There are three types of land that can be granted a hak guna bangunan (HGB) – state land, management rights and property rights. The HGB, or right to build, is a certificate that states the holder can build and own a building on land that is not their own.
There are two types of entities that can hold HGB certificates; Indonesian citizens and legal entities established by law and domiciled in the country.
Government Regulation number 18 of 2021 concerning management rights, land rights, flat units, and land registration, explains that HGB is granted for a maximum period of 30 years, then can be extended for a period of 20 years and renewed for a further maximum period of 30 years.
“The right to use the building on the land with the right of ownership is granted for a maximum period of 30 years and can be renewed with a deed of granting the right to the building on the right of ownership,” reads Article 37 of the regulation as quoted by regulation.bpk.go.id on Tuesday 8th March 2022.
In article 41, it states that an application for an extension of the term of the right to use the building can be submitted after the land has been used and utilized in accordance with the purpose of granting the right or no later than the expiration of the period of the right to use the building.
An application for renewal of HGB must be submitted no later than two years after the expiry of the term of the right to use the building.
“The latest regulation is PP number 18 of 2021, it states that the HGB can be extended before it expires,” explained Special Staff and Spokesperson for the Agrarian Affairs and Spatial Planning or National Land Agency Minister Teuku Taufiqulhadi when contacted.
Government Regulation number 18 of 2021 is a derivative rule of Law No. 11 of 2020 concerning The Job Creation Act, also known as the Omnibus Law.
The new rule automatically cancels the previous rules contained in Government Regulation number 40 of 1996 concerning cultivation rights, building use rights, and land rights.
Previously, in article 27 of Government Regulation number 40 of 1996, it stated that an application for an extension of the term of the HGB or its renewal must be submitted no later than two years before the expiration of the term of the HGB.
The latest rules provide leeway for the extension of the HGB by not giving a specific time limit, but it can still be extended with a note before the HGB expires.
The following is the text from article 27 of Government Regulation number 40 of 1996:
- Application for an extension of the term of the building use rights or its renewal shall be submitted no later than two years prior to the expiration of the said building use rights or its extension.
- Extension or renewal of building use rights is recorded in the land book at the Land Office.
- Provisions regarding the procedure for applying for an extension or renewal of a building utilisation right and its requirements shall be further regulated by a Presidential Decree.