Hak Guna Bangunan (HGB) is one of Indonesia’s most important land titles. It is essential to understand what Hak Guna Bangunan is and how it differs from other land titles, such as Hak Pakai (HP) and Hak Milik (HM). This article explains what Hak Guna Bangunan is and how to apply for an HGB title.
What is Hak Guna Bangunan (HGB) in Indonesia?
Hak Guna Bangunan, which means Right to Build in English, is a land certificate in Indonesia that gives holders the right to own a building on land owned by someone else. The HGB certificate only concerns the structure, not the land, such as when somebody builds a villa on leased land. The HGB title can only be obtained by Indonesian nationals or legal entities, such as a PT PMA. Foreign nationals (WNA) can’t get the HGB title but can buy a property with the Hak Pakai title.
The Hak Guna Baguna certificate is valid for 30 years and can be extended to 20 or 30 years, totaling 80 years. Alternatively, you can apply for a new HGB certificate for the same property. Nevertheless, failure to renew or convert the HGB title to another land title after the specified period will result in the property being returned to the original landowner.
Get help with HGB and buying property in Indonesia
Apply for Hak Guna Bangunan in 3 steps
A PT PMA is a foreign-owned company that can obtain the HGB title in Indonesia by following three steps:
Step 1: Conduct a land survey
Before signing the land lease agreement, always conduct a land survey to ensure that the land is suitable for development and that there are no legal or zoning issues with the land. Make sure to conduct due diligence and check the land certificates of the owner.
Step 2: Obtain the necessary permits
You must obtain several permits from the local government authorities to develop the land, including Building Approval (PBG), environmental permits, and other relevant licenses. For some of these permits, you need a blueprint of the property you want to build, which might require working with an architect.
Step 3: Apply for Hak Guna Bangunan at the BPN
Once you have the necessary permits and documentation, you can apply for HGB at the local land office, known as Badan Pertanahan Nasional (BPN). You submit your application and the required documentation and pay all the relevant fees. The land office will check the submitted documentation and issue the HGB certificate once everything is right according to the laws and regulations.
How much does Hak Guna Bangunan cost?
You can calculate the cost of Hak Guna Bangunan by dividing the HGB period by 30 years and multiplying by 1%. The outcome is multiplied by the Land Processing Value (NPT), deducted by the NPT Not Charged with Income Tax (TPTTTKUP), and multiplied by 50%. The outcome is the price of HGB in Indonesian Rupiah.
We apply for Hak Guna Bangunan in Bali for this example, valid for 20 years. The HGB title is for land with a size of 500 m2. The NPT value of the land is IDR 800 million ($52,000). These are the calculations:
- 20/30 x 1% = 0.0067
- 0.0067 x 800,000,000 x 50% = IDR 2.68 million ($174)
Hak Guna Bangunan (HGB) vs. Hak Milik (HM)
HGB and Hak Milik (HM) are land certificates with differing rights and obligations. As mentioned, HGB gives the right to own the building on someone else’s land. On the other hand, Hak Milik is a freehold title, meaning that the holder has absolute rights over the property and land. Hak Milik has the most substantial land ownership rights; only Indonesian citizens can get this title. Indonesian nationals can also convert the property’s HGB title to an HM title.
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Get help with HGB and buying property in Indonesia
Buying property in Indonesia requires expertise with its laws and regulations. You need an HGB title to own the construction of somebody else’s land in Indonesia. Indonesian citizens or legal entities such as PT PMAs can acquire Hak Guna Bangunan by applying at the local land office. Engaging a legal or real estate agent can simplify the process.
Frequently Asked Questions (FAQs)
What is Hak Guna Bangunan (HGB)?
Hak Guna Bangunan is a land title in Indonesia that grants the holder the right to own a building on someone else’s land. The HGB title is valid for 30 years and extendable for another 20-year and 30-year period.
Do I need Hak Guna Bangunan in Indonesia?
You need Hak Guna Bangunan if you have a PT PMA and want to use the building or construction on somebody else’s land. For example, if you lease land in Indonesia and build your villa on the ground with a PT PMA, you need Hak Guna Bangunan to own and use the villa.
How to apply for Hak Guna Bangunan?
The first step is to obtain the necessary Building Approval (PBG) and other permits in Indonesia. Afterward, you can apply for Hak Guna Bangunan in your local land office. When using Hak Guna Bangunan, working with a legal or real estate agent experienced with HGB is recommended.
Do I need Hak Guna Bangunan in Bali?
You need Hak Guna Bangunan in Bali if you lease land with a PT PMA and want to own the building on this land. In that case, you are not the land owner and need the HGB title to own your building. You also need HGB in Bali if you build a villa for rental purposes.
Hak Guna Bangunan vs. Hak Pakai
Hak Guna Bangunan can be obtained by a PT PMA and is needed to own the structure on land owned by someone else. In contrast, Hak Pakai can only be obtained by an individual and gives the right to use a property for residential purposes.