3 Steps for Obtaining Hak Guna Bangunan in Indonesia
Understanding the definition of the HGB title and how to obtain it is essential for everyone who wants to invest property in Bali, including foreigners. The reason is because, Hak Guna Bangunan (HGB) is one of the most popular property titles in Indonesia. If you’re seeking information about generating income through property in Bali, this article is right for you.
This article will explain what is Hak Guna Bangunan in Indonesia and how to obtain it. So, let’s have a look!
What is Hak Guna Bangunan?
Hak Guna Bangunan, or Right to Build Title in English, is a title that allows you to take control of a building on land that is owned by another individual (the landlord). Usually, the building is a villa.
According to UU No.5 Tahun 1960 tentang Peraturan Dasar Pokok-Pokok Agraria Pasal 35 ayat 1, besides taking control of a building on the land, you also can construct and have buildings on the landlord’s land.
People who are eligible to have the property through HGB are Indonesian citizens and all types of legal entity that is located in Indonesia, including Foreign-Owned Limited Liability Companies (PT PMA).
It means, that if you’re a foreigner, you must have PT PMA first before having an HGB title. Establishing PT PMA is the most secure way for foreigners to initiate business activities in Indonesia, including those related to the property sector.
According to PP No. 18 Tahun 2021 Pasal 37 ayat 1, the maximum duration of Hak Guna Bangunan ownership is 80 years – 30 years for the initial contract and can be extended to 20 years for the first extension and to 30 years for the next extension.
HGB title duration can be extended at Badan Pertahanan Nasional (BPN) office, according to the area where the certificate is registered.
The owner of the HGB title can use the villa for commercial or residential use. Also, the HGB title owner can sell and inherit the title.
3 Simple Steps to Apply Hak Guna Bangunan
PT PMA can acquire Hak Guna Bangunan in Indonesia by following these three steps:
1. Perform Land Survey
Performing a land survey is a vital step you must do before you sign the land lease agreement. This step aims to ensure the land has no zoning or legal issues.
Conduct due diligence and check the land certificate.
2. Obtain Required Permits
There are several permits you must have to apply for Hak Guna Bangunan in Indonesia. You can obtain permits from the local government, including environmental permits and Building Approval (Persetujuan Bangunan Gedung).
To acquire those permits, you must have a blueprint of the property you want to build. So, you need to work with an architect.
3. Apply for Hak Guna Bangunan
After you perform a land survey and obtain the required documents, now you can apply for HGB title at Badan Pertahanan Nasional (BPN).
Submit your application along with the required documents and make the relevant payments.
Start Your Investment Journey in Indonesia!
Hak Guna Bangunan is a powerful title in Indonesia that allows you to construct a building and have control of a building on land that is owned by another individual (landlord). However, foreigners who want to have this title must establish PT PMA first.
In Indonesia, three steps explain the process of obtaining Hak Guna Bangunan – perform the land survey, obtain required permits, and apply for the title at the BPN office. If you're done all the processes, the HGB will be yours and you can start your investment journey in Indonesia.
