SHM
Also called: sertifikat hak milik
A certificate of full ownership of land, the strongest type of certificate.
What it means
SHM, or the certificate of ownership right, is a type of certificate with full ownership rights over land. This right can only be held by Indonesian citizens and has no time limit. The SHM holder is free to use, sell, or pass on the land. Because it is the strongest in nature, SHM is the most favored by banks as collateral.
Why it matters for families
Houses with SHM are generally easier to finance with a mortgage and their value is more stable. Families buying property with SHM status have long-term certainty of ownership. Conversely, misreading the status of rights can cause a mortgage application to be rejected. Make sure the type of right on the certificate matches what the seller promised.
Example
For example, two houses stand side by side, one with an SHM certificate and one still in the form of a land certificate letter. Banks usually only want to finance the SHM one. This difference in financing ease can affect the selling price on the market.
Common misunderstanding
Some people equate SHM with all types of certificates. In fact, ownership right differs from building use right, which has a time limit.