COVID-19 Pandemic: Relief on Registration and Extension of Land Titles Rights in Indonesia

In response to the current spreading of the coronavirus across the countries, the Ministry of Agrarian Affairs and Spatial Planning/National Land Agency or Kementerian Agraria dan Tata Ruang/Badan Pertanahan Nasional (“BPN”) has issued new provisions related to the land rights ownership. Such provisions provide an extended period on the registration and renewal of land titles and alteration on required documents amidst the COVID-19 emergency status in Indonesia.

Legal Frameworks: Our below executive summary refers to the following regulations:

  1. BPN Decree No. 88.1/SK-HR.01/IV/2020 on Extension of the Validity of Land Titles and the Registration for Granting, Extension, or Renewal Decrees of Land Titles that Have Expired or Will Expire during the Coronavirus Disease 2019 (COVID-19) Emergency Status Period (“BPN Decree 88/2020”).
  2. BPN Circular Letter No. 7/SE-100.HR.01/IV/2020 on Ease of Granting and Registration Services of Land Titles during the COVID-19 Emergency Status Period (“BPN Circular Letter 7/2020”).

Main Keys on the Relief on Registration and Extension of Land Titles Rights: We provide the following main keys on the relief on registration and extension of land titles rights amidst the COVID-19 pandemic.

Automatic Extension on the Land Title Rights: We note that BPN provides an automatic extension on the land titles that have expired or will expire on 31 March 2020, are automatically extended up to 31 December 2020, without the requirement of following any registration procedures as should be carried out by the land titles owners.

On the related note, the land title rights entitled to such relief are; (a) Cultivation Rights Title/Hak Guna Usaha (HGU), (b) Building Right Title/Hak Guna Bangunan (HGB), and (c) Right to Use/Hak Pakai (Point 5b (1) and (2) of BPN Circular Letter 7/2020).

The eligible land titles owners who wish to exercise their rights after 31 December 2020 should apply for an extension of land rights prior 31 December 2020, failure of such application will result in the expiration of the land titles (Point 5b (3) of BPN Circular Letter 7/2020).

Registration of Granting, Extension, or Renewal Decree of Land Title Rights (“Land Title Rights Decree”): We note that BPN also extends the registration period for granting, extension, or renewal Land Title Rights Decree of land titles that have expired or will expire on 31 March 2020 up to 31 December 2020.

In this respect, the land titles holders of Land Title Rights Decree should also perform registration before 31 December 2020, to avoid the Land Title Rights Decree being declared null and void. If the Land Title Rights Decree becomes null and void, the land titleholders will have to reapply for granting, extension, or renewal of the Land Title Rights Decree to BPN (Point 5c (2) of BPN Circular Letter 7/2020).

Alteration on Required Document for Registration of BPN Decree on Granting and/or Transfer of Right over Land Titles: We noted that to complete the registration process of BPN Decree on granting and/or transfer of right over land titles, the land titles owners are required to submit payment evidence of Duty on the Acquisition of Rights over Land and Building/Bea Perolehan Hak Atas Tanah dan Bangunan (“BPHTB”) or Income Tax/Pajak Penghasilan (“PPh”) which should be validated by the relevant tax offices (“Validation Procedure”).

However, until 31 December 2020, BPN will exempt the Validation Procedure to be altered by the following documents (Point 5d of BPN Circular Letter 7/2020):

  1. Evidence of payment of BPHTB and/or PPh; and
  2. Statement Letter of Absolute Liability signed over a duty stamp (Format of the letters is provided in the Appendix of BPN Circular Letter 7/2020).

The article above was prepared by Marshall S. Situmorang (Partner) and Aniendita Rahmawati (Associate). 

Disclaimer: The information herein is of general nature and should not be treated as legal advice, nor shall it be relied upon by any party for any circumstance. Specific legal advice should be sought by interested parties to address their particular circumstances. For more information, please contact us at mail@nusantaralegal.com.