Many landholders in Indonesia need to extend or renew their Right to Build Certificate (Sertifikat Hak Guna Bangunan/SHGB) when it is nearing the end period to continue using the land legally. These 2 processes reflect the important aspects of land law compliance for both landowners. Other than legal necessity, property owners can create a strategic move to protect their investments in the long term, especially for assets such as commercial property, industrial sites, or real estate developments.
SHGB is a land title that grants the right to build and use land for a specified period. Unlike SHM (Sertifikat Hak Milik) which is permanent, SHGB has a limited validity, typically structured as follows:
In total, a properly maintained SHGB can last up to 80 years, if all procedures are followed timely and correctly.
According to Article 41 of Government Regulation (Peraturan Pemerintah/PP) Number 18 Year 2021 concerning Management Rights, Land Rights, Apartment Units, and Land Registration, landholders must apply for the extension or the renewal before the current SHGB expires.
Delays or failure to apply for extension or renewal of SHGB may result in:
Referring to Article 40 of the same regulation, SHGB can be extended or renewed if the following conditions are met:
If SHGB is not extended or renewed:
This could significantly disrupt asset usage, operations, and investment value—especially for companies with ongoing commercial activities on the land.
Whether you’re a corporate landholder or an individual property owner, ensuring timely SHGB extension or renewal is critical to protect your land rights and investment value.
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Standard Classification of Indonesian Business Fields(KBLI 2020) Indonesian business classification is governed by the Standard Classification Of Indonesian Business Fields (Klasifikasi Baku Lapangan Usaha Indonesia/KBLI). KBLI is a classification of Indonesian economic activities that produce products/outputs, both in the form of goods and services, based on business fields that are used
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