Processing Land Certificates

Methods, Terms, and Costs for Processing Land Certificates

The legality of property ownership in the form of land or buildings must be legally proven. Therefore, after making a purchase, the most important thing to do is to make a land certificate. Clarifying the legal status and making the right land certificate can help us from various disputes in the future.

Before applying for a certificate, several documents are required as the completeness of the requirements.

The Following is The Meaning of Each Type of Land Right.

*) Hak Guna Bangunan (HGB) or Building Rights is an authority granted by the government or an acquired right to use the land that is not own within a period of 30 years. However, at the request of the owner of the land, the right to use the land can be extended for 20 years. In this condition, the HGB owner actually only has the right to the building, while the land belongs to the state. Companies usually do this because HGU can only be granted to Indonesian citizens, or legal entities established under Indonesian law and domiciled in Indonesia.

*) Hak Guna Usaha (HGU) or Cultivation Rights is the right to cultivate land controlled by the state. The right to control state land is usually a maximum of 25 years. Usually, the land is used for business purposes in the agricultural, plantation, fisheries, or animal husbandry sectors. The scale of ownership of this HGU starts from 5 hectares. However, if the HGU area exceeds 25 hectares, it usually requires a mechanism to obtain it. One of the conditions to get it is to go through an investment mechanism. Companies usually do this because HGU can only be granted to Indonesian citizens, or legal entities established under Indonesian law and domiciled in Indonesia.

*) Hak Pakai or Usage Right is the right to use and/or collect proceeds from land directly controlled by the State or land owned by others. This Right of Use is granted at the competent authority’s decision or by agreement with the landowner. This is usually done by the company provided that HGU can only be given to Indonesian citizens, legal entities established under Indonesian law and domiciled in Indonesia, foreigners domiciled in Indonesia, representatives of foreign countries, and international legal entities.

*) Sertifikat Hak Milik (SHM) or Property Right is the highest and strongest land title certificate. SHM is a certificate that indicates that the owner of the certificate has full rights as the owner of the land with a certain area stated in the letter with an unlimited time. Owners of SHM can bequeath the land they own to their children or grandchildren according to their agreement and wishes. This is only for Indonesian citizens.

The Terms and Methods of Making The Land Certificate Must Include The Following:

1.	Copy of the applicant’s Identity which has been legalized by the authorized official;
2.	Copy of proof of payment of Land and Building Tax (Pajak Bumi Bangunan/PBB) of the last year;
3.	Copy of Taxpayer Identification Number (Nomor Pokok Wajib Pajak/NPWP);
4.	Deed of Sale and Purchase (Akta Jual Beli/AJB);
5.	Income Tax (Pajak Penghasilan/PPh);
6.	Proof of payment of Acquisition Duty of Right on Land and Building (Bea Perolehan Hak Atas Tanah dan Bangunan/BPHTB).

Furthermore, every home buying process always goes through the step of processing the Sale and Purchase Deed (AJB). AJB made by PPAT or Notary will later be used to manage the transfer of certificates from the previous owner to the new owner.

This deed, which is usually abbreviated as AJB, is legally valid proof that you have purchased land or buildings from the seller in full. The AJB function is also important for you when processing the transfer of title from the property’s previous owner.

To apply for a land certificate from Deed of Sale and purchase to a Freehold Title (Sertifikat Hak Milik/SHM), Building Rights Title (Hak Guna Bangunan/HGB), Cultivation Rights Title (Hak Guna Usaha/HGU), Right of Use of Land (Hak Pakai).

The Following is The Meaning of Each Type of Land Right.

1.	HGB is an authority granted by the government or an acquired right to use the land that is not own within a period of 30 years. However, at the request of the owner of the land, the right to use the land can be extended for 20 years. In this condition, the HGB owner actually only has the right to the building, while the land belongs to the state. Usually, developers use land with HGB status to build housing units and apartments.
2.	HGU is the right to cultivate land controlled by the state. The right to control state land is usually a maximum of 25 years. Usually, the land is used for business purposes in the agricultural, plantation, fisheries, or animal husbandry sectors. The scale of ownership of this HGU starts from 5 hectares. However, if the HGU area exceeds 25 hectares, it usually requires a mechanism to obtain it. One of the conditions to get it is to go through an investment mechanism. Companies usually do this because HGU can only be granted to Indonesian citizens, or legal entities established under Indonesian law and domiciled in Indonesia. The advantage of this HGU is that it can be used as collateral for debt with encumbrances with mortgage rights. This right can be transferred or transferred to another party.
3.	SHM is the highest and strongest land title certificate. SHM is a certificate that indicates that the owner of the certificate has full rights as the owner of the land with a certain area stated in the letter with an unlimited time. Owners of SHM can bequeath the land they own to their children or grandchildren according to their agreement and wishes.
4.	Right of Use is the right to use and/or collect proceeds from land which is directly controlled by the State or land owned by another person. This Rights of Use is granted based on a the decision of the competent authority or based on an agreement with the land owner.

Land Ownership Certificates Based on Indonesian Customary Law and Methods of Registration.

Land “Former Customary Ownership” which according to the popular term is Tanah Girik, comes from customary land or other lands that have not been converted into one of the lands with certain rights (Freehold Title, Building Rights Title, Right of Use, Cultivation Rights Title) and has not been registered or certified at the local Land Office.

In land registration for the first time there are two methods, namely:

1.	Systematic land registration. Systematic land registration is a land registration activity for the first time that is carried out simultaneously which includes all land registration objects that have not been registered in the territory or part of the territory of a village/kelurahan.
2.	Sporadic land registration. Sporadic land registration is a land registration activity for the first time regarding one or several objects of land registration in the territory or part of the territory of a village/kelurahan individually or in mass. Sporadic land registration is carried out at the request of interested parties.

Disclaimer:

The information provided here is based on our long experience. The process or requirement may vary depending on the specific facts and conditions. Besides, the law and regulations in Indonesia subject to frequent changes. Please contact us as your consultant to get an up to date information and accurate advice. More Information click here and You can also follow our social media accounts to see the latest information posts. please click on the following links: Facebook, Instagram, Linkedin, and Twitter.