HGB in Indonesia: How the 30-Year Term and Renewal Work
Indonesia is attracting more and more foreign investors, especially on islands like Lombok, where real estate development is booming.
One of the safest and most legal ways to hold property is through a Hak Guna Bangunan (HGB), which allows a foreign-owned company (PT PMA) to hold property for an initial term of 30 years, renewable for up to 80 years in total.
But how does this 30-year period actually work?
What are the renewal mechanisms?
And can you really be sure of keeping your property long-term?
1. HGB: A Time-Limited Property Right
Hak Guna Bangunan (HGB) is the legal right to build and use land in Indonesia.
It is typically granted for an initial period of 30 years, with renewal options under specific conditions.
Why the time limit?
Indonesia protects its land resources and reserves full freehold ownership (Hak Milik) for Indonesian citizens only.
HGB, however, gives foreign investors a tangible and transferable real property right — though limited in duration.
2. How HGB Renewal Works
HGB can be extended up to 80 years in total, broken down as follows:
Initial 30 years – Granted upon the issuance of the HGB title.
20-year extension – Applied for through the Indonesian Land Office (BPN).
30-year renewal – After the extension, another renewal can be granted.
Total possible duration: 80 years of legal ownership.
Conditions for renewal:
Renewal is not automatic — it requires meeting specific criteria:
The PT PMA must be in good standing – All business licenses and tax obligations must be up to date.
Land use must remain consistent with the original purpose (e.g., residential land cannot be turned into industrial use without approval).
Renewal fees must be paid to the land authorities.
When these conditions are met, renewal is generally approved without issue.
3. Is Renewal Guaranteed?
Yes — provided the rules are followed.
Unlike some countries where lease renewals can be uncertain, Indonesia has a clear legal framework for HGB extensions.
As long as the investor complies with regulations, the Land Office will approve the renewal.
Potential risks:
The main risk is a change in regulations that could affect the HGB system.
However, given Indonesia’s strong need for foreign investment, current laws remain favorable to investors.
Tip: You can apply for renewal before the expiry date to avoid any legal uncertainty.
4. What Happens After 80 Years?
Once the 80-year term ends, the HGB expires and must be re-registered.
At that stage, investors typically choose to:
Convert the HGB into a new HGB under a newly formed PT PMA.
Sell the property to an Indonesian citizen, who can convert it into Hak Milik.
Negotiate a new agreement with the land authorities.
In practice, most investors sell or restructure long before reaching the end of the term, ensuring the continuity of their investment.
5. Comparing HGB with Other Land Rights in Indonesia
Hak Milik
Duration: Unlimited
Renewable?: N/A
Available to Foreigners?: No
Permitted Use: Full freehold
Hak Sewa
Duration: 25–30 years
Renewable?: Yes
Available to Foreigners?: Yes
Permitted Use: Lease only
Hak Pakai
Duration: 30 years
Renewable?: Up to 80 yrs
Available to Foreigners?: Yes (with conditions)
Permitted Use: Residential
HGB
Duration: 30 years
Renewable?: Up to 80 yrs
Available to Foreigners?: Yes (via PT PMA)
Permitted Use: Residential, commercial, hospitality
HGB remains the most practical and secure solution for foreigners who want to invest in Indonesia while being able to build, sell, and operate real estate legally.
6. Conclusion: HGB – A Secure Path for Investing in Lombok
Although time-limited, HGB offers strong investment security in Indonesia, with predictable renewals for up to 80 years.
It allows investors to:
✔ Build and operate property legally.
✔ Sell or transfer ownership without restriction.
✔ Access financing by mortgaging the property.
✔ Remain fully compliant with local laws.
For a stress-free investment in Lombok, it’s essential to get professional legal guidance and plan renewals well in advance to safeguard your property for the long term.