Bali land certificates: SHM, HGB and hak pakai, and what each one is worth

Every villa sale in Bali starts with a certificate — or with a document that looks like one. What kind it is decides who may hold it, for how long, and what the buyer is really getting. Indonesian land law has a short list of rights and a clear rule on how strong a certificate is.

Seven words on a land file

The terms a notary's checklist will use.

The rights, side by side

Hak milik

The hereditary, strongest and fullest right a person can have over land (UUPA Pasal 20). Only Indonesian citizens may hold it (Pasal 21(1)). A foreigner who acquires it by inheritance without a will or through marital property, or a citizen who loses citizenship, must release it within a year, or the right lapses and the land falls to the State (Pasal 21(3)); a dual citizen is treated the same way (Pasal 21(4)). Any arrangement meant to pass it to a foreigner indirectly is void (Pasal 26(2)).

Hak guna bangunan

The right to build and own buildings on land that is not one's own, for citizens and companies established and based in Indonesia (PP 18/2021, Pasal 34). On state land it runs 30 years, extendable by 20 and renewable by 30; over freehold, 30 years renewable by a new deed (Pasal 37). A holder that stops qualifying must transfer within a year, or the right lapses (Pasal 35).

Hak pakai

A right of use that foreigners may hold, with a term (Pasal 49). Over freehold it runs at most 30 years, renewable by deed (Pasal 52). It is the right under a foreigner's house. Hak pakai and the limits on foreign-owned houses.

Two moments test a title more than any other: the end of an HGB term — extending a PT PMA's HGB — and the death of a foreign owner — what a foreign heir receives.

Hak sewa

A lease of land for a building is a right in the Agrarian Law (Pasal 44-45), but it is created by the contract and its term is the contract's. It is not on the list of rights BPHTB taxes.

How strong a certificate is

Strong evidence, if it matches

A certificate is strong evidence of the physical and legal data in it, as long as that data matches the survey plan and the land register (PP 24/1997, Pasal 32(1)). A PPAT must refuse to make a deed if the original certificate does not match the land office's registers (Pasal 39).

The five-year rule

Once a certificate has been issued lawfully to a person or company that acquired the land in good faith and actually controls it, anyone else who claims the land can no longer enforce the claim unless they objected in writing to the holder and the land office, or sued, within five years of issue (Pasal 32(2)). For a buyer, a certificate issued years ago to a seller in possession is harder to attack than a new one.

Land without a certificate

Old rights are registered by proving them with written evidence; where that is incomplete, by physical possession for 20 years or more, in good faith and openly, backed by witnesses and unchallenged during the announcement period (Pasal 24). Until then, there is no certificate to match, and the PPAT needs the proof of the right and a land office statement that the plot is not yet certified (Pasal 39(1)(b)).

What this page does not cover

• Hak pengelolaan (HPL) and desa adat land. Building on land you do not own.
• Electronic certificates. The Sertipikat-el.
• Changing or splitting a certificate. Hak milik to HGB and splitting a plot.
• Local names for old documents. Girik, petok and similar terms are not defined in the texts read.
• Electronic certificates. Not read.

Common questions