Three Ministers Joint Decree, cuts costs of building low-income housing

This article has been translated by PwC Indonesia as part of our Indonesia Infrastructure News Service. PwC Indonesia has not checked the accuracy of, and accepts no responsibility for the content.

Investor Daily - SKB tiga Menteri, pangkas biaya pembangunan rumah MBR

28 November 2024

Jakarta, ID – To address the housing shortage and alleviate poverty, the Public Works (PU) Ministry is dedicated to consistently supporting the construction programme that aims to build three million homes across various regions, including cities, villages, and coastal areas.

PU Minister Dody Hanggodo stated that the PU Ministry will aid in developing basic infrastructure, including road access, raw and clean water treatment, wastewater management, waste processing, and environmental drainage. Presidential instructions regarding clean water and wastewater have also been suggested as priorities to support the programme for building three million homes.

“We hope that, although the houses are affordable, they are not cheaply built. Even though they are intended for low-income citizens, the quality of construction and basic infrastructure should be maintained to a humane standard,” Dody stated during a dissemination event on the policy for providing three million houses, held at the Home Affairs Ministry Office in Jakarta on Wednesday (27/11/2024).

On this occasion, a joint decree (SKB) involving three ministers—PU Minister Dody Hanggodo, Home Affairs Minister Tito Karnavian and Housing and Settlements Minister Maruarar Sirait—was signed to expedite the implementation of the three million houses construction programme.

With the SKB, regional leaders are encouraged to exempt land and building acquisition fees (BPHTB) for low-income citizens, speed up the process of granting building permits (PBG) for low-income citizens to within 10 working days, and establish regional regulations on the exemption of PBG fees by the following month.

“If the BPHTB is waived, the cost of a type 36 house will be reduced by approximately Rp6.25 million. With the waiver for PBG fees, the cost will be further decreased by Rp4.32 million. In total, the cost of a type 36 house can be reduced by around Rp10.57 million. This is where the people benefit,” stated Home Affairs Minister Tito.

Housing and Settlements Minister Maruarar Sirait expressed his gratitude to all parties that have supported the three million houses construction programme. He noted that this programme is a collaborative effort that must be carried out collectively, not just by the Housing and Settlements Ministry.

"We do not feel alone, particularly with the PU [Ministry] as our parent organisation. Thank you to the Home Affairs Ministry and the regional leaders who have permitted their regional funds to be used to support the acceleration of this programme," he stated.

The waiver of BPHTB and PBG fees for low-income citizens is a groundbreaking policy from the Prabowo-Gibran administration that supports the people. "It represents a shared commitment that is truly pro-people," stated Maruarar, who is commonly known as Ara.

He explained that the policy to waive BPHTB and PBG fees can lower the cost of houses, making them more affordable for people looking to purchase their first home.

"This policy is not intended for high-income or middle-income citizens, but specifically for low-income citizens. It is entirely a pro-people policy, in line with the directive from the Indonesian President and Vice President," Ara added.

Next Article: Boosting logistics performance

Previous