Incentives to Property Developers in IKN – President Joko Widodo’s tenure in Indonesia is approaching its end, but he remains focused on accelerating one of his major projects: the development of the Nusantara Capital City (IKN). Recently, he introduced new regulations to benefit entrepreneurs and property developers involved in IKN. This decision is outlined in Government Regulation No. 29 of 2024, a revision of Regulation No. 12 of 2023.

This new regulation aims to speed up the development of the Nusantara Capital City and ensure that the project aligns with sustainability and social welfare goals.

The Indonesian government has already provided substantial incentives, ease of access, and support to accelerate the development of the new capital. Previously, President Widodo granted long-term land use rights (HGU) to investors in Nusantara, extending up to 190 years. Now, new incentives have been introduced.

Read also: Jokowi Officially Grants Land Use Rights (HGU) in IKN for Investors, Up to 190 Years!

What Is Balanced Housing?

Balanced housing is a development concept that goes beyond just providing residences. It includes essential facilities and infrastructure that enhance the quality of life for its residents.

This concept encompasses affordable housing, green open spaces, public amenities, and good accessibility. The goal is to create a harmonious and well-rounded environment where every aspect of community life is considered holistically.

Incentives to Property Developers in IKN

Government Regulation No. 29 of 2024 offers various incentives for developers who meet the balanced housing requirements in IKN. These incentives are designed to attract more developers and investors by easing licensing processes, providing investment facilities, and offering tax breaks and fee reductions. The intention is to encourage active private sector participation in the IKN development project.

The regulation, which was enacted on August 12, 2024, is detailed in Government Regulation (PP) No. 29/2024, which amends PP No. 12/2023 concerning Business Licensing, Business Facilities, and Investment Facilities for Entrepreneurs in the Nusantara Capital City.

According to the general explanation of the regulation, “Incentives for entrepreneurs who fulfill balanced housing obligations in Nusantara Capital City” were introduced on Thursday, August 15, 2024.

Changes to Article 25 specify that entrepreneurs wishing to develop residential areas for IKN residents, but who have not yet met balanced housing requirements elsewhere, may fulfill these requirements within IKN by adhering to detailed plans and spatial arrangements. This adjustment is intended to expedite residential development in IKN.

Developers must apply to the Head of the Authority for approval. They have the option to either build balanced housing in IKN or pay a conversion fee for fulfilling balanced housing requirements.

The Head of the Authority will set the priorities for balanced housing requirements based on residential development needs and report to the minister responsible for housing and internal affairs.

8 Incentives for Property Developers in IKN

Developers working on residential areas will receive several incentives, including:

• Assistance with housing development programs
• Tax reductions for simple homes as per legal regulations
• Support for infrastructure, facilities, and public utilities
• Easier access to land for housing development
• Accessibility support for balanced housing areas within the Nusantara Capital City
• Exemption from BPHTB (Land and Building Acquisition Duty)
• Reduction in Property Taxes (PBB) for a certain period
• Recognition for balanced housing achievements

Article 8 specifies that BPHTB exemptions and PBB reductions will be provided for a defined period.

These exemptions and reductions will be proposed directly by the Head of the Nusantara Capital City Authority (OIKN) to be approved by the regents of Penajam Paser Utara or Kutai Kartanegara until the Special Capital City Government Authority is established.

This decision benefits not only developers but also the broader community. The introduction of balanced housing aims to enhance the quality of life for IKN residents. Adequate public facilities, green spaces, and affordable housing are all part of the effort to create a better and more balanced community.

Government Regulation No. 29 of 2024 is a crucial step in the development of Nusantara Capital City. By offering incentives for developers who meet balanced housing requirements, the government strives to ensure that the new capital project aligns with principles of sustainability and social welfare. This effort is part of a larger vision to create a capital city that meets current needs while being resilient and adaptable for the future.

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