Director General of Human Settlements Circular Letter Number 6 of 2026 Officially Enacted: Standardizing Supervision, Reporting, and Administrative Sanctions for Housing Business Actors

Introduction

On 6 July 2026, the Directorate General of Human Settlements implemented Director General of Human Settlements Circular Letter Number 06/SE/Dp/2026 on Technical Guidelines on Document Formats, Mechanisms for Fulfilling Business Actors’ Obligations, and Procedures for the Imposition of Administrative Sanctions in the Administration of Risk-Based Business Licensing in the Housing Sector (“Circular Letter 6/2026”). Circular Letter 6/2026 standardizes the procedures for conducting supervision, the use of document formats, reporting mechanisms, and the procedures for imposing administrative sanctions on business actors in the housing sector.

The issuance of Circular Letter 6/2026 is intended to establish uniformity in the implementation of supervision between the central and regional governments in order to ensure legal certainty, orderly administration, and transparency in the administration of business licensing. Through these technical guidelines, the Directorate General of Human Settlements establishes uniform operational standards to ensure that compliance assessments of business actors in the housing sector and the imposition of administrative sanctions are carried out consistently, objectively, and in an integrated manner through the Online Single Submission (OSS) System.

Key Provisions

Scope of Application and Business Obligations

Circular Letter 6/2026 applies to business actors conducting residential real estate business activities under Indonesian Standard Industrial Classification (KBLI) 68111.

In carrying out their business activities, such business actors are required to comply with the requirements of the risk-based business licensing regime, including obtaining an Approval Decision and an Acknowledgment of Report Receipt issued by the regional government as part of fulfilling their administrative obligations.

Procedure for Obtaining an Approval Decision

Pursuant to Section G, applications for an Approval Decision must be submitted to the relevant central or regional government authority, depending on the scale of the development area, whether at the regency/city level, across regencies/cities, or across provinces.

Applications are submitted based on the housing classification and the type of business activity undertaken by the business actor. The required documents differ depending on whether the development concerns Housing Development for Low-Income Communities (MBR) or General Housing Development.

1. Housing Development for Low-Income Communities (MBR)

·      Landed Housing, including:

o   approval of the housing area master plan and/or housing site plan; and/or

o   approval of revisions to the approved housing area master plan or housing site plan.

·      Apartment Buildings, including:

o   approval of the housing area master plan and/or housing site plan;

o   approval of the apartment unit allocation plan, which includes:

§  the plan for the separation of the parent Building Use Rights Certificate;

§  the functional designation and utilization plan for each apartment unit;

§  the apartment unit allocation plan; and

§  the plan for separating the management of residential and non-residential areas in mixed-use apartment buildings; and/or

o   approval of revisions to the above documents.

All approvals are granted as necessary according to each stage of the implementation of MBR housing development.

2. General Housing Development (Non-MBR)

·      Landed Housing, including:

o   approval of the housing area master plan and/or housing site plan;

o   approval of the conversion fund calculation; and/or

o   approval of revisions to the planning documents and/or conversion fund calculation.

·      Apartment Buildings, including:

o   approval of the housing area master plan and/or housing site plan;

o   approval of the apartment unit allocation plan, which includes:

§  the plan for the separation of the parent Building Use Rights Certificate;

§  the functional designation and utilization plan for each apartment unit;

§  the apartment unit allocation plan; and

§  the plan for separating the management of residential and non-residential areas in mixed-use apartment buildings;

o   approval of the conversion fund calculation; and/or

o   approval of revisions to the above documents.

Approvals at each stage are granted as required according to the stages of housing development. The conversion fund calculation applies only to business actors subject to the Balanced Housing obligation, namely the obligation to provide simple, medium, and luxury housing in proportion as required under the prevailing laws and regulations. Where this obligation has already been fulfilled, the conversion fund shall be determined to be IDR 0 (zero rupiah) in accordance with the applicable laws and regulations.

Following the submission of an application, the ministry or regional government agency responsible for housing and settlement affairs will issue an Acknowledgment of Receipt containing a registration number. This document serves as proof that the application has been received and as the basis for monitoring the progress of the application.

The Government, acting as the Coordinating Assessor, will conduct verification and site inspections before officially issuing the Approval Decision within a maximum of 2 (two) days from the date the Site Inspection Report is prepared.

Strict Annual Reporting Obligation (Acknowledgment of Report Receipt)

Pursuant to Section H, business actors are required to apply for an Acknowledgment of Report Receipt at least once every year as part of fulfilling their reporting obligations.

The application must be accompanied by supporting documents reflecting the performance and progress of the business operations, including:

·      audited financial statements, applicable only to commercial housing developers;

·      the company’s cash flow projections or analysis;

·      reports on the implementation progress of the Sale and Purchase Binding Agreement (Perjanjian Pengikatan Jual Beli – PPJB); and

·      reports on the establishment of the Association of Apartment Unit Owners and Occupants (Perhimpunan Pemilik dan Penghuni Satuan Rumah Susun – PPPSRS) for business actors developing apartment buildings.

The requirement to submit audited financial statements does not apply to business actors engaged in the development of Housing for Low-Income Communities (MBR).

Integrated Supervision and Escalation of Administrative Sanctions

Pursuant to Section I, Circular Letter 6/2026 establishes a supervision mechanism consisting of routine supervision and incidental supervision.

Routine supervision is conducted through the examination of periodic reports and site inspections, while incidental supervision may be conducted at any time based on public complaints or specific supervisory needs without prior notice to the business actor.

Where supervision identifies indications of non-compliance or violations of the applicable regulations, the supervisory team will prepare an Inspection Report (Berita Acara Pemeriksaan – BAP) as the basis for recommending the imposition of administrative sanctions, which are processed electronically through the OSS System.

Transitional Provisions

Pursuant to Sections G and H, where a Regional Government has previously established its own Standard Operating Procedures (SOPs) or electronic systems relating to the issuance of Approval Decisions and reporting mechanisms, such procedures or systems may continue to be used.

However, the substance and information contained in the document formats used by the Regional Government must be at least equivalent to the standards prescribed in the Annex to Circular Letter 6/2026.

Closing

Circular Letter 6/2026 standardizes the implementation of supervision, reporting, and the imposition of administrative sanctions in the administration of risk-based business licensing in the housing sector. Through these uniform technical guidelines, the Government seeks to establish legal certainty, orderly administration, and consistency in supervisory practices between the central and regional governments, while enhancing supervisory effectiveness through integration with the OSS System.

For business actors engaged in residential real estate activities, Circular Letter 6/2026 introduces obligations to comply with the prescribed licensing procedures, obtain Approval Decisions, submit annual reports, and comply with supervisory processes in accordance with the prescribed formats and procedures. At the same time, Regional Governments retain the flexibility to continue using their existing standard operating procedures or electronic systems, provided that the substance and information contained therein are at least equivalent to the standards stipulated in the Annex to Circular Letter 6/2026.