Bali has long been a magnet for investors and expatriates seeking property in paradise. However, navigating the Indonesian property market requires understanding local laws and ownership structures. One of the most common property titles that foreigners encounter in Bali is the HGB certificate property Bali, or Hak Guna Bangunan.
What is an HGB Certificate?
HGB stands for Hak Guna Bangunan, which translates to Right to Build. Essentially, this certificate allows an individual or company to legally build and own a structure on land owned by someone else for a specified period. Unlike freehold (Hak Milik), which is reserved for Indonesian citizens, HGB can be granted to foreign-owned companies (PT PMA), making it the most practical way for foreigners to legally invest in property in Bali.
Key Features of HGB:
Validity Period: HGB is initially issued for 30 years and can be extended for an additional 20 years and then another 30 years, giving a potential maximum of 80 years of legal usage.
Land Ownership: HGB does not confer ownership of the land itself, only the rights to use and develop it.
Transfer & Sale: HGB rights can be sold, leased, or inherited, making it a flexible investment option.
Why Foreigners Prefer HGB for Bali Property
Foreigners in Bali often choose HGB for several reasons:
Legal Security: Owning property under a PT PMA with an HGB certificate ensures full compliance with Indonesian law.
Flexibility in Development: HGB allows investors to construct villas, commercial properties, or other developments on legally leased land.
Long-Term Investment: With extensions, an HGB can provide decades of secure property use, making it a viable alternative to full ownership.
How to Obtain an HGB Certificate
For foreigners, the most common path to HGB is through a foreign-owned company (PT PMA). Here’s a simplified overview of the process:
Establish a PT PMA: This company allows foreigners to legally hold an HGB.
Find Suitable Land: Ensure the land is zoned appropriately and free of disputes.
Apply for HGB: Submit necessary documents to the National Land Agency (BPN).
Secure Construction Permits: Obtain building permits (IMB) if you plan to develop the land.
It’s essential to work with experienced legal and property consultants in Bali to ensure a smooth process and avoid potential legal pitfalls.
HGB vs. Other Property Titles
| Title | Ownership | Foreign Eligibility | Duration |
|---|---|---|---|
| Hak Milik | Full ownership | Only Indonesians | Perpetual |
| HGB | Right to build | Foreign via PT PMA | 30 + 20 + 30 years |
| Hak Pakai | Usage rights | Foreign eligible | Usually up to 25-70 years |
For foreign investors, HGB is often the safest and most practical choice for villa and commercial property investments in Bali.
Tips for Foreign Buyers
Always verify land certificates with the National Land Agency.
Engage a reputable notary experienced in HGB transactions.
Consider a long-term lease agreement if establishing a PT PMA is not feasible.
Be aware of local zoning laws and village approvals, especially for coastal or tourist areas.
Conclusion
Owning property in Bali as a foreigner is possible and legally secure through HGB certificates. While it doesn’t grant outright land ownership, it provides the right to develop, use, and profit from the property for decades. With careful planning, legal guidance, and strategic investment, HGB can be your gateway to enjoying and benefiting from the beautiful island of Bali.