What does a notary or land deed official (PPAT) do when land in Bali is sold, leased or used for a build, and what should a buyer check?

Notary and PPAT: two roles

A notary makes authentic deeds in general, including the deed that founds a company. A land deed official (PPAT) makes the deeds that change rights over land. Many people hold both appointments. Details of both roles: notaries and PPATs.

PP 37/1998 sets out the PPAT’s job. A PPAT carries out part of the land registration process by making deeds that prove a legal act over land took place, which then form the basis for registering the change (Article 2(1)). The acts covered are (Article 2(2)):

• sale and purchase;
• exchange;
• gift;
• contribution into a company;
• division of jointly held rights;
• grant of a Hak Guna Bangunan or Hak Pakai over freehold (Hak Milik) land;
• grant of a mortgage right (Hak Tanggungan), and a power of attorney to grant one.

A PPAT is appointed by the minister for a specific working area (Article 5(1) and (2)) and may only make deeds for land inside it (Article 3(1)). PP 37/1998 has been amended by PP 24/2016, so ask the PPAT which version of the rules they work under.

Why the deed matters

A transfer of land rights by sale, exchange, gift, contribution into a company or other transfer (other than by auction) can only be registered at the land office if it is evidenced by a deed made by an authorised PPAT (PP 24/1997 Article 37(1)). The deed is signed in front of the parties and at least two witnesses (Article 38(1)).

For a foreign buyer this is how a right of use is created on someone else’s freehold land: a Hak Pakai over Hak Milik land is granted by the owner through a PPAT deed (PP 18/2021 Article 53(3)), and it binds third parties from the time the land office registers it (Article 54(3)). See leasehold or Hak Pakai.

What the PPAT must check, and refuse

PP 24/1997 Article 39(1) says the PPAT must refuse to make the deed if, among other things:

• for registered land, the original certificate is not handed over, or it does not match the land office records;
• for unregistered land, the proof of rights or the village head’s statement, and the land office’s statement that the land is not yet certified, are not provided;
• a party or a witness is not entitled to act;
• a party acts under an absolute power of attorney that in substance transfers the right;
• a permit the act needs has not been obtained;
• the land is in dispute over its physical or legal data.

A refusal must be given in writing with the reasons (Article 39(2)).

After signing

• The PPAT must deliver the deed and supporting documents to the land office for registration within 7 working days of signing, and tell the parties in writing that it has done so (PP 24/1997 Article 40).
• A sale agreement (PPJB) or a lease over registered land can be recorded at the land office on application, on the register and the certificate (PP 18/2021 Article 90).

Taxes paid around the deed

• Buyer: the regional duty on acquiring land and buildings (BPHTB), at a rate of at most 5% set by the regency (UU 1/2022 Article 47(1) and (2)), calculated on the transaction price for a sale, or the tax value (NJOP) where that is higher (Article 46). For a sale it falls due on the date the PPJB is signed (Article 49).
• Seller: a final income tax, generally 2.5% of the gross transfer value (PP 34/2016 Article 2(1)).

What the PPAT does not do

The PPAT records the act the parties agree; it does not act for either side or tell you whether the deal is a good one. A deed cannot make a void act valid either: any act meant to pass Hak Milik to a foreigner, directly or indirectly, is void by law and the land falls to the State (UU 5/1960 Article 26(2)). For advice on title and structure, use your own property lawyer. For the taxes, see tax and accounting firms.