SHM, HGB, or Girik? The One Document That Decides What Your Land Is Really Worth
6 min read
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6 min read
Two plots of land can sit on the same street, be the same size, and list for the same price per meter, and still not be worth the same thing. The difference is not the soil or the view. It is which of three documents, SHM, HGB, or girik, actually backs the claim that someone owns it. As of June 2026, Indonesia's land agency, Kementerian ATR/BPN, says roughly 4 million of the country's about 126 million land parcels still have no certificate at all. A lot of what stands in for one is weaker than buyers assume.
Each of the three sits at a different level of legal strength, and the gap between them is not small:
| Document | What it actually proves | Expires? | Who can hold it |
|---|---|---|---|
| SHM (Sertifikat Hak Milik) | Full, permanent ownership | No | Indonesian citizens only |
| HGB (Hak Guna Bangunan) | The right to build and use, not to own the land | Yes | Citizens and companies (including foreign-owned PT PMA) |
| Girik, Letter C, Petuk D, landrente | As of February 2026: nothing on its own | Was never a certificate | Not applicable |
The rest of this post walks through each row, and what it means in practice when two plots that look identical on paper are not.
Sertifikat Hak Milik, usually just called SHM, is the strongest land right that exists in Indonesia. It means full ownership of the land itself, not just what is built on it, with no time limit and no renewal required. Under the 1960 Basic Agrarian Law (UUPA), Article 21 restricts Hak Milik to Indonesian citizens; a foreign national or a foreign-owned company cannot hold one directly. This is the certificate every conversion process in this post is ultimately working toward, and it is the one banks trust most readily as mortgage collateral.
Hak Guna Bangunan, or HGB, is a right to build on and use land that legally belongs to the state or to another party, not to the certificate holder. It is what most apartments, ruko, and many housing developments actually sit on. HGB has a real expiry date: on state or Hak Pengelolaan land, it runs for a maximum of 30 years, can be extended once for up to 20 more years, and renewed once more for up to 30 years, an 80-year ceiling in total under Government Regulation (PP) No. 18/2021. HGB built on top of someone else's Hak Milik land works differently: it runs 30 years and cannot be extended, only renewed, and the holder must apply at least two years before it lapses. Miss that window and the right to the building itself is at risk, not just the paperwork.
Girik, Letter C, Petuk D and landrente are not certificates. They are old land-tax records, some dating to the Dutch colonial period, that many Indonesian families have treated for decades as informal proof that a plot belongs to them. As of 2 February 2026, that assumption stopped holding up even informally: Kementerian ATR/BPN's Arie Satya Dwipraja confirmed these documents no longer function as evidence of land ownership at all. They can still be used as a location reference when someone applies to formally register the land and convert it into an SHM, but they no longer stand on their own as proof of a right, per Kompas.com and Government Regulation (PP) No. 18/2021.
This has practical teeth. Regular commercial banks generally require a valid SHM or HGB before approving a mortgage or using land as loan collateral; girik-backed land is normally only accepted, if at all, through smaller rural lenders (BPR) under specific rules for micro-lending, and even then banks are required to apply extra caution because a default is harder to enforce against unregistered land. A lot of older village houses and undeveloped residential plots outside major cities are still held this way.
Converting starts with a formal first-time land registration at the local BPN office. Two different cost components are involved, and they should not be confused with each other:
For land under 600 square meters owned by lower-income households, the government's PTSL program (Pendaftaran Tanah Sistematis Lengkap, Complete Systematic Land Registration) can waive the measurement and registration fees entirely. BPHTB, where it applies, is a separate tax and is not waived by PTSL.
None of this shows up in a listing photo. Two plots priced identically per square meter are not equally valuable if one carries a clean SHM and the other is still on girik that, as of this year, cannot even be used to prove ownership in a dispute. The certificate is not paperwork sitting on top of the asset's value; for land specifically, it is a large part of the value itself, the same underlying risk our breakdown of tanah kavling liquidity risk covers from the selling side, and one this series flagged again while researching farmland investment returns.
If you already own land or are logging a property under NetWort's Manual Assets, the certificate type belongs in your notes, not just the estimated value. A plot on SHM and a plot on unconverted girik should never be tracked as if they carry the same risk, even if today's market price looks the same on paper.