Bali Land Certificates Decoded: SHM, HGB, Hak Pakai and Girik Explained for Buyers

Every plot of land in Bali sits behind a piece of paper, and that piece of paper decides what you can legally do with it. Understanding Bali land certificate types — SHM, HGB, Hak Pakai and the old customary documents like girik — is the single most useful piece of legal literacy a foreign buyer can acquire. Agents will throw these abbreviations around casually. Sellers will assure you "the certificate is fine". But the differences between these titles determine whether a deal is safe, restructurable, or simply impossible for you as a foreigner. This guide decodes each certificate type, what it means for a buyer in 2026, and the red flags that should stop a transaction cold.

Why the certificate matters more than the villa

In Indonesia, land rights are formalised through certificates issued by the national land office (BPN — Badan Pertanahan Nasional). The certificate states the type of right, the registered holder, the boundaries, and the term (if the right expires). A beautiful villa built on the wrong title — or on land with no registered title at all — is a liability, not an asset.

For foreigners, the certificate question is doubly important because Indonesian law restricts which rights a foreign individual or foreign-owned company can hold. Most structures you will encounter as a buyer — leasehold, Hak Pakai, HGB through a PT PMA — are built on top of an underlying certificate, and the strength of your position depends on the strength of that underlying title. At Teville, every one of the 100+ leasehold plots we list passes a due diligence check that starts with exactly this: certificate verification at the land office, zoning confirmation, and a review of the ownership chain. You can browse those vetted plots to see what a clean title package looks like in practice.

SHM (Sertifikat Hak Milik): freehold, Indonesians only

SHM — Sertifikat Hak Milik, or "right of ownership" — is the strongest land title in Indonesia. It is full, perpetual freehold: no expiry date, freely inheritable and transferable, usable as loan collateral.

The catch for you is absolute: only Indonesian citizens can hold SHM. Not foreigners, not foreign companies, and not even a foreign-owned Indonesian company (PT PMA). There is no workaround that puts SHM in your name legally. Schemes that promise "freehold for foreigners" via a nominee — an Indonesian citizen holding SHM on your behalf — are prohibited under Indonesian law, and courts have consistently sided against the foreign party when these arrangements collapse.

What SHM means for you as a buyer is different: it is the title you want to see underneath your deal. When you lease land in Bali, the strongest position is a lease registered against SHM land with a clean, verified owner. When a PT PMA acquires HGB, that HGB is often granted on top of what was previously SHM land. SHM is not your title — it is the bedrock your rights sit on.

HGB (Hak Guna Bangunan): the building-rights title for companies

HGB — "right to build" — allows the holder to construct and own buildings on land. It is the standard title for Indonesian companies, and crucially it is the title a foreign-owned PT PMA company can hold. That makes HGB the closest thing to ownership a foreign investor can reach in Bali, provided the investment is structured through a properly capitalised PT PMA.

HGB is granted for an initial term of up to 30 years, extendable by up to 20 years, and then renewable for a further period — a potential cycle of up to 80 years under current regulations. It is transferable, inheritable through company shares, and can be mortgaged. The obligations are real, though: a PT PMA must be a genuine, capitalised business, file taxes, and use the land in line with its licensed business purpose. HGB is the right structure for buyers running villas as a commercial rental operation; it is usually overkill for a personal holiday home.

Hak Pakai: the right-to-use title foreigners can hold directly

Hak Pakai — "right to use" — is the one registered land title a foreign individual can hold in their own name, provided they have a valid Indonesian residence permit (such as a KITAS or KITAP). It is granted for an initial period of up to 30 years, extendable and renewable in stages up to a total of 80 years under the current regulatory framework, and it must be used for a residence, on land that meets minimum-value and size criteria set by regulation for foreign holders.

Hak Pakai suits a specific profile: a resident foreigner who wants one home in their own name and can satisfy the qualifying criteria. It is less common than leasehold in practice because it requires residency status, applies to a single dwelling, and involves converting the underlying title. If you are weighing Hak Pakai against a long leasehold or a PT PMA structure, the honest answer is that each fits a different situation — our guides section covers the comparison in depth, and a notary should confirm your eligibility before you commit.

Girik and other customary documents: not certificates at all

Here is where buyers get hurt. Girik, pipil, petuk pajak, Letter C, and similar documents are not land certificates. They are old, pre-registration evidence of customary land holding — often essentially tax records — dating from before Indonesia's modern land registration system. A large share of land in Bali, especially in rural and up-and-coming areas, has never been formally registered and is still held on these documents.

The legal ground shifted decisively in 2026. Under Government Regulation 18 of 2021, holders of old customary evidence were given a five-year window to register their land; that window closed on 2 February 2026. Since that date, girik-type documents no longer function as standalone proof of ownership — at most they serve as supporting evidence in a registration process at the land office. The government's systematic registration program (PTSL) has been converting such land into certificated titles across Indonesia, but plenty of unregistered plots remain.

For a buyer, the implication is blunt: never lease, and never let your PT PMA buy, land that is offered on girik or similar paperwork alone. The seller may genuinely control the land — or the family next door may have an equally old paper saying otherwise. Boundary disputes, competing heirs, and overlapping claims are concentrated precisely in unregistered land. If a plot you love is uncertificated, the only safe sequence is: the owner registers and certificates the land first, then you transact. Factor the time that takes into your plans.

Leasehold: a contract on top of a certificate

One more clarification, because it confuses many buyers: "leasehold" (hak sewa) is not a certificate type. It is a contractual right to use land for an agreed term, created by a notarial lease deed between you and the landowner. Its strength depends entirely on the underlying title and the drafting of the deed. A 25–30 year lease over verified SHM land, signed before a notary with clear extension and inheritance clauses, is the workhorse structure of the Bali villa market — it is how most foreigners hold villas, and it is the structure behind the plots Teville lists. A lease signed with someone who is not the certificate holder, or over unregistered land, is a document describing a right the counterparty may not be able to grant.

Comparison: Bali land certificate types at a glance

Title / document	Who can hold it	Term	Buyer relevance
SHM (Hak Milik)	Indonesian citizens only	Perpetual	The title you want underneath your lease — never in your own name
HGB (Hak Guna Bangunan)	Indonesian companies, incl. PT PMA	Up to 30 yrs, extendable/renewable (up to ~80 total)	The ownership route for foreign investors via a PT PMA
Hak Pakai	Foreigners with residence permits (and others)	Up to 30 yrs, extendable/renewable (up to ~80 total)	Direct personal title for qualifying resident foreigners
Hak Sewa (leasehold)	Anyone, incl. non-resident foreigners	As contracted, typically 25–30 yrs, extendable	The most common foreign structure; strength depends on the deed and underlying title
Girik / pipil / Letter C	— (not a registered title)	—	No longer valid standalone proof since Feb 2026; do not transact until certificated

How to verify a certificate before you commit

Verification is not something you do from a PDF the seller emails you. The steps that matter:

• Land office check. Your notary (PPAT) requests an official certificate check with BPN, confirming the certificate is genuine, current, and matches the registered holder and plot boundaries.
• Identity match. The person signing your lease or sale deed must be the registered holder — or hold a notarised power of attorney from them. Spousal consent is typically required where the land is marital property.
• Encumbrance check. Confirm there is no mortgage (hak tanggungan), seizure order, or ongoing dispute recorded against the certificate.
• Zoning (ITR) check. A genuine certificate on land zoned green or agricultural still cannot legally carry your villa. Title and zoning are separate questions; check both.
• Ownership chain. Review how the current holder acquired the land — inheritance splits and family land are common sources of later claims in Bali.

Budget for this properly. Due diligence through a reputable notary is a small fraction of the transaction cost — you can see how it fits into a total project budget with our villa cost calculator — and it is the one expense that reliably prevents six-figure losses.

How Teville fits in

Teville builds villas in Bali as a general contractor, and every plot we list has already passed certificate verification, zoning/ITR checks and an ownership-chain review — so the title questions in this guide are answered before you ever see the land. Browse our legally vetted plots or talk to us about checking a plot you have found yourself.

FAQ: Bali land certificates

Can a foreigner ever hold SHM freehold in Bali?

No. SHM is reserved for Indonesian citizens, with no legal exceptions for foreigners or foreign-owned companies. Arrangements that place SHM in a nominee's name on a foreigner's behalf are prohibited, and courts have repeatedly refused to protect the foreign party when they unwind. Foreigners hold property through leasehold, Hak Pakai with residency, or HGB via a PT PMA.

Is girik land ever safe to buy or lease?

Not in its uncertificated state. Since 2 February 2026, girik-type documents are no longer standalone proof of ownership under Government Regulation 18/2021 — they only support a registration application. The safe route is to require the owner to complete registration and obtain a proper certificate before you sign anything or pay anything beyond a refundable, escrowed reservation.

What certificate sits behind a typical Bali leasehold villa?

Usually SHM held by an Indonesian landowner. Your lease is a notarial contract against that title, typically for 25–30 years with extension options. Its safety depends on verifying the SHM at the land office, confirming the signer is the registered holder, and drafting extension, inheritance and transfer clauses properly in the deed.

What is the difference between HGB and Hak Pakai for a foreign buyer?

HGB is held through a foreign-owned company (PT PMA) and suits commercial villa operations; it carries company setup, capitalisation and tax obligations. Hak Pakai can be held personally by a foreigner with a residence permit for a qualifying home. Both run in stages up to around 80 years under current regulations. The right choice depends on residency, purpose and scale.