What is the difference between SHM, SHGB and Hak Pakai?

Every Bali property conversation eventually turns on one question: what does the certificate actually say? Agents use "freehold" loosely. The certificate does not.

The four rights that matter

Hak Milik is the strongest right in Indonesian law and it is closed to foreigners in every circumstance. Not through a company, not through a spouse, not through an arrangement. A PT PMA cannot hold it either.

If a listing says "freehold" and the buyer is foreign, one of two things is true: the structure is actually something else, or it is a nominee arrangement.

HGB: the commercial route

HGB lets the holder build on and use land they do not own outright. It is the normal route for a foreign-owned company holding property for commercial purposes, and it can be mortgaged and transferred.

It comes in two forms, and the difference decides your timeline:

Nobody can promise you an HGB conversion timeline without first establishing which of these applies. On a private-granted conversion, the seller's cooperation is a dependency you do not control.

Hak Pakai: the residential route

Hak Pakai is the one route that puts a registered certificate in a foreign individual's own name. It requires residency, a KITAS or KITAP, and the property must be residential and meet a minimum value.

It does not authorise a rental business. A residence and an accommodation business are different legal activities.

The 80-year number

You will hear "80 years" constantly. The framework is 30 years, plus up to 20 years extension, plus up to 30 years renewal.

Each step must be applied for, approved and paid for. It is a sequence of permissions, not a guaranteed eighty-year term. Diarise the expiry dates the day you buy.

What actually goes wrong

• The certificate is a photocopy or a photograph, never the original
• The certificate is real but a second certificate exists over the same land
• The seller on the certificate is dead and the heirs have not all consented
• The land is joint marital property and the spouse has not consented
• A hak tanggungan, a registered mortgage, sits against the title
• The land is adat land that cannot be transferred to outsiders at all

Every one of these is found the same way: your own notary verifies the certificate at the local BPN office. Not the seller's notary. Yours.

Land rights and building compliance are also separate questions. A clean certificate tells you nothing about whether the building on it has a PBG.

Reading an Indonesian land certificate

The certificate tells you four things that matter: the title type, the registered holder, the term if there is one, and the parcel it covers. Everything else in a transaction depends on those four.

Girik land

Girik and similar documents are tax records or customary evidence of possession, not registered title. Land held this way is common in Bali, particularly inland and in family holdings, and it trades at a discount for good reason.

It can be converted to registered title, but the process takes time, costs money, and can surface competing claims from family members who were not part of the sale conversation. Buying girik land on the assumption that conversion is a formality is one of the more reliable ways to acquire a dispute.

Conversion between title types

Moving land from SHM to SHGB is a normal step when a plot passes from an individual to a company, and from SHM to SHP when a qualifying foreigner takes a right of use. Both are established procedures.

What matters is that the conversion is completed and the new certificate issued in the correct name before you treat the transaction as done. Buyers have paid in full against a promise of conversion and held nothing but a receipt while the process stalled.

Verifying a certificate

Never rely on a photocopy, a photograph, or a seller's summary. Have a notary you appointed check the original against the land office record. That check confirms the certificate is genuine, that the holder is who the seller says, and that no charge has been registered against it.

Ask specifically about registered mortgages. A charge over the land follows the land, and discovering it after the deed is signed is discovering it too late.