Constitutional Court Adjusts Land Rights Provisions For New Capital
On November 13, 2025, the Constitutional Court (in Indonesian, Mahkamah Konstitusi or “MK”) rendered its Decision No. 185/PUU-XXII/2024 (the “Decision”) in relation to the judicial review on Articles 14 and 16A (1), (2), and (3) of Law No. 3 of 2022 on Capital City as lastly amended by Law No. 21 of 2023 (the “Law”). This Decision affects the previously permitted long-term land tenure arrangements, which had allowed cumulative rights extending up to 190 years.
Under the Decision, MK decides that the previous provision allowing consecutive cycles (totaling 190 years) for land-use rights in Ibu Kota Nusantara (“IKN”) is unconstitutional. MK reinterprets the Law in this regard as follows:
- For a right to cultivate (Hak Guna Usaha), the maximum total period under one cycle is reduced to 95 years; and
- For a right to use building (Hak Guna Bangunan or a “HGB”) or right to manage (Hak Pengelolaan), the maximum durations are also scaled back — for an HGB: an initial grant of 30 years, extension 20 years, and renewal 30 years under evaluation.
General Elucidation of the Law, MK notes that one of the primary aims of the amendment to Law No. 21 of 2023 was to introduce a more competitive regime for land-rights duration. MK indicates that the previous stipulation tends to weaken the State’s position in exercising control over land rights as envisioned under the Constitution, as stated by one of the Justices, who emphasized that an excessively long accumulation of right—reaching up to 190 years—effectively diminishes the State’s ability to reassess, adjust, or reassert its authority over land for the benefit of the public.
While certain investment-related incentives will require adjustment to reflect the Decision, government officials have indicated their commitment to ensuring that existing and prospective investors continue to receive clear guidance and facilitative policies within the revised legal framework.
As a result of the Decision, investors that have entered into land utilization agreements with the Nusantara Capital Authority (Otorita Ibu Kota Nusantara), which serve as the underlying agreements for the development of land in IKN, may need to consider revisiting the agreed terms and conditions under those agreements.
We will continue to monitor subsequent regulatory changes and implementing measures as the Government adapts the land administration regime for IKN following the Court’s decision.
AKSET
Please contact Johannes C. Sahetapy-Engel (jsahetapyengel@aksetlaw.com), Adhitya Ramadhan (aramadhan@aksetlaw.com), or Ammarsyarif G. Goenawan (agoenawan@aksetlaw.com) for further information.
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