When buying a house in Indonesia, the terms SHM and SHGB are almost certain to come up. Many buyers of new homes from developers receive an SHGB certificate, then ask: is it safe, how is it different from SHM, and can it be changed?
This article explains the difference between the two, their pros and cons, and how to upgrade an SHGB to an SHM under the rules of the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN).
A Sertifikat Hak Milik (SHM), or freehold title certificate, is proof of ownership of land with the strongest and fullest status under the Basic Agrarian Law (Law Number 5 of 1960). Freehold title has no time limit, can be inherited, and can be sold or transferred.
Freehold title can only be held by Indonesian citizens. Legal entities, including developer companies, generally cannot hold freehold title.
A Sertifikat Hak Guna Bangunan (SHGB), or right-to-build certificate, is proof of the right to construct and own buildings on land that does not belong to the holder, such as state land or land under a management right.
Unlike SHM, HGB has a time limit. Under Government Regulation Number 18 of 2021, HGB is granted for up to 30 years, can be extended for up to 20 years, and can be renewed for up to 30 years. HGB can be held by Indonesian citizens and Indonesian legal entities.
Because developers are legal entities, housing land is generally held under HGB status. When a home is sold, the master HGB certificate is split into individual plot certificates in the buyer's name, with the status remaining HGB.
This is normal and not a sign of a problem with the home. Owners can upgrade the status to SHM once the certificate is in their own name.
Term: SHM has no time limit, while SHGB has a fixed term that must be extended or renewed.
Holder: SHM is for individual Indonesian citizens only, while SHGB can be held by citizens and Indonesian legal entities.
Strength of right: SHM is the strongest and fullest right to land, while SHGB is a right to a building on another party's land or state land.
Loan collateral: both can be used as collateral for a mortgage or loan through a mortgage right (hak tanggungan).
For a private home, SHM provides stronger legal certainty because it has no time limit and does not need to be extended. Even so, SHGB remains valid and secure as long as its term is still running. What SHGB owners need to watch is the expiry date, so it is not missed.
That is why many homeowners choose to upgrade SHGB to SHM, especially now that the process is relatively simple.
The Ministry of ATR/BPN encourages owners of residential homes with HGB certificates to upgrade to SHM. The general requirements are:
Main requirements:
The applicant is an individual Indonesian citizen.
The land is used for a residential home.
The land area is no more than 600 m².
The HGB certificate is already in the applicant's name.
Documents usually required:
The original HGB certificate.
Copies of the ID card (KTP) and family card (KK).
The building permit (IMB or PBG) for the home. If unavailable, a letter from the local village office stating the building is used as a residence.
The land and building tax notice (SPPT PBB) showing a building on the land.
The change-of-rights application form from the land office.
Steps:
1. Visit the land office covering the property's location, or authorise a notary/PPAT.
2. Fill in the change-of-rights application form and attach the documents.
3. Pay the change-of-rights non-tax state revenue (PNBP) fee.
4. Wait for the land office to verify the data.
5. Collect the issued SHM certificate.
According to the Ministry of ATR/BPN in May 2026, the PNBP fee for changing a residential HGB to SHM is Rp50,000, with an estimated processing time of around five working days.
Beyond the PNBP, other costs may apply, such as notary/PPAT fees if the process is delegated, or other obligations under local regulations. It is best to confirm directly with the land office before applying.
If the home is still being paid off through a mortgage, the certificate is usually held by the bank as collateral. The change-of-rights application therefore needs to be coordinated with the lending bank first. Ask your bank about its procedure, as policies differ between banks.
For a full overview of the mortgage process, read the 2026 Mortgage Guide. A breakdown of the costs of buying a home, from the down payment and PPN to BPHTB, is covered in The Cost of Buying a House in 2026.
What is the main difference between SHM and SHGB?
SHM has no time limit and is only for Indonesian citizens, while SHGB has a fixed term and can be held by citizens and legal entities.
Is an SHGB home safe to buy?
Yes, as long as the certificate is valid and its term is still running. Owners can also upgrade it to SHM.
Why do new developer homes come with SHGB?
Because developers are legal entities that generally hold land under HGB status. Once split into the buyer's name, the HGB status can be upgraded to SHM.
How much does it cost to upgrade SHGB to SHM?
According to the Ministry of ATR/BPN, the change-of-rights PNBP for a residential home on up to 600 m² of land is Rp50,000, with processing taking around five working days.
Can SHGB be used as mortgage collateral?
Yes. HGB can be encumbered with a mortgage right as loan collateral, just like freehold title.
This article is general information. Rules and fees may change, so please confirm with your local land office or a notary/PPAT.
For more information about Damai Putra Group homes, contact the Damai Putra Group Marketing Gallery via WhatsApp Official 0811 4466 888 or visit www.damaiputra.com.
This article explains the difference between the two, their pros and cons, and how to upgrade an SHGB to an SHM under the rules of the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (ATR/BPN).
What Is SHM?
A Sertifikat Hak Milik (SHM), or freehold title certificate, is proof of ownership of land with the strongest and fullest status under the Basic Agrarian Law (Law Number 5 of 1960). Freehold title has no time limit, can be inherited, and can be sold or transferred.
Freehold title can only be held by Indonesian citizens. Legal entities, including developer companies, generally cannot hold freehold title.
What Is SHGB?
A Sertifikat Hak Guna Bangunan (SHGB), or right-to-build certificate, is proof of the right to construct and own buildings on land that does not belong to the holder, such as state land or land under a management right.
Unlike SHM, HGB has a time limit. Under Government Regulation Number 18 of 2021, HGB is granted for up to 30 years, can be extended for up to 20 years, and can be renewed for up to 30 years. HGB can be held by Indonesian citizens and Indonesian legal entities.
Why Are New Developer Homes Usually SHGB?
Because developers are legal entities, housing land is generally held under HGB status. When a home is sold, the master HGB certificate is split into individual plot certificates in the buyer's name, with the status remaining HGB.
This is normal and not a sign of a problem with the home. Owners can upgrade the status to SHM once the certificate is in their own name.
SHM vs SHGB: The Differences
Term: SHM has no time limit, while SHGB has a fixed term that must be extended or renewed.
Holder: SHM is for individual Indonesian citizens only, while SHGB can be held by citizens and Indonesian legal entities.
Strength of right: SHM is the strongest and fullest right to land, while SHGB is a right to a building on another party's land or state land.
Loan collateral: both can be used as collateral for a mortgage or loan through a mortgage right (hak tanggungan).
Which Is Safer?
For a private home, SHM provides stronger legal certainty because it has no time limit and does not need to be extended. Even so, SHGB remains valid and secure as long as its term is still running. What SHGB owners need to watch is the expiry date, so it is not missed.
That is why many homeowners choose to upgrade SHGB to SHM, especially now that the process is relatively simple.
How to Upgrade SHGB to SHM
The Ministry of ATR/BPN encourages owners of residential homes with HGB certificates to upgrade to SHM. The general requirements are:
Main requirements:
The applicant is an individual Indonesian citizen.
The land is used for a residential home.
The land area is no more than 600 m².
The HGB certificate is already in the applicant's name.
Documents usually required:
The original HGB certificate.
Copies of the ID card (KTP) and family card (KK).
The building permit (IMB or PBG) for the home. If unavailable, a letter from the local village office stating the building is used as a residence.
The land and building tax notice (SPPT PBB) showing a building on the land.
The change-of-rights application form from the land office.
Steps:
1. Visit the land office covering the property's location, or authorise a notary/PPAT.
2. Fill in the change-of-rights application form and attach the documents.
3. Pay the change-of-rights non-tax state revenue (PNBP) fee.
4. Wait for the land office to verify the data.
5. Collect the issued SHM certificate.
How Much Does It Cost and How Long Does It Take?
According to the Ministry of ATR/BPN in May 2026, the PNBP fee for changing a residential HGB to SHM is Rp50,000, with an estimated processing time of around five working days.
Beyond the PNBP, other costs may apply, such as notary/PPAT fees if the process is delegated, or other obligations under local regulations. It is best to confirm directly with the land office before applying.
What If the Home Is Still Under a Mortgage?
If the home is still being paid off through a mortgage, the certificate is usually held by the bank as collateral. The change-of-rights application therefore needs to be coordinated with the lending bank first. Ask your bank about its procedure, as policies differ between banks.
For a full overview of the mortgage process, read the 2026 Mortgage Guide. A breakdown of the costs of buying a home, from the down payment and PPN to BPHTB, is covered in The Cost of Buying a House in 2026.
Frequently Asked Questions
What is the main difference between SHM and SHGB?
SHM has no time limit and is only for Indonesian citizens, while SHGB has a fixed term and can be held by citizens and legal entities.
Is an SHGB home safe to buy?
Yes, as long as the certificate is valid and its term is still running. Owners can also upgrade it to SHM.
Why do new developer homes come with SHGB?
Because developers are legal entities that generally hold land under HGB status. Once split into the buyer's name, the HGB status can be upgraded to SHM.
How much does it cost to upgrade SHGB to SHM?
According to the Ministry of ATR/BPN, the change-of-rights PNBP for a residential home on up to 600 m² of land is Rp50,000, with processing taking around five working days.
Can SHGB be used as mortgage collateral?
Yes. HGB can be encumbered with a mortgage right as loan collateral, just like freehold title.
This article is general information. Rules and fees may change, so please confirm with your local land office or a notary/PPAT.
For more information about Damai Putra Group homes, contact the Damai Putra Group Marketing Gallery via WhatsApp Official 0811 4466 888 or visit www.damaiputra.com.
