PP 40/1996, revoked: the old HGB and hak pakai rules next to PP 18/2021

Revoked in 2021, still quoted in leases and on the web. The old numbers, the new ones, and where each is written.

Written from the Indonesian originals · Editor-reviewed · Law as read on 2026-10-09

By the balipropertyguide.com editorial team · Published 2026-10-09 · Last reviewed 2026-10-09 · 6 min read

2 primary sources cited on this page. How we check what is on this site

PP 40/1996, revoked: what changed, article by article

For a quarter of a century PP 40/1996 was the regulation on HGB and hak pakai. It was revoked (PP 18/2021 art. 103(a)) in 2021, but its numbers live on — in leases drafted around a 25-year hak pakai, in certificates issued under it, and in web pages that were never updated. This is the old rule next to the current one.

Point	PP 40/1996 (revoked)	PP 18/2021 (in force)
HGB over State land: term	at most 30 years, extendable by at most 20, then renewable (PP 40/1996 art. 25(1)-(2))	30 years, extendable by 20 years, renewable by 30 years (PP 18/2021 art. 37(1))
HGB over hak milik	at most 30 years; renewable by a new grant deed by agreement with the owner (PP 40/1996 art. 29)	at most 30 years, renewable only by a new grant deed (PP 18/2021 art. 37(2))
Hak pakai over State land: term	at most 25 years, extendable by at most 20, then renewable (PP 40/1996 art. 45(1)-(2))	30 years, extendable by 20 years, renewable by 30 years (PP 18/2021 art. 52(1))
Hak pakai over hak milik	at most 25 years and not extendable; renewable by a new grant deed by agreement with the owner (PP 40/1996 art. 49)	at most 30 years, renewable only by a new grant deed (PP 18/2021 art. 52(3))
When to apply to extend	no later than two years before the term or extension ends (PP 40/1996 arts. 27(1), 47(1))	once the land is used for the purpose of the grant, and at the latest before the term ends (PP 18/2021 art. 41(1))
When to apply to renew	no later than two years before the term or extension ends (PP 40/1996 arts. 27(1), 47(1))	at most 2 years after the term ends (PP 18/2021 art. 41(2))

The term: 25 became 30

The most-quoted number from the old regulation is the 25-year hak pakai: at most 25 years, extendable by at most 20, then renewable (PP 40/1996 art. 45(1)-(2)). Under the current rules hak pakai with a term runs 30 years + 20 years + 30 years (PP 18/2021 art. 52(1)). Hak pakai over someone’s hak milik moved from at most 25 years and not extendable; renewable by a new grant deed by agreement with the owner (PP 40/1996 art. 49) to at most 30 years, renewable only by a new grant deed (PP 18/2021 art. 52(3)). HGB kept its 30-year first term; what changed is that the cycle is written as one: 30 years + 20 years + 30 years (PP 18/2021 art. 37(1)). Hak pakai explained. HGB explained.

When to apply: the two-year rule turned around

PP 40/1996 required an application no later than two years before the term or extension ends (PP 40/1996 arts. 27(1), 47(1)). PP 18/2021 lets an HGB holder apply to extend once the land is used for the purpose of the grant, and at the latest before the term ends (PP 18/2021 art. 41(1)), and to renew at most 2 years after the term ends (PP 18/2021 art. 41(2)); hak pakai the same, once the land is used for the purpose of the grant, and at the latest before the term ends; renewal at most 2 years after (PP 18/2021 art. 56(1)-(2)). A lease or loan document that still says “two years before expiry” is quoting the revoked rule.

Who may hold, and the conditions to extend

Point	PP 40/1996	PP 18/2021
Who may hold HGB	Indonesian citizens and legal entities established under Indonesian law and domiciled in Indonesia (PP 40/1996 art. 19)	Indonesian citizens and legal entities established under Indonesian law and domiciled in Indonesia (PP 18/2021 art. 34)
Who may hold hak pakai	Indonesian citizens, Indonesian legal entities, government bodies, religious and social bodies, foreigners domiciled in Indonesia, foreign legal entities with a representative office, and foreign missions (PP 40/1996 art. 39)	Indonesian citizens, Indonesian legal entities, foreign legal entities with a representative office, religious and social bodies, and foreigners (PP 18/2021 art. 49(2))
Holder stops qualifying	one year to release or transfer the right, after which it ends by law (PP 40/1996 arts. 20, 40)	one year to release or transfer the right, after which it ends by law (PP 18/2021 art. 35)
Conditions to extend hak pakai on State land	the land is still used well, the grant conditions are met, and the holder still qualifies (PP 40/1996 art. 46(1))	the land is still used well, the grant conditions are met, the holder still qualifies, the land fits the spatial plan, and it is not used or planned for the public interest (PP 18/2021 art. 55(1))

Two changes stand out for a foreign buyer. The hak pakai list in PP 40/1996 named “foreigners domiciled in Indonesia”; PP 18/2021 art. 49(2) lists foreigners without that qualifier. And extension now carries a condition the old hak pakai rule lacked: that the land is not used or planned for the public interest (PP 18/2021 art. 55(1)). Land acquisition procedure.

What the holder must do

The old regulation’s duties for a hak pakai holder were to pay the grant fee set in the decision or agreement, use the land for its purpose, maintain the land and buildings and the environment, hand the land back when the right ends, and surrender the certificate (PP 40/1996 art. 50). PP 18/2021 is stricter on use: an HGB holder must build on or use the land as the grant decision requires within 2 years of the grant (PP 18/2021 art. 42(a)), and must also keep the conservation function of water-body setbacks, and comply with the spatial plan (PP 18/2021 art. 42(c)-(d)) — for a Bali plot beside a river, the setback is now a duty of the right itself. On our reading, a plot bought under an old HGB and left empty is the case the two-year duty is aimed at. Abandoned land.

Over HPL land, the old rule already gave the managing body a say: extension or renewal came on the holder's application after the HPL holder's approval (HGB) or on the HPL holder's proposal (hak pakai) (PP 40/1996 arts. 26(2), 46(2)). That survives in PP 18/2021. Hak pengelolaan (HPL).

Rights granted under the old regulation

Rights granted before PP 18/2021 remain valid (PP 18/2021 art. 101(1)); applications complete but undecided were finished under PP 18/2021 (PP 18/2021 art. 101(2)); and the implementing rules made under PP 40/1996 stay in force so far as they do not conflict with PP 18/2021 (PP 18/2021 art. 102(a)). PP 40/1996 itself dated from 17 June 1996 (PP 40/1996, signature block). PP 18/2021, chapter by chapter.

This is commentary on the official texts, not legal advice. Check the certificate for the dates of your own right.

Questions on this page

Is PP 40/1996 still in force?

No. PP 18/2021 art. 103(a) revoked it. Rights granted under it remain valid (art. 101(1)), and its implementing regulations stay in force so far as they do not conflict with PP 18/2021 (art. 102(a)).

Is hak pakai still 25 years?

No. Under PP 40/1996 art. 45(1) hak pakai over State land was granted for at most 25 years, extendable by 20. Under PP 18/2021 art. 52(1) it is 30 years, extendable by 20 and renewable by 30.

Do I still have to apply two years before my HGB expires?

That was PP 40/1996 art. 27(1). Under PP 18/2021 art. 41(1) an extension may be applied for once the land is used for the purpose of the grant and at the latest before the term ends; a renewal at most 2 years after it ends (41(2)).

My hak pakai certificate was issued in 2010. Which rules apply?

The right itself remains valid (PP 18/2021 art. 101(1)). Extension and renewal applied for now follow PP 18/2021, including its conditions in art. 55(1). Our reading; the transitional article does not spell out the term of an extension of an old grant.

Sources cited on this page

Every rule above was read in the Indonesian original on 20 September 2026, not from an English summary. How we check this.