3)).
  • A holder of a right of use who no longer meets the requirements must give up or transfer that right within one year. Otherwise, the right is extinguished by operation of law (Article 50).

In other words, the routes open to a foreign national heir differ from those open to an Indonesian heir. An inheritance plan needs to take this into account from the start.

Mixed marriages: two things that are often missed

Joint property with a foreign spouse. An Indonesian citizen who marries a foreign national without an agreement on separation of property faces a problem from the start of the marriage. Land bought during the marriage becomes joint property, so the foreign spouse also acquires a share through the mixing of property. Article 70 of PP 18/2021 confirms that an Indonesian citizen in a mixed marriage may hold the same land rights as other Indonesian citizens, provided the land is not joint property, as shown by an agreement on separation of property made by notarial deed. Since Constitutional Court Decision 69/PUU-XIII/2015, such an agreement may also be made during the marriage.

Children with limited dual citizenship. A child of a mixed marriage may hold limited dual citizenship until the age of 18 or until marriage. After that, they must choose one citizenship, with a declaration submitted no later than three years after turning 18 (Article 6 of Law Number 12 of 2006). While holding dual citizenship, the child cannot hold freehold title to land. If the child does not choose in time, their Indonesian citizenship may be lost. The special registration facility once offered through Government Regulation Number 21 of 2022 was temporary and has expired.

How to plan for it

Some approaches commonly considered with a legal adviser:

  1. Map the citizenship of every prospective heir and how it might change, including children and grandchildren living abroad.
  2. Arrange the division by will or by lifetime gift, so that freehold land goes to Indonesian heirs, while foreign national heirs receive other assets of equal value, such as funds, securities or assets abroad. This arrangement must still respect the shares of heirs protected by law.
  3. Prepare a division agreement among the heirs, including a compensation mechanism, so that the process within the one year runs smoothly.
  4. Consider changing the form of the right, for example granting a right of use over freehold land to a foreign family member who wishes to keep living in the family home.
  5. Make or review a prenuptial agreement (perjanjian perkawinan) for an Indonesian citizen in a mixed marriage.
  6. Avoid nominee arrangements (pinjam nama). Holding land in an Indonesian citizen's name for the benefit of a foreigner is high risk. The UUPA declares void any act that directly or indirectly transfers freehold title to a foreigner, and disputes of this kind often end badly for everyone involved.

Key points

  • Foreign citizenship does not remove the right to inherit, but it limits the type of land right that can be held.
  • A foreigner who acquires freehold title through inheritance without a will or through the mixing of property must give it up within one year; otherwise, the land passes to the state.
  • Foreigners may hold a right of use and own certain residential homes under PP 18/2021, with valid immigration documents.
  • In a mixed marriage, an agreement on separation of property made by notarial deed protects the Indonesian spouse's rights to land.
  • A child with limited dual citizenship cannot hold freehold title and must choose a citizenship within the set deadline.

If your family has members who hold foreign citizenship or live abroad, Parampara's consultation team can help you prepare a division plan that works within these limits.

This article is general information and not legal advice. How land and citizenship rules apply depends on the facts of each case; consult a licensed notary/PPAT or advocate about your situation.

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