KH friends must have seen advertisements for houses for sale with SHM or HGB information, right? Did you know that SHM and HGB are levels of land ownership status? In Indonesia, land does have different levels of ownership status and legality in the form of certificates ranging from Certificates of Ownership Rights, Business Use Rights, Building Use Rights, to Use Rights. Because there are several levels and types of certificates that apply, it is important for prospective buyers to know in advance the legality of the building/property to be purchased. To find out more about the differences in these certificates, Kontrak Hukum will discuss the differences between SHM and HGB. Let’s immediately see the explanation below.
Difference between SHM and HGB
In terms of position, SHM has a higher and stronger position than HGB. This is because the certificate of ownership (SHM) is a certificate issued by the National Land Agency (BPN) for the ownership right to the land owned. According to the Basic Agrarian Law, property rights are hereditary, strongest and fullest rights that people can have over land. Property rights can occur in several ways, including:
- It happens because of customary law.
- Occurs by government stipulation, according to the manner and conditions stipulated by government regulation.
- Occurs because of statutory provisions.
Meanwhile, building use rights are certificates granted for the use and utilization of all or part of the land for their own use or in cooperation with other parties so that in terms of control, HGB is more limited than SHM. According to Article 38 of Government Regulation No. 18 of 2021, the right to use a building occurs in several ways, namely:
- Building rights on state land are granted by a decree granting rights by the minister.
- Building rights on management right land are granted by a decree granting rights by the minister based on the approval of the management right holder.
- A right to use a building on freehold land is created through the granting of rights by the freehold holder in a deed made by a Land Deed Official.
Both hak milik and hak guna bangunan certificates can actually be granted to Indonesian citizens or legal entities. However, the difference is that not all legal entities can receive property rights. According to Government Regulation No. 38/1963, legal entities that can have ownership rights to land include banks established by the state (Bank Negara), agricultural cooperative associations, religious bodies, and social bodies. Whereas in HGB, as long as the legal entity is established according to Indonesian law and domiciled in Indonesia, the legal entity in question can obtain HGB. If in SHM there are no obligations and restrictions because the land owned is fully controlled, then in HGB there are provisions regarding obligations for HGB holders and restrictions that must not be violated. Holders of building use rights, for example, are obliged to carry out development and/or cultivate their land in accordance with the objectives within 2 years of the right being granted, maintain the land, maintain the conservation function of water body boundaries or other conservation functions and are prohibited from erecting permanent buildings that reduce the conservation function of embankments, boundary conservation functions, or other conservation functions. The next difference between SHM and HGB is the period of ownership. In SHM there is no ownership period or it is valid for life. Even after the owner dies, the title can be inherited. Although it does not have a time period, the right of ownership can also end/be abolished for certain reasons, such as revocation of rights (used for the public interest), voluntary surrender by the owner, due to abandonment, sale, purchase, donation, or the land owned is destroyed. In HGB, the period of use is granted for a maximum period of 30 years, extended for a maximum period of 20 years, and renewed for a maximum period of 30 years. After the period of granting, extending, and renewing the HGB expires, the land reverts to land directly controlled by the state, land under management rights, or the holder of a hak milik. HGB can also only be abolished if the period as stipulated in the decision to grant, extend, and renew the right has expired or the right is canceled by the minister before the end of the period. Read also: KH Services – Running a Business
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Well KH Friend, that’s the explanation of the difference between SHM and HGB. For KH friends who are currently planning to invest by buying property, don’t forget to check the legality of the building/property to be purchased. This is because there are various levels of land rights in Indonesia so don’t get it wrong. If you need help, have questions, or want to consult regarding property rights, building use rights, or other legal issues, do not hesitate to contact Kontrak Hukum at the following link Ask KH.
