Every time you make a transaction, you will definitely get proof to show that the transaction is valid. Likewise, if you buy land, a house or an apartment, you will definitely be given documents showing that you are the legal owner. This document is called a Certificate of Ownership Rights (SHM).
For example, if you want to be recognized as the legal owner of land, you must have several documents. Examples of property rights certificates, use right certificates, and sale and purchase deeds. Likewise with the house ownership certificate which occupies the highest level of document regarding the house. Below we will discuss further about what SHM is and the differences between SHM and HGB.
Definition of Ownership Certificate (SHM)
A Certificate of Ownership Rights (SHM) is an official document issued by the National Land Agency (BPN) in Indonesia which states that a person or legal entity has full rights to a plot of land or property. This certificate functions as proof of legal ownership and gives the owner the strongest and fullest rights, including the right to use, control and utilize the land.
Characteristics of a Certificate of Ownership
Some of the distinctive characteristics of a Certificate of Ownership include:
Strongest Ownership Rights
SHM provides the highest ownership rights compared to other types of land certificates, such as Building Use Rights (HGB) or Use Rights. This means the SHM owner has full control over the land.
No Time Limit
The Certificate of Ownership does not have a time limit for ownership. As long as the land owner complies with applicable laws and regulations, this ownership is permanent and can be maintained for life.
Can be Inherited
SHM can be passed on to the owner's heirs and land ownership can be continued by the next generation.
Valid Proof of Legality
This certificate is legally recognized and can be used as evidence in court or other legal institutions to claim rights to land or protect ownership from third party claims.
Components of a Certificate of Ownership
In the SHM there is important information regarding land ownership. The following are general details that are usually contained in a Certificate of Ownership:
Certificate Head
Contains the name and logo of the institution that issued the certificate, namely the National Land Agency (BPN) of the Republic of Indonesia. There is also a serial number or certificate identification code for recording and archiving purposes.
Title Number and Certificate Number
The rights number is a number that indicates the type of land right. Meanwhile, the certificate number is a unique number given for specific identification of the certificate.
Owner Data
Contains the full name of the land owner or legal entity registered as the certificate holder. There are also identity numbers (such as NIK for individuals or legal entity identity numbers).
Soil Data
Land location: The complete address or geographic location of the land listed in the certificate.
Land area: The size of the land area in square meters (m²).
Land boundaries: An explanation of the boundaries of the land owned, which is often accompanied by a map or sketch of the location showing the location of the land and its neighbors.
Soil Description
Includes land type or land use (e.g., agricultural, residential, commercial). There is also special information relevant to the land, such as whether there are buildings or other facilities on it.
Field Identification Number (NIB)
NIB is a number used to uniquely identify land parcels in the land administration system.
Authentication Data
Contains the name of the official who issued the certificate, date of issuance of the certificate, signature and official stamp from the National Land Agency (BPN).
Loading Notes
This section contains information regarding the existence of encumbrances, mortgages, or other legal burdens related to the land, if any. There are also records related to the transfer of rights, changes in ownership data, or the addition of new rights.
Land Plot Map
Some certificates include a map or sketch that shows the location and boundaries of the land more visually, to give a clearer picture of the position and size of the land
Blank Page for Further Notes
This page is used to record changes or updates that may occur in the future, such as transfer of rights, merging or splitting land parcels, or changes in owner data.
Function of Ownership Certificate (SHM)
Ownership Rights Certificates (SHM) have a very important function in the context of land and property ownership in Indonesia. The following are some of the main functions of a Certificate of Ownership:
Valid Proof of Ownership
SHM functions as legal and formal proof that a person or legal entity is the legal owner of certain land or property. This provides legal force in claims of ownership against other parties who may try to claim the land.
Protection of Rights
By having SHM, the land owner gets security over his rights to the land. This includes the right to use, control, utilize, sell, transfer or bequeath land to others. SHM protects the owner from third party claims or land disputes that may arise, because this certificate is a legally recognized document.
Basis for Property Transactions
SHM is required in various property transactions, such as selling, purchasing or transferring land rights. This ensures that the transaction is valid and recognized by law. SHM is also used as the main requirement in the mortgage or loan process at financial institutions, where this certificate is used as collateral or collateral.
Simplifies the Administration Process
Having SHM makes land administration processes easier, such as land registration, updating ownership data, or splitting and merging land plots. This certificate is also used in processing permits related to land use, such as building construction permits (IMB).
Determinants of Property Value
SHM functions as a determinant of property value. Land that has an Ownership Certificate generally has a higher value in the market compared to land that only has other types of certificates, such as Building Use Rights (HGB) or Use Rights. SHM increases buyers or investors' confidence in the security of their investment, so that land with SHM is easier to sell or mortgage.
Legal Documents in Legal Proceedings
SHM can be used as valid evidence in court in cases of land disputes or other legal issues related to land ownership. The presence of SHM strengthens the owner's legal position in litigation or land-related disputes.
Supports Social and Economic Well-being
By having SHM, land owners have a guarantee of economic security, because they can use the land for economic purposes, such as building a house, farming or business. SHM also provides a sense of security and stability for land owners, which can improve social welfare and quality of life.
Requirements for Making a Certificate of Ownership (SHM)
To make an ownership certificate for land or buildings that have not been certified, you need to follow the procedures and fulfill the requirements set by the National Land Agency (BPN) in Indonesia. documents that must be fulfilled.
- Photocopy of KTP and KK
- Application letter for making a certificate submitted to the Head of the local Land Office
- A statement letter from the applicant that the land is not in dispute
- Proof of land ownership
- Land certificate
- Deed of sale and purchase or gift
Meanwhile, to make SHM both for heirs and for buying and selling purposes, there are several requirements and steps that need to be fulfilled. The following are the general requirements that must be met for each need:
SHM for Heirs
If the ownership certificate must be transferred to heirs, the following conditions are generally required.
- Death certificate
- Inheritance certificate
- KTP and KK
- Original SHM
- Proof of payment of Land and Building Tax (PBB)
SHM for Buying and Selling
If SHM is transferred through a sale and purchase process, the following are the conditions.
- Seller and buyer ID cards
- K.K
- Sale and Purchase Deed (AJB)
- Original SHM
- Proof of payment of Land and Building Tax (PBB)
- PBB SPPT and proof of income tax payment
- NPWP
- Dispute free certificate
Procedure for Making a Certificate of Ownership (SHM)
The procedure for making a Certificate of Ownership (SHM) involves several important stages that must be carried out to ensure that the land or property owned is legally recognized. The following are the steps that must usually be taken to make an Ownership Certificate in Indonesia:
Submit an Application to the BPN Office
Once all the documents are ready, the next step is to submit an application for SHM to the local National Land Agency (BPN) office. The steps in this stage include:
- Fill out the application form for making SHM at the BPN office
- Attach all the required documents that have been prepared
- Pay administration fees according to the applicable provisions at BPN
Land Measurement by BPN Officers
After the application is submitted, BPN will arrange a land measurement schedule. Measurements are carried out by BPN officers to ensure the area and boundaries of the land are as stated in the document. This stage involves:
- BPN officers carry out land measurements and determine the boundaries
- The applicant or representative must be present during the measurement process to help indicate land boundaries
- If the land borders a neighbor's property, the neighbor is also invited to confirm the agreed boundaries.
Announcement at the Sub-district/District Office
After the measurements are complete, there will be an announcement for around 60 days at the sub-district or sub-district office to ensure that no other party claims the land. If there is a claim, the process will be postponed until the problem is resolved.
SHM Publishing
If there are no claims or problems during the announcement period, the next process is the issuance of a certificate by BPN. Final steps include:
- Final validation and verification by BPN
- Issuance of a certificate of ownership in the name of the applicant
- Applicants can collect the certificate at the BPN office after being notified
Costs Involved
The cost of making a SHM can vary depending on the land area and location. This fee includes:
- Measurement costs
- Registration fee
- Certificate issuance costs
- Tax fees (if any)
Management Time
The time required to process the SHM can take anywhere from several months to a year, depending on the completeness of the documents and the efficiency of the process at BPN.
Difference Between SHM and HGB
Ownership Rights Certificates (SHM) and Building Use Rights (HGB) are two types of certificates that regulate land ownership in Indonesia. Although both provide the right to use land, there are fundamental differences between the two. The following is an explanation of the differences between SHM and HGB:
Time Period
SHM: has no time limit. SHM holders have permanent rights to the land and can pass it on to their heirs.
HGB: Has a specified time limit, namely a maximum of 30 years, with the possibility of an extension of another 20 years. After the validity period and extension expire, the HGB holder must renew his rights or return the land to the land owner.
Ownership
SHM: Can only be owned by Indonesian citizens (WNI). This means that land certified as SHM cannot be owned by foreign citizens.
HGB: Can be owned by Indonesian citizens, foreign citizens, or legal entities. Due to the temporary nature of HGB, it is more commonly used by foreign companies and entities to construct buildings in Indonesia.
Transfer of Rights
SHM: Can be transferred (sold, inherited, or gifted) freely and without restrictions to other parties as long as that party meets the requirements as the owner of SHM (for example, must be an Indonesian citizen).
HGB: Can be transferred to other parties, including foreign citizens, as long as the HGB is still valid. However, the new holder must extend or renew the building use rights according to the provisions.
Land Use
SHM: Land with SHM can be used for any purpose as long as it does not conflict with statutory regulations, such as for residence, plantation or business.
HGB: Usually used for commercial or industrial purposes, such as the construction of office buildings, apartments, or other commercial facilities.
Obligations and Payments
SHM: SHM owners have the obligation to pay Land and Building Tax (PBB) every year, and administration fees if changes or extensions are made.
HGB: HGB holders also have to pay PBB, and there are additional fees for extending or renewing the HGB after the validity period expires.
Legal Value and Status
SHM: Because it is permanent and indicates full ownership, SHM usually has a higher value on the market. SHM is considered legally stronger than HGB.
HGB: The value of property with HGB tends to be lower than with SHM because it is temporary and needs to be extended. HGB is considered a use right, not a full ownership right.
If you have a certificate of ownership, then there is no need to doubt the proof of ownership. Of course you will avoid problems such as disputes that might occur in the future. Therefore, it is important to have SHM as an important document regarding land and property ownership.
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This is complete information regarding ownership certificates. BFI Finance, as a financing company that provides financing with house certificate guarantees, accepts house certificate guarantees in the form of ownership certificates. Apply for a cash loan guaranteed by a house certificate for all your needs and enjoy high disbursement and competitive interest rates. #SelaluAdaJalan with BFI Finance.
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