Hak Guna Bangunan (HGB) is one of the most popular land titles in Bali for foreigners and is used to own and construct a building in Bali. It’s essential to understand the Indonesian real estate laws when buying property in Bali, especially as a foreigner. This article explains Hak Guna Bangunan and tells how to apply for this land certificate.
What is Hak Guna Bangunan in Bali?
Sertifikat Hak Guna Bangunan, which means Right to Build in English, is a land title in Bali that grants holders the right to build and own structures on leased land. The title is used mainly by foreigners who construct a villa in Bali on land they lease from a local, who holds the land under the Hak Milik (HM) title. The HM title is the highest form of real estate ownership and is only available to Indonesian nationals, who can transfer Hak Guna Bangunan to Hak Milik.
The validity of the Hak Guna Bangunan certificate can reach up to 30 years and is extendable for another 30-year and 20-year period, up to 80 years in total. You can apply for the Hak Guna Bangunan certificate at the National Land Agency in Bali.
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Who can get Hak Guna Bagnunan in Bali?
Only legal entities, such as foreign-owned companies (PT PMA), can acquire HGB. They can apply for Hak Guna Bangunan at the National Land Agency in Bali. Using a legal representative or real estate agent to obtain the HGB title in Bali is advisable.
How does Hak Guna Bangunan differ from other land titles in Bali?
Understanding Bali’s land titles, including Hak Guna Bangunan, Hak Milik, and Hak Pakai (HP), can be challenging. Hak Milik is the most vital land title as it grants the holder full ownership rights, including utilization and disposal. Hak Pakai gives the right to use a building for their residence. Those who want to use a facility for private purposes (and not for villa rentals) must legally obtain Hak Pakai to live in their home.
How to apply for Hak Guna Bangunan in Bali?
You can obtain Hak Guna Bangunan by following these three steps:
- Conduct a land survey: Before finalizing a lease agreement in Bali, conduct a land survey to ensure suitability for development, check the owner’s land certificates, and verify the absence of legal or zoning issues.
- Secure necessary permits: Obtain essential licenses from local authorities in Bali, including Building Approval (PBG), environmental permits, and other relevant licenses. Work with an architect in Bali for property blueprints needed for some permits.
- Apply for Hak Guna Bangunan: With permits and documents in hand, submit an application for HGB at the local land office in Bali. Provide necessary documentation and pay the fees.
The land office will issue the HGB certificate upon verifying compliance with laws and regulations.
If you’re considering acquiring Hak Guna Bangunan, you must work with a legal representative or real estate agent to ensure the process is legal and compliant with local regulations. For further information on how we can assist you, kindly drop your details below or email us at firstname.lastname@example.org.
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How much does Hak Guna Bangunan in Bali cost?
You can calculate the cost of Hak Guna Bangunan in Bali by dividing the period by 30 years and multiplying by 1%. The outcome is multiplied by the Land Processing Value (NPT) (which is deducted by the NPT ‘Not Charged with Income Tax’, or TPTTTKUP) and multiplied by 50%. The outcome is the price of Hak Guna Bangunan in Bali.
For example, we apply for Hak Guna Bangunan with a validity of 20 years. The NPT value of the land of 500m2 is IDR 800 million ($52,000).
- 20/30 x 1% = 0.0067
- 0.0067 x 800,000,000 x 50% = IDR 2.68 million ($174)
The cost of Hak Guna Bangunan is IDR 2.68 million ($174) for this example. The actual cost varies, depending on the size and certificate’s validity.
Hak Guna Bangunan in Bali is a widely used land title that grants holders the right to build and own structures. While it has some limitations compared to other land titles, Hak Guna Bangunan can be a flexible and cost-effective option for investors and developers who want to build properties in Bali. If you’re considering acquiring Hak Guna Bangunan, you must work with a reputable notary and lawyer to ensure the process is legal and compliant with local regulations.
Frequently Asked Questions (FAQs)
What is the HGB title in Indonesia?
HGB, or Hak Guna Bangunan, is a land title in Indonesia that means the Right to Build in English. Under the HGB title, the holder is granted the right to construct and own buildings on the land for up to 30 years and renewable. This is a common title used for business purposes and property development, and it’s essential for investors looking to construct on land, including Hak Guna Bangunan in Bali, to be aware of the terms and conditions associated with this title.
Can a foreigner own a villa in Bali?
A foreigner can own a villa in Bali through specific land titles. While foreigners cannot hold a Hak Milik (freehold) title, they can opt for a Hak Pakai (Right to Use) or Hak Sewa (leasehold) title. Another option is to set up a foreign-owned company (PMA) that can hold a Hak Guna Bangunan title in Bali, allowing the company to construct and own buildings, such as a villa, for a certain period.
What does leasehold in Bali mean?
Leasehold in Bali refers to the land title Hak Sewa, which grants the holder the right to use a piece of land for a fixed period, typically 30 years. Unlike Hak Milik or Hak Guna Bangunan in Bali, leasehold does not allow ownership but provides the tenant with the right to use and develop the property during the lease term. This is an often-used option for foreigners to buy a villa in Bali.