The Period of Validity of Building Rights (HGB) and the Procedures and Conditions for its Extension

When considering buying a property, it is important to understand the difference between the status of a Certificate of Ownership or SHM and a Certificate of Building Rights or HGB. Property ownership status with legality in the form of an HGB certificate is most commonly found in vertical housing, such as apartments or flats.

To understand the intricacies of Hak Guna Bangunan (HGB), the validity period of Hak Guna Bangunan (HGB), and how it differs from a Sertifikat Hak Milik (SHM), let's start by understanding what each means.

Understand the meaning of Certificate of Ownership (SHM)

Based on Law No.5 of 1960 concerning Basic Agrarian Regulations, a Certificate of Ownership is a certificate of full ownership of land and/or land rights owned by the certificate holder.

Certificate of Ownership (SHM) is permanent, valid for life, and can be owned for generations. Therefore, the ownership status obtained through this Certificate of Ownership is considered to have the highest legality power.

Then, what about the Building Rights Title Certificate (SHGB)?

Law No. 5/1960 on Basic Agrarian Principles Article 35 paragraph 1 explains that Hak Guna Bangunan (HGB) is the right to build and own buildings on land that is not one's own.

Therefore, the holder of a Building Rights Title (SHGB) certificate is not the owner of the land, but only has the right to construct and own buildings on the land.

How long is the validity period of the Hak Guna Bangunan (HGB) certificate?

The validity period of the HGB certificate reaches 30 years, and can be extended for a period of 20 years, and renewed for a maximum period of 30 years. Building Rights Title holders are required to apply for an extension at least 2 years before the HGB expires. In accordance with Government Regulation (PP) Number 18 of 2021 concerning Management Rights, Land Rights, Flat Housing Units and Land Registration.

What are the requirements for extending the validity period of the Hak Guna Bangunan (HGB) certificate?

Extension of the validity period of the HGB certificate can be applied for at the National Land Agency (BPN) office according to domicile. Some documents that need to be prepared to take care of the HGB extension include:

• ID CARD
• Family Card
• Copy of deed of establishment and legalization of legal entity (if a legal entity)
• Copy of HGB certificate to be extended
• Proof of payment of Land and Building Tax for the current year
• A statement letter that the land is still being utilized according to its original purpose
• HGB extension application form filled in completely

How do I extend the validity period of my Hak Guna Bangunan (HGB) certificate?

After submitting all documents and completed forms, the applicant must complete payment of the land inspection and HGB registration fees.

After the inspection of the land by the BPN, the next stage is the issuance of a decree to extend the time of the Kantah, the issuance of a decree to extend the time of the Regional Office (Kanwil), the issuance of a decree to extend the time of the BPN RI, and the registration of rights and the issuance of the HGB certificate. When the HGB certificate has been issued, you can collect it at the designated counter. You can authorize another party to apply for the HGB extension, if you are unable to attend.

How much does it cost to extend the validity period of a Hak Guna Bangunan (HGB) certificate?

The following formula is used to calculate the cost of extending the validity period of the HGB certificate:

The HGB extension periodgranted is divided by 30 (years) and multiplied by 1%. The result is then multiplied by the Land Acquisition Value (NPT) minus the NPTTKUP and multiplied by 50%.

The calculation of these costs is determined based on Government Regulation No. 46 of 2002.

How long does it take to extend the validity period of the Building Rights Title certificate?

The time required to extend the HGB certificate depends on the size of the land. For a land area of 2,000 m2 - 150,000 m2, it takes 49 days. And for land area > 150,000 m2, it takes 89 days.

Thus the explanation of SHM, HGB, and the validity period of the HGB certificate. Also read the article Urgency of HGB PeriodExtension to find out why the government needs to extend the validity period of HGB certificates in Indonesia.