balivillacareHak milik to HGB: how a PT PMA gets freehold land in Bali since 2025
Key takeaways
- A company cannot hold hak milik: a transfer to one is void, and the land falls to the state (UUPA Pasal 21, 26).
- Since 2025 a change of freehold into HGB is done by auction, or by releasing the land to the state and a new grant (Permen ATR/BPN 5/2025 Pasal 20).
- The one-step change on the holder's application in the 2021 rules was revoked in 2025, except in an auction.
- The alternative leaves the freehold with the owner: HGB over hak milik, up to 30 years, by PPAT deed, renewable by a new deed.
- BPHTB is charged on a new right granted after a release, on market value; release of right is listed for the seller's 2.5%.
When a PT PMA buys a villa on freehold land, guides describe the step in between as “converting” the certificate from hak milik to HGB. Until 2025 the land ministry's rules did provide a change of right on the holder's application. In 2025 the ministry removed that route outside auctions: a change now runs through a release of the land to the state and a new grant. This page reads the Agrarian Law, the 2021 land regulation, the 2025 ministerial regulations and the tax rules.
Seven words in a freehold-to-HGB deal
The terms in the regulations and on the certificate.
| Term | What it is | Why a buyer meets it |
|---|---|---|
| Hak milik (SHM) | Freehold. | Citizens only; a company cannot hold it. |
| HGB | Hak guna bangunan, the right to build. | What a PT PMA can hold. |
| Pelepasan hak | Release of a right. | Turns the land into state land. |
| Pemberian hak | Grant of a right. | How the new HGB is created. |
| Perubahan hak | Change of right. | The old one-step route, revoked in 2025 except at auction. |
| HGB di atas HM | HGB over freehold. | Granted by the owner by PPAT deed; the freehold stays. |
| Tanah negara | State land. | What released land becomes. |
Why the company cannot take the freehold
Only Indonesian citizens may hold hak milik; the government designates any legal entities that may (UUPA Pasal 21). A sale, gift or other act meant to pass hak milik, directly or indirectly, to a foreigner or a non-designated legal entity is void by law, the land falls to the state, and payments already made cannot be reclaimed (Pasal 26(2)). HGB may be held by citizens and Indonesian legal entities (Pasal 36; PP 18/2021 Pasal 34) — which includes a PT PMA. Hence the step between: the freehold has to become, or carry, an HGB.
Three routes since 2025
| How it works | Term | Rule | |
|---|---|---|---|
| Release, then a new HGB grant | Freehold released to the state; HGB granted to the company | 30 years, extended 20, renewed 30 | Permen ATR/BPN 5/2025 Pasal 20(1)(b); PP 18/2021 Pasal 37(1) |
| HGB over freehold | Owner keeps the freehold, grants HGB by PPAT deed | Up to 30 years, renewed by a new deed | PP 18/2021 Pasal 37(2), 38(3), 40(3) |
| Auction | Change of right within an auction | As granted | Permen ATR/BPN 5/2025 Pasal 20(1)(a) |
Release and new grant
Permen ATR/BPN 5/2025 Pasal 20(1): a change of hak milik into HGB is done (a) in an auction, or (b) by releasing the right so that it becomes state land, processed through a grant of right. PP 18/2021 counts land from a release as state land (Pasal 2(3)(d)) and allows HGB on state land (Pasal 36), for 30 years, extended 20, renewed 30 (Pasal 37(1)). Earlier in 2025, Permen 2/2025 had revoked the 2021 provisions on changing hak milik into HGB or hak pakai, except in an auction. Those 2021 provisions (Permen ATR/BPN 18/2021 Pasal 158-161) defined the change as a government decision, on the holder's application, making the land state land and granting it back as another right; they are the basis of most guides still in circulation. We found no provision saying whether the company applies for the grant itself after the release, or the owner applies and transfers; that sequence is for the notary-PPAT and the land office.
HGB over hak milik
The second route never touches the freehold. The owner grants HGB to the company by PPAT deed (PP 18/2021 Pasal 38(3)), for up to 30 years, renewable by agreement with a new registered deed (Pasal 37(2), 40(3)); the HGB exists and binds third parties from registration (Pasal 39). The company depends on the freehold owner for every renewal — a lease-like dependence, with a registered right.
Buying freehold land through a PT PMA?
Tell us where the land is and how the deal is set up. Five questions, and your details are the last step.
Taxes and fees
A new right granted after a release is a BPHTB object (UU 1/2022 Pasal 44(2)(b)), taxed on market value (Pasal 46(2)(b)) and due on the date the grant decision is issued (Pasal 49(e)). On the seller's side, PP 34/2016 lists release of right among the ways land is transferred for the 2.5% final tax, valued at market value for a release (Pasal 1(2), 2(2)). Whether an owner releasing land to have it re-granted to someone else is taxed exactly like a sale, the texts do not spell out.
| Amount | Rule | |
|---|---|---|
| Agreed price | IDR 5,000,000,000 | — |
| Seller's 2.5% on the release | IDR 125,000,000 | PP 34/2016 Pasal 1(2), 2 |
| Company's BPHTB, 5% before the regency's allowance | IDR 250,000,000 | UU 1/2022 Pasal 44, 46; Perda |
| Land office: register the release | IDR 50,000 | PP 128/2015 |
| Land office: register the grant to a company | IDR 100,000 | PP 128/2015 |
Land-examination fees are set by formula and are not shown. BPHTB and the 2.5% on a sale.
What changes for a buyer
- Sequence risk. In the release route the seller gives up the freehold before the company holds a granted HGB. Payment and the release need to be tied together in the deal, not left to trust.
- Term. A granted HGB on state land runs 30 + 20 + 30 years; HGB over freehold runs 30 and depends on the owner. Extending HGB.
- Older advice. A guide describing a one-step “conversion” on application is describing the 2021 rules as they stood before 2025.
What this page does not cover
- Hak pakai for a foreigner's house on former freehold — compared here.
- Land-office processing times. Not in the texts read.
- The 1997 decree on changing rights, which we could not obtain in an official copy.
Common questions
Can a PT PMA own hak milik land in Bali?
No. Only citizens may hold hak milik, and a transfer to a non-designated legal entity is void, the land falling to the state (UUPA Pasal 21, 26(2)). A company can hold HGB (Pasal 36).
How is hak milik changed to HGB now?
Since 2025, a change of hak milik into HGB is done in an auction, or by releasing the right so the land becomes state land and processing a grant of right (Permen ATR/BPN 5/2025 Pasal 20). The 2021 one-step change on the holder's application was revoked except in auctions.
What is HGB over hak milik?
The freehold owner grants HGB to the company by PPAT deed for up to 30 years, renewable by a new deed; the freehold stays with the owner (PP 18/2021 Pasal 37(2), 38(3), 40(3)).
What taxes apply?
A new right granted after a release is a BPHTB object on market value, due when the grant decision is issued (UU 1/2022 Pasal 44, 46, 49). Release of right is listed among transfers for the seller's 2.5% (PP 34/2016 Pasal 1(2)).
What does the land office charge?
The fee schedule lists IDR 50,000 per plot for registering a release, an HGB over freehold, or a change of right, and IDR 100,000 for registering a grant to a legal entity (PP 128/2015).
Sources cited on this page
- UU No. 5 Tahun 1960 (UUPA) — Pasal 21, 26, 35-36
- Permen ATR/BPN No. 5 Tahun 2025 — Pasal 20
- Permen ATR/BPN No. 2 Tahun 2025 — Pasal II
- Permen ATR/BPN No. 18 Tahun 2021 — Pasal 158-161, for reference
- PP No. 18 Tahun 2021 — Pasal 34-40
- UU No. 1 Tahun 2022 — Pasal 44, 46, 49
- PP No. 34 Tahun 2016 — Pasal 1-2
- PP No. 128 Tahun 2015 — land office fees
Every figure above links to the source it was read from. This page was last changed on 11 October 2026. How we check this.