Understanding HGB in Indonesia: Can You Really Own and Sell Property?
Indonesia attracts many foreign investors, especially on rapidly developing islands like Lombok. However, the local legal framework imposes certain restrictions on land ownership — particularly with Hak Guna Bangunan (HGB).
Many ask: “If my land is under HGB, am I really the owner? And how can I legally sell my property?”
Here are the answers.
HGB: A Secure and Tangible Right for Investors
Hak Guna Bangunan (HGB), or the Right to Build and Use, is the most suitable title for foreigners looking to invest in real estate in Indonesia.
It allows a foreign-owned company (PT PMA) to own a building on land that technically remains under the ownership of the state or an Indonesian citizen.
So, am I an owner with an HGB?
Yes and no. Unlike Hak Milik (full freehold, reserved for Indonesian citizens), HGB grants you a tangible, transferable right over the land and buildings.
With HGB, you can:
Sell the property (villas, apartments, hotels) to another HGB buyer.
Lease the land or building to individuals or companies.
Mortgage the property to obtain financing.
Renew the HGB after 30 years (up to 80 years with extensions).
HGB is a genuine form of long-term property ownership, officially registered and certified by the Indonesian government.
How to Legally Sell an HGB Property
If you own property under HGB, you can legally sell it in several ways:
1. Sale to Another HGB Investor
The buyer (through another PT PMA) acquires the property and benefits from the remaining HGB term, with the option to renew.
The sale is formalized by a notary (PPAT) and registered with the Land Office.
2. Conversion to Hak Milik (If Selling to an Indonesian)
If the buyer is an Indonesian citizen, they can convert HGB into Hak Milik and become the absolute owner of both land and buildings.
3. Selling a PT PMA that Owns HGB Properties
Instead of selling the property itself, you can sell the shares of your PT PMA.
The buyer then owns the property through the company.
This method is widely used by major investors.
Why HGB is the Best Option for Foreigners
✔ Secure – Protected by Indonesian law, with renewals possible for up to 80 years.
✔ Transferable – HGB properties can be sold to either foreign or local buyers.
✔ Mortgageable – You can use the property as collateral for a loan.
✔ Fully Legal – No risk of legal disputes if the process is followed correctly.
Conclusion: Invest with Peace of Mind Using HGB
While HGB is not absolute land ownership, it grants full rights over the buildings and exclusive usage of the land.
It remains the best legal framework for foreigners seeking to invest and resell real estate in Indonesia.
If your goal is to build, operate, and sell villas or a resort in Lombok, HGB is the key to a safe, legal, and profitable investment.