Implementation of Housing and Residential Areas in the State Capital City of Nusantara

Discover the ins and outs of implementing housing and residential areas in the State Capital City of Nusantara. Our article covers the three zoning categories for residential designation, harmonized housing development, and fulfilling obligations with construction or pay conversion funds.

The Capital City of the Nusantara (“IKN”) is the new capital city of Indonesia which was formed based on Law No. 3 of 2022 on the State Capital. In the context of accelerating the construction and development of IKN, on 6 March 2023, the government issued Government Regulation No. 12 of 2023 on the Granting of Business Licensing, Ease of Doing Business, and Investment Facilities for Business Actors in the Capital City of the Nusantara (“GR 12/2023”). Within the scope of regulating ease of doing business, GR 12/2023 regulates housing and residential areas in the IKN area.

Residential Designation in IKN

There are three zoning categories for residential designation in IKN, namely:

1. simple housing (public house);
2. medium housing; and
3. luxury housing.

The foreigners are prohibited from buying, owning, and/or controlling simple housing, regardless of whether they receive government-assisted financing or not.


Harmonized Housing Development

Business actors can apply to the Head of IKN Authority to carry out their obligation of constructing harmonized housing in other areas in the IKN area or pay the conversion funds as the fulfillment of harmonized housing.

Upon that request, the Head of the IKN Authority will coordinate with the Minister of Public Works and Public Housing (“Minister of PUPR”) and the Minister of Home Affairs. If the request is approved, the Head of the IKN Authority will submit annual reports to the Minister of PUPR and the Minister of Home Affairs.