Extension and Renewal of Right to Build
By Gary Nathannael / 18 January 2024
Understand the process of extending and renewing the right to build as one of the land rights in Indonesia.
Key Points
HGB over the (i) state land, and (ii) land under the HPL land is granted for a maximum period of 30 years, can be extended for a maximum period of 20 years, and can be renewed for a maximum period of 30 years.
HGB over the land under HM is valid for a maximum period of 30 years, cannot be extended, and can only be renewed based on an agreement with the holder of HM land.
The extension of HGB is submitted if (i) the building over the land has been built, used and utilized effectively, or (ii) at the latest before the period of right is expired.
The application for the renewal of HGB is submitted no later than 2 years after the right has expired.
The application for the extension of HGB over the state land on which the condominium is built, can be submitted simultaneously with the application for granting rights.
The application for extension and renewal of HGB over the HPL on which the condominium is built, can be submitted simultaneously with the application for granting rights, accompanied with a letter of recommendation from the HPL holder.
Background
The right to build (hak guna bangunan “HGB”) is a type of land rights in Indonesia that allows the rights holder to construct and own buildings over the land.
The provisions on the granting, extension and renewal of HGB are regulated under the Government Regulation No. 18 of 2021 on Management Rights, Land Rights, Condominium Units, and Land Registration (“GR 18/2021”) and Regulation of the Minister of Agrarian and Spatial Plan/Head of National Land Agency No. 18 of 2021 on Procedures for Determining Management Rights and Land Rights (“MATR Regulation 18/2021”).
This article specifically discusses the extension and renewal of HGB.
Period of HGB
HGB can be granted over the state land, land under the right of management (hak pengelolaan “HPL”), or land with right of ownership (hak milik “HM”).
HGB over the state land and HPL is granted for a maximum period of 30 years, can be extended for a maximum period of 20 years, and can be renewed for a maximum period of another 30 years. Meanwhile, HGB over the HM is valid for 30 years and cannot be extended. However, this type of HGB can be renewed based on an agreement with the holder of HM.
Provisions for the Extension and Renewal of HGB
The extension of HGB can be submitted if (i) the building over the land has been built, used and utilized effectively, or (ii) at the latest before the period of right is expired.
Meanwhile, the application for the renewal of HGB is submitted no later than 2 years after the the right has expired.
If a condominium is constructed over the land with HGB, then:
for HGB over the state land, the extension can be submitted simultaneously with the application for granting rights; and
for HGB over the HPL, the extension and renewal can be submitted simultaneously with the application for granting rights, accompanied by a letter of recommendation from the HPL holder.
Document requirements for applications for the extension and renewal of HGB are regulated in detail under Article 98 of MATR Regulation 18/2021.
Key Contacts
Ivor I. Pasaribu
