Do you know what SHM is and how it is different from SHGB?

When you own a property or a certain piece of land, of course you must have proof of ownership. One of the proofs of property ownership recognized by the state is SHM or Certificate of Ownership.

By having this certificate, you are considered to have full rights to the land and the buildings located on it. To be able to minimize the occurrence of disputes in the future.

Therefore, it is important that you know more about Property Certificates and how they differ from SHGBs. Check out the following article!

What is SHM?

The Ownership Certificate or SHM is proof of full ownership of the land or the land along with the buildings on it without any specific time limit.

This certificate of ownership is an authentic document that has a strong law on the ownership of a land and building. This is important for those of you who are buying a home, whether the home already has a Title Certificate or not.

A person who already has a SHM is considered to have full power over all the land and buildings on it. This certificate can of course be inherited by anyone without a certain time limit. This is one of the advantages of having a Certificate of Ownership.

Also read: Understanding the Definition and How to Calculate a Home Sales Tax

Requirements to get SHM

If you want to create a Certificate of Ownership, there are several requirements you must meet. Of course, the most absolute requirement that must be met is an Indonesian citizen (WNI).

Here are some other administrative requirements that must be met:

1. Identity such as KTP and Family Card (KK)
2. Original HGB certificate
3. Photocopy of the IMB (Construction License)
4. Letter of information declaration for the owner of the land
5. Declaration of Tax Payable of Land and Building Tax or SPPT of Land and Building Tax for the current year

In addition, there are several other requirements if you want to apply for a Certificate of Ownership for inherited land. Here are some documents you need to complete:

1. Deed of sale and purchase (AJB)
2. Certificate from the place of the country of the land
3. Earth History Certificate
4. Certificate of No Dispute

How do you manage SHM?

Of course, when you want to have a Certificate of Ownership on a certain land, you have to take care of going through some necessary administrative procedures. Below are the procedures that you have to do in the management of SHM:

Preparation of Documents

First, you must prepare some of the required documents as mentioned above, namely SHGB, KTP, KK, SPPT PBB, and other documents. You must complete all these documents so that the future management of the certificate will be easier.

Meanwhile, if you want to take care of a Property Certificate originating from an inheritance, there are several additional documents that must be completed. These documents are photocopies of KK and KTP, deed of sale and purchase of land, Certificate of No Dispute, and many other documents.

Visit the BPN Office

After the required documents are ready, the next step is to visit the BPN office or the National Land Agency.

You need to purchase a registration form and send the necessary documents. After that, you need to make an appointment with the BPN officer regarding the measurement of the land you own.

SHM edition

When you have done these two things, the next step is the issuance of a Certificate of Ownership. After the land surface has been measured by the official, you will then receive a Land Survey Letter as a complementary document from the previous document.

Then BPN will issue a decision letter and a certificate issued within 6 months later. You will be charged a Land Rights Acquisition Fee.

What is the difference with SHGB?

SHGB or Building Use Rights Certificate is one of many types of certificates that are valid in the eyes of Indonesian law. The owner of the SHGB has the right to build and construct buildings on land that does not belong to the owner.

The land in question is a land of the state, individuals, or certain legal entities. Therefore, SHGB has a term of ownership which is 30 years and can be extended up to 20 years.

This is why HGB owners want to upgrade the certificate to a Certificate of Ownership (SHM).

To know more details about the difference between a Certificate of Ownership and a Certificate of Hak Guna Bangunan in general, see the table below:

Freehold Title	Certificate of use rights of the building
No time	It must be extended over a certain period
Have full power over land and buildings	Full power on groundless construction
It can be used as collateral	It has the risk of being a burden for the mortgage
Recommended for long term investment	Recommended for medium and short term investment

Also read: Check these 5 important documents when buying a house

Advantages and disadvantages of SHM and SHGB

Both Ownership Certificates and Building Use Rights Certificates certainly have their advantages and disadvantages. This can be seen from many perspectives depending on your individual needs.

Here are the advantages and disadvantages of a Certificate of Ownership:

Advantages of SHM	The disadvantages of SHM
The selling price is quite high	The purchase price is quite expensive
Easier to sell	Harder to find
Valid indefinitely	It can be canceled by certain circumstances
It can be passed down from generation to generation	It can be canceled if abandoned

Meanwhile, here are some of the advantages and disadvantages of the Building Use Rights Certificate:

Advantages of SHGB	Disadvantages of SHGB
It doesn’t cost much	Limited time period
It is easier to get business opportunities	Impossible to make changes to the building
Benefit for foreigners	Easy to transfer

Thus a brief explanation of the Certificate of Ownership and the difference with the Certificate of Use Rights of the Building. I hope this information can be useful.

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