Buying a house or land in your child’s name sounds like a simple way to secure their future. Many parents do it with good intentions: to keep the asset separate, to avoid family disputes, or to give the child something to fall back on.

It’s legal. The trouble tends to surface years later, when the family needs to sell, pledge or swap the property before the child grows up. This guide explains how it works, when it makes sense, and the alternatives worth weighing.

A child can own property, but can’t act alone

Indonesian law doesn’t stop a minor from owning land or a house. The child’s name can go on the certificate like any other owner.

The difference is who acts on the child’s behalf. A minor isn’t legally able to carry out legal acts alone. Under the Marriage Law, a child under 18 who hasn’t married is under their parents’ authority, and the parents represent them in legal matters. If the parents are no longer around, a guardian takes that role.

So when buying, a parent signs the AJB (Akta Jual Beli, the deed of sale) before the PPAT (Pejabat Pembuat Akta Tanah, the official who draws up land deeds) on the child’s behalf. The PPAT will ask for the child’s birth certificate and the family card (Kartu Keluarga) to prove the relationship. Ask the PPAT what else they need, since practice can vary.

Selling it again is harder than buying

This is where most families get stuck. The Marriage Law bars parents from transferring or pledging immovable property belonging to a child under 18, unless the child’s interest requires it.

In practice that means:

  • You need a court decision. The parents apply to the court, usually the Religious Court (Pengadilan Agama) for Muslims or the District Court (Pengadilan Negeri) for others, for permission to sell on the child’s behalf.
  • There has to be a reason that serves the child. For example, the proceeds go to the child’s education or health care, or are swapped into another asset in the child’s name.
  • It takes time. Court proceedings add time and cost, and a buyer may not be willing to wait.

Buyers who know this usually won’t pay a deposit until the court decision is out. The same thing happens with inherited houses where some of the heirs are still minors. The order of steps is in our guide to selling inherited land.

Hard to use as bank collateral

Property in a minor’s name is generally hard to use as collateral, whether for a KPR (Kredit Pemilikan Rumah, a home loan) or a business loan for the parents. The reason is the same: pledging is one of the acts the law restricts.

If your family plans include a bank loan secured on that property, say for renovation or business capital, putting the child’s name on the certificate can close that door. Ask the bank before you buy.

Tax and fees still apply

Buying in a child’s name doesn’t remove any tax. BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan, the buyer’s acquisition duty) is still due, and the PPAT and title transfer fees are the same. The yearly PBB (Pajak Bumi dan Bangunan, the land and building tax) is also issued in the child’s name, and the parents pay it.

There’s also the question of where the money came from. It obviously came from the parents, so some notaries treat it as something close to a gift to the child. Ask a notary or tax adviser how it should be recorded in your family’s tax returns.

If the parents divorce or die

Property in a child’s name stays the child’s, whatever happens to the parents’ marriage. That’s often why parents choose this route.

Managing it can get complicated, though:

  • After a divorce, the parent with custody represents the child, and a sale still needs the court’s permission.
  • After a parent dies, a guardian has to be appointed. The guardian must look after the child’s property properly and can be held to account.

If the main goal is to protect the asset in case of divorce, a marriage agreement may fit better. We cover that in our guide to prenups, postnups and property.

More flexible alternatives

Before deciding, compare these options:

  • In the parents’ name, gifted later. The parents can still manage, sell or pledge the property until the child is an adult, then hand it over with a deed of gift (akta hibah). Work out the costs and taxes first. Our guide on gifting a house or land covers this.
  • A will. Parents can state that a particular property is meant for a particular child, within the limits of the inheritance law that applies to your family.
  • A dedicated fund. Savings or investments the child later uses to buy property in their own name as an adult.
  • Joint names. Some families list both parent and child, but the child’s share is still bound by the same rules. It doesn’t get rid of the court permission issue.

When the child’s name still makes sense

This route suits property meant to be held for a long time, such as land that won’t be sold before the child turns 18, where the family has no plan to borrow against it. It’s also common for assets from grandparents that are meant to go straight to a grandchild.

If you do go this way, keep every document in order: the certificate, the AJB, payment receipts and each year’s PBB receipt. When your child grows up, they’ll need all of it to manage the property themselves, and a complete file makes a future sale much easier.

If there’s a fair chance you’ll need to sell in the next ten years, because you might move city or need business funds, the other options are usually more practical.

Questions for the notary before the deed

  1. Which documents do we need to buy in our child’s name?
  2. How should the source of funds be recorded, and are there tax consequences?
  3. If we need to sell before our child turns 18, which court do we apply to, and what does it require?
  4. Would gifting it later, once our child is an adult, suit our family better?

In short, putting your child’s name on the certificate protects the asset, but it also locks the property until they come of age. Choose it if you’re ready to leave it untouched, and pick another route if the family needs room to move. If you’re looking for a house or land for your family’s future, the Vorneo Property team can help you find one with clear paperwork.