5 Types of House Certificates Applicable in Indonesia

A certificate is one of the most important proofs of homeownership. Not only does it represent legal ownership, but it also carries substantial legal authority that can protect you from various potential losses. But did you know that there is more than one type of house certificate?

There are at least five types of homeownership certificates recognized in Indonesia. Each type has its own function and advantages.

Types of House Certificates 

Here are the types of house certificates applicable in Indonesia:

Certificate of Ownership (SHM)

The Certificate of Ownership (Sertifikat Hak Milik, SHM) is the most popular type of certificate and is highly sought after by those looking to buy a house. What exactly does SHM entail?

SHM signifies full ownership of the land or property, including any buildings on it. This certificate carries the highest legal authority and can be sold, inherited, or used as collateral at a bank.

Due to its strong legal standing, owning a property with an SHM is highly recommended. The cost of processing an SHM varies depending on the land area and other measurement fees, which differ from one region to another.

Building Use Rights Certificate (SHGB)

Unlike SHM, a Building Use Rights Certificate (Sertifikat Hak Guna Bangunan, SHGB) grants the right to construct and use a building, but not ownership of the land on which the building stands.

SHGB is valid for approximately 30 years and can be extended for an additional 20 years. Building a house under an SHGB certificate involves stricter and more complex licensing processes compared to SHM.

SHGB has lower legal authority than SHM, making it non-transferable. Additionally, SHGB cannot be used as collateral at a bank.

Apartment Ownership Certificate (SHRS)

Another type of house certificate is the Apartment Ownership Certificate (Sertifikat Hak Satuan Rumah Susun, SHRS). Despite the name, this certificate also applies to ownership of offices, commercial kiosks, flats, and condominiums.

SHRS serves as proof of ownership of an apartment unit or other types of buildings constructed on shared land. The certificate holder also owns a portion of the land on which the building stands.

The legal standing of SHRS is almost equivalent to SHM. It can be sold and used as collateral at a bank.

Sale and Purchase Deed (AJB)

The Sale and Purchase Deed (Akta Jual Beli, AJB) is not technically a house certificate but is an important document proving homeownership through a transaction. AJB complements other certificates like SHM, SHGB, or SHRS.

In Indonesia, AJB is issued by a PPAT (Land Deed Official). AJB cannot be used as collateral at a bank, as it is not a certificate. However, it is crucial to keep this document safe after completing a property transaction.

Girik 

Girik, or Petok, is a term familiar to many Indonesians. It is proof of ownership of customary land whose legal rights have not yet been registered with the government. Girik is typically issued to subdivide large parcels of land initially owned by one person into smaller plots for multiple individuals.

Girik has limited legal standing in banks. However, its legality can be maintained by involving local land officials during the processing.

Conclusion

These are some of the types of house certificates applicable in Indonesia. If you plan to buy a house, especially a subsidized house, make sure to purchase it from a highly reputable developer like Ingria Group. This can protect you from financial and legal risks in the future.