Indonesia: Affordable housing bill

Author: | Published: 21 Mar 2016
Email a friend

Please enter a maximum of 5 recipients. Use ; to separate more than one email address.

Ali Budiardjo Nugroho Reksodiputro


Graha Niaga, 24th Floor Jl. Jend. Sudirman Kav. 58 Jakarta 12190


+62 21 250 5125/5136


+62 21 250 5001/5121 Visit Website
Oene-Marseille Emir-Nurmansyah
Oene Marseille Emir Nurmansyah

Indonesia's House of Representatives (Dewan Perwakilan Rakyat) has passed a bill establishing a saving programme to assist low to medium income workers in obtaining affordable housing.

Under the bill, all employees (including foreigners with a working visa) will be required to set aside a certain percentage of their income. This will be deposited in a special account. Self-employed individuals earning a salary at least equal to the minimum wage must also participate. Employers will also be asked to contribute. The contribution amounts for employees and employers will be set out in a separate regulation.

The bill also calls for the establishment of a management agency that will be responsible for collecting and managing the funds in the participants' special accounts.

The money in the account will be invested and will generate an income. Participants can use this income to purchase a house or to construct or renovate an existing house, provided that the house is the participant's first home and certain criteria are met. This includes a requirement that the maximum purchase price is not exceeded. Non-Indonesian participants may not use the money in the account to buy a house in Indonesia.

If there is any balance remaining in the account after the participant reaches retirement age, the money will be disbursed back to them. However, the mechanism by which non-Indonesian participants receive this disbursement is currently unclear. The bill provides only that disbursement is possible if the participant: reaches the age of 58; retires; dies; or does not qualify to participate in the programme for five consecutive years.

The bill is currently awaiting the President's signature. In the absence of this signature, the bill will automatically become law 30 days after its passage in the House of Representatives.

Oene Marseille and Emir Nurmansyah