Indonesia’s Land Reform Gains Momentum – Key Updates from GR 18/2021
Salam,
Indonesia’s 2020 Omnibus Law on Job Creation, now consolidated as Law No. 6/2023, has reformed many areas that previously hindered investment. One area gaining traction is land reform, especially Government Regulation 18/2021 (GR 18/2021). Last week’s posts focused on:
Electronic land registration
The elimination of informal land titles
Foreigners’ rights to residential property
I have illustrated the first post, "Indonesia's Land Ownership: A Legal Business Perspective," in a graph that highlights the fact that only a small percentage of formal land titles are privately owned. The Government owns around 70% (which the law euphemistically refers to as "state-controlled").
MAIN EVENT
Indonesia Eliminates Informal Land Titles by 2026. The Government ends the validity of Hak Girik and other informal titles, affecting up to 40% of private parcels.
Business impact: Critical. Starting February 2026, informal titles will no longer be recognized. GR 18/2021 mandates the conversion of these titles into formal titles, creating an urgent compliance burden for millions of landholders.
Post: Indonesia Eliminates Informal Land Titles by 2026
WHAT ELSE MATTERS
Electronic Certificate Launch: ATR/BPN converting pre-1997 physical titles to blockchain-secured digital certificates
Post: Indonesia’s E-Certificate Push: Modernizing Land Titles
Foreign Ownership Reform: GR 18/2021 allows foreigners to own landed houses (Hak Pakai) with a tenure of up to 80 years (30 + 20 + 30 years), and strata units (SHMSRS). For details and limitations, read:
Post: Foreign Property Ownership in Indonesia: Legal Guide to Government Regulation 18/2021
CONTEXT
Indonesia’s split land system continues to create legal uncertainty:
Only 30% of the land is available for private ownership (private parcels).
An estimated 35–60% of private parcels remain unregistered or are held with informal titles, making them ineligible as collateral or for secure transactions.
GR 18/2021 is the primary regulation implementing the land reform agenda:
Formalizing ownership
Introducing digital registration
Expanding access for foreigners
Post: Modernizing Land Rights: GR 18/2021’s Digital and Legal Reforms
DEEP DIVE: Electronic Land Registration
GR 18/2021 also mandates the digital conversion of Indonesia's land registry system
Implementation: The Sentuh Tanahku platform initiated the digital conversion in December 2023, with a focus on titles issued before 2000.
Goal: Reduce fraud, address registry errors, and enhance transaction certainty.
Challenges Include Digital illiteracy, low trust in online systems, and unresolved customary land disputes (estimated to be 40–70 million hectares).
Conversion Fee: Rp 50,000 per certificate.
Post: Indonesia’s E-Certificate Push: Modernizing Land Titles
I hope you find this update helpful.
Have a great week,
Kai