NEW PROCEDURE FOR THE TRANSFER OF A RIGHT TO BUILD TITLE

In order to make investment easier, on 22 February 2016, the Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency issued Regulation No. 8 of 2016 on the Procedure for the Transfer of Certain Right to Build Titles (“HGB”) in Certain Areas (“Head of BPN Regulation 8/2016”). The main purpose of Head of BPN Regulation 8/2016 is to expedite land services in Indonesia.

Head of BPN Regulation 8/2016 provides the procedure for the transfer of HGB in the following areas:

a.   DKI Jakarta;
b.   Bandung;
c.   Semarang;
d.   Yogyakarta; and
e.   Surabaya.

The transfer of certain HGBs means that a HGB can be transferred to a local/domestic limited liability company for an area of land of up to 5,000 sqm (five thousand square meters). Under this regulation, transferring a HGB includes the following:

a.   checking the HGB certificate;
b.   paying the Transfer Duty for the Acquisition of Rights over Land and Buildings and Income Tax;
c.   entering into a sale and purchase deed;
d.   registering the transfer of the land right; and
e.   paying the land and building tax.

According to Head of BPN Regulation 8/2016, checking the certificate should take one day and the transfer of rights should only take two days. Head of BPN Regulation 8/2016 came into effect on 2 March 2016. However, all applications submitted before Head of BPN Regulation 8/2016 was issued will now be processed under Head of BPN Regulation 8/2016.