Hak Guna Bangunan (The right to build) or HGB title allows the holder to construct and own buildings or other structures on state-owned land (Tanah Milik Negara), freehold land (Hak Milik) and HPL (Hak Pengelolaan) land. This is the most common title for residential, commercial, and industrial properties. An HGB title can be owned by individuals of Indonesian Nationality, Indonesian legal entities, including Foreign Capital Investment Companies (Penanaman Modal Asing/PMA), or Domestic Capital Investment Companies (Penanaman Modal Dalam Negeri/PMDN). Thus, any legal entity such as limited liability companies (Perusahaan Terbatas/PT) which are established under Indonesian Law, with domicile in Indonesia, may obtain a property with HGB title. However, the HGB title is not available for foreign individuals.
The title is granted for an initial period of up to 30 years and can generally be extended for an additional period of 20 years. Subsequent extensions are at the discretion of the state and may be renewed for another 30 years. An approved capital investment company (i.e., PMA or PMDN company), may obtain HGB rights for a period of 80 years (i.e., 30-year initial term, plus 20-year extension term, plus 30-year renewal term).
HGB title over Freehold (Hak Milik) land is valid for a period of 30 years only. Any extensions beyond 30 years would be subject to a new agreement with the landowner and registration of a new HGB/Right to Build title over the privately-owned land.
An HGB/Right to Build title can be sold, gifted, exchanged or handed down and/or encumbered by a mortgage.