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Property developers need legal certainty more than IMB abolishment
The government is considering revoking dozens of permits deemed to hamper investment, including those related to the property sector
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Apartment towers fill Jakarta's skyline. The government is considering abolishing building permits (IMB) to facilitate investment in the property sector. (tempo.co/Tony Hartawan)
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government plan to annul the requirement to obtain a building permit (IMB) for houses and other property has received little support from stakeholders, including property consultants and property companies.
They fear that if IMBs were no longer required, building construction could violate spatial planning regulations in urban areas.
Cushman and Wakefield Indonesia associate director for investment Andi Loe said in Jakarta on Tuesday that the requirement to obtain an IMB did not hamper investment in the property sector.
“The IMB is not a stumbling block in the property business if licensing procedure is followed properly and does not take too long, ” Andi told The Jakarta Post in response to the government’s plan to do away with IMBs.
He said the problem was not in the IMB itself, but in the long and complicated process in obtaining a license.
Economic Coordinating Minister Darmin Nasution said early this month that the government was considering revoking dozens of permit requirements that were deemed to hamper investment in the country. The IMB is among the licenses to be abolished because the long process to obtain one has led to delays in construction projects.
“However, if the government wants to simplify IMB licensing, it could be better to cancel the principle permit, the location permit and the IPPT [land use permit],” Andi said, adding that the three permits would no longer be useful as IMB was the most relevant technical permit for a building.
“The IMB is, in fact, a spatial control instrument in spatial use and spatial alignment, the authority of which lies with the regional government as a supervisory function before construction is started,” he added.
Agrarian and Spatial Planning Minister Sofyan Djalil announced that the ministry would reduce and abolish permits deemed to hamper investment in the property sector, such as the IMB.
Sofyan said the IMB permit would no be longer needed because such permits were often violated and misused. "A permit was, for example, issued for the construction of a house on a 400-square-meter plot of land, but the holder of the permit instead built a house on a 800-square-meter plot,” he said on Wednesday.
He said there would be another mechanism to ensure that the construction of a building did not violate spatial planning.
Separately, Indonesian Chamber of Commerce and Industry (Kadin) deputy chairman for construction and infrastructure Erwin Aksa told the Post on Tuesday that industry players would support the government’s plan to abolish regulations deemed to hamper to investment, but urged the government to reconsider the idea of abolishing the IMB.
“The IMB is a requirement to construct a building and therefore involves technical analyses, such as on a building's strength and security aspect. There must be a policy in which the government evaluates the planning process before a building is constructed,” said Erwin.
Erwin said the most important thing for the government do is finish the Detailed Spatial Plan (RDTR) to provide legal certainty for businesspeople. “For businesspeople, the most important thing is certainty in land allotment so that we can build or invest as we would first need legal certainty from the spatial plan itself,” he said.
Meanwhile, Indonesian Association Builders (Gapensi) central executive board deputy chairman Didi Aulia opposed the government plan to abolish the IMB, arguing that the permit was important in managing urban planning so that land is not destroyed. “I do not agree with the government’s plan because the IMB involves spatial and technical analyses,” he said in Jakarta on Tuesday.
He urged the government to build more public facilities, particularly transportation systems, to boost the property sector through supporting infrastructure.
Andi and Erwin said rather than abolish the IMB, the government should ensure legal certainty in the allocation of land for industrial and commercial purposes as well as that related to the issuance of land titles. (awa)
