Lifetime Gifts (Hibah) in Indonesia: What to Know

Giving gifts is a common way to show love and care, you and I both know that.. But in Indonesia, when it comes to giving significant gifts, especially property or money, things can get a bit more complicated. That’s because these gifts, known as hibah (lifetime gifts), are regulated by laws to ensure fairness and clarity. 

If you’re thinking about giving or receiving a hibah, it’s important to understand the legal framework behind it. 

Let’s break it down together.

What is Hibah?

In simple terms, hibah refers to a gift given by someone during their lifetime. Unlike inheritance, which is distributed after someone passes away, hibah happens while the giver is still alive. It’s a voluntary transfer of ownership, whether it’s land, money, or other valuable assets.

The key difference between hibah and inheritance lies in timing. Inheritance is governed by a person’s will or by default legal rules after their death. Meanwhile, hibah is immediate and doesn’t require the giver to pass away for the recipient to own the gift.

Legal Grounds for Hibah in Indonesia

In Indonesia, hibah is regulated by several legal frameworks, including the Civil Code, the 1974 Marriage Law, and the Islamic Compilation Law (Kompilasi Hukum Islam or KHI). Let’s dive into these laws to understand how they apply to hibah.

1. Civil Code: Legal Grounds for Gifts and Inheritance

The Indonesian Civil Code (Kitab Undang-Undang Hukum Perdata) provides the foundation for many aspects of property transfer, including hibah. Articles 1666 to 1693 of the Civil Code specifically address hibah. 

Here are some key points:

1. Definition of Hibah. Article 1666 defines hibah as a gift given voluntarily and without expecting anything in return.
2. Formal Requirements. According to Article 1682, a hibah involving immovable property (like land or a house) must be made in writing through a legal deed. This ensures legal certainty and prevents disputes. You can consult a legal expert like Wijaya & Co for further details.
3. Revocation of Hibah. Under certain conditions, a hibah can be revoked. For example, if the recipient commits a serious offense against the giver, the giver may have the right to cancel the gift.

The Civil Code also emphasizes that hibah must not harm the rights of legitimate heirs. This means that even if you give away property as a gift, you can’t completely disregard the inheritance rights of your children or spouse.

2. The 1974 Marriage Law: Protecting Marital Assets

The 1974 Marriage Law (Undang-Undang No. 1 Tahun 1974) plays a significant role in regulating hibah within the context of marriage. If you’re married, any gift you give or receive could be considered part of the marital assets. Here’s how it works:

1. Joint Property. Article 35 of the Marriage Law states that property acquired during marriage is considered joint property unless otherwise specified. If you want to give a hibah from joint property, both spouses must agree.
2. Personal Property. Property owned before marriage or acquired as a gift or inheritance is considered personal property (Article 36). You can freely give hibah from your personal property without needing your spouse’s consent.

This law ensures that hibah doesn’t unfairly impact the financial stability of the marriage or the rights of the other spouse.

3. Islamic Compilation Law: Hibah in Islamic Perspective

For Muslims in Indonesia, the Islamic Compilation Law (Kompilasi Hukum Islam) provides additional guidelines for hibah. These rules are based on Islamic principles and are particularly relevant for those who want their hibah to align with religious teachings.

1. Voluntary and Immediate.  Like the Civil Code, the KHI emphasizes that hibah must be given voluntarily and immediately. The giver must transfer ownership to the recipient without delay.
2. Limitations on Hibah. The KHI sets limits to ensure fairness among heirs. For example, a parent cannot give all their property as hibah to one child while excluding others. This is to prevent disputes and maintain harmony in the family.
3. Witnesses and Documentation. To avoid future conflicts, the KHI encourages documenting hibah and involving witnesses.

The KHI also highlights the importance of balancing hibah with inheritance rights. While you’re free to give gifts during your lifetime, you must ensure that your legitimate heirs still receive their rightful share after your passing.

Why Legal Clarity Matters

You might wonder, why is there so much legal regulation around Hibah? The answer lies in preventing disputes. Property and money can be sensitive topics, especially within families. Without clear rules, hibah could lead to misunderstandings, conflicts, or even lawsuits.

For example, imagine a parent gives a house as Hibah to one child but doesn’t document it properly. After the parent’s death, other heirs might contest the gift, claiming it should be part of the inheritance. By following the legal requirements, such as creating a legal deed, you can avoid these issues and ensure everyone’s rights are respected.

Steps to Make a Hibah in Indonesia

If you’re planning to give a hibah, here’s a simple step-by-step guide to help you navigate the process:

1. Identify the Property. Decide what you want to give as hibah. It could be land, a house, money, or other valuable assets.
2. Check Ownership. Ensure that you legally own the property and have the right to transfer it. If it’s joint property, get your spouse’s consent.
3. Consult a Legal Expert. For immovable property, you need to consult a legal expert like Wijaya & Co. They will advise you how to create a hibah deed. They  will ensure that the document complies with legal requirements.
4. Involve Witnesses. If required, involve witnesses to validate the hibah. This is especially important for Muslims following the KHI.
5. Transfer Ownership:. Complete the necessary administrative steps to transfer ownership to the recipient. For land or property, this may involve updating the land certificate.

By following these steps, you can ensure that your hibah is legally valid and protected from future disputes.

Balancing Hibah and Inheritance

One of the most important things to remember about hibah is that it shouldn’t harm the rights of your heirs. Under Indonesian law, legitimate heirs (such as children and spouses) are entitled to a portion of your estate. If you give away too much as hibah, you might unintentionally reduce their inheritance.

To avoid this, it’s a good idea to consult a legal expert like Wijaya & Co before making a hibah. They can help you balance your gifts with your inheritance plan, ensuring that everyone’s rights are respected.

Final Thoughts

Giving a hibah is a beautiful way to share your blessings with loved ones. But as you and I have seen, it’s not just about generosity. It’s also about responsibility. By understanding the legal framework, you can give gifts in a way that’s fair, transparent, and free from future disputes.

Whether you’re the giver or the recipient, take the time to learn about the rules and follow the proper procedures. After all, the goal of hibah is to bring happiness, not headaches. So, let’s make sure you do it right!

My name is Asep Wijaya, writing for Wijaya & Co. We orchestrate to assist you navigate. Thank you for reading my posts.