Extending a PT PMA's HGB: the timing, the conditions, and the freehold trap

A PT PMA's villa sits on an HGB, and an HGB ends. Whether it ends in an extension, a renewal, or a return of the land depends on what the land is — state land or someone's freehold — and on what the company does in the years before.

Seven words on an HGB file

The terms of PP 18/2021 and the ministry's implementing rule.

Two kinds of HGB, two different futures

On state land

The government extends an HGB on the same plot to the same holder (Permen ATR/BPN 18/2021, Pasal 94(1)). The application can be made once the building and its facilities are built and effectively used — judged by whether development matches the land-use planning document — and at the latest before the HGB ends (Pasal 94(2)-(3)). After the term and any extension end, a renewal can be applied for within two years (Pasal 95).

Over someone's freehold

An HGB granted over hak milik runs at most 30 years and is renewed only by agreement between the HGB holder and the freehold owner, through a new PPAT deed registered at the land office (PP 18/2021, Pasal 37(2), 40(3); Permen Pasal 97). There is no extension to apply for. A PT PMA on a local owner's land is, in year 30, negotiating rather than applying.

The conditions and the paperwork

Five conditions

An HGB on state land can be extended or renewed if the land is still used well for the purpose of the grant; the grant's conditions were met; the holder still qualifies; the land still conforms to the spatial plan; and it is not used or planned for public purposes (PP 18/2021, Pasal 40(1)). The spatial-plan condition is the one a villa built against its zoning will fail. Zoning and the KKPR.

What a company files

For HGB on state land: the company's deed and NIB, the HGB certificate, a land registration statement, tax evidence for the land, and a statement of physical control — for a company, a notarial deed — that the land is held openly and in good faith, undisputed, will not block public access or waterways, will be released for public purposes if needed, and that the buildings are effectively used (Permen ATR/BPN 18/2021, Pasal 98(1)).

Registration

An extension or renewal must be registered at the land office (PP 18/2021, Pasal 41(5)).

When the company itself changes

An HGB holder that no longer qualifies — for HGB, a citizen or a company established and based in Indonesia (Pasal 34) — must release or transfer the right within one year, or it lapses by law (Pasal 35). A PT PMA that is being wound up must deal with its HGB in the liquidation, and a company whose license is revoked for unfiled LKPM is on the path to that. Closing a PT PMA and LKPM.

A timeline to plan against

For a PT PMA whose HGB on state land was granted in 2010 for 30 years: the extension window is open from the moment the villa is built and in use until the HGB ends in 2040; if it is missed, a renewal application can still be made within two years after, to 2042. Over freehold, the same company has until 2040 to agree a new deed with the owner, and nothing in the regulations obliges the owner to agree. The diligence a buyer of such a company does is mostly this arithmetic. Due diligence.

At the very end

When the term, extension and renewal have all run, state land returns to the State; the minister may give priority to the former holder if the land is still used well, the holder still qualifies and the land still fits the plan (Pasal 37(3)-(4)).

What this page does not cover

• Fees for extension and renewal. Not in the articles read.
• HGB on hak pengelolaan land. Needs the management-right holder's recommendation; not covered.
• Converting HGB to freehold. Not available to a PT PMA.

Common questions