How to get a building permit in Indonesia?

When investors buy a property for a business or personal use, the building permit in Bali and the rest of Indonesia becomes a crucial part for some businesses.

• Restaurant
• Hotel
• Manufacture
• Residential and Airbnb
• Retail shop
• Etc

The above businesses need to get what is called a building permit. The building permit in Indonesia is one condition to be able to apply for some licence and run a business. In addition, the building permit can be applied under some conditions if the zoning of the land is in line with the purpose of the business.

What are the requirements and steps to get a building permit?

Indonesia have a law and regulation for building that have been authorized to be built. Namely Building Construction Permits (IMB) have been superseded by a Building Construction Approvals (PBG) by the Indonesian government. PBG is a licence to construct new buildings or change the purpose and technicality of existing structures. This is mentioned in Article 1 paragraph 17 of Government Regulation Number 16 of 2021 about Implementing Regulations of Buildings Law Number 28 of 2002 (Regulation 16/2021).

IMB versus PBG/SLF

While IMB was a permission that the owner had to get before or during the construction of a building, PBG is a licensing requirement that governs how buildings must be constructed.

The technical standards in concern include building planning and design, building implementation and supervision, and building utilisation. Apart from that, a Certificate of Worthiness (Sertifikat Laik Fungsi/SLF) is a certificate granted by the government to the owner of a building or its representative. It is a statement that the building is functionally fit for purpose and can be used properly according to plan.

The current global trend demands better public services in the digital era and it is a challenge for the bureaucracy to adapt to a rapidly changing external environment.

The Building Management Information System (SIMBG) is one of the licensing services that offer digital services. It is very common in some areas to hear investors getting a SLF before a building permit (PBG). TO BE CLEAR the law reinforces that you need to apply for a permit before the SLF and get your IMB. Some practices to get the SLF before the PBG are not correct and recommended. Some control can be done and performed and conducted to the demolition of your building.

Where to apply?

The regulation 16/2021 stipulates that the application of PBG and SLF can be made through the Building Management Information System (Sistem Informasi Manajemen Bangunan Gedung/SIMBG), which is organised by the Ministry of Public Work and Public Housing. Besides Processing PBG and SLG, SIMBG is also used to apply for other building-related permits including:

1. Building Ownership Certificates (Surat Bukti Kepemilikan Bangunan Gedung/SBKBG);
2. Technical Demolition Plan (Rencana Teknis Pembongkaran Bangunan/RTB);
3. Other building data/information.

How much building permit in Indonesia cost?

The cost of the building permit has to be separated in 2 aspects:

• New building
• Building built more than 2 years ago

While building built more than 2 years ago just need a SLF, the new construction needs to apply for the PBG before starting to build and need also to follow the new procedures.

The cost of the building permit is variable and is depending on the size of the building, the service fee of the agent applying for it. The processes to obtain the PBG can take several months and have a few back and forth between the government and the architect to revise the original plan. To limit the cost it is recommended to check with a local architect that the design and the construction respect some requirements related to the occupancy of the land, the type of roof etc.

For a villa of 2 or 3 bedrooms the cost of PBG will be a few thousands dollars in addition and has to be calculated in your cost of construction to avoid some surprises. The official retribution at 50 000 IDR to 70 000 IDR is a small part of the cost as other permit from Dinas are also needed to be issued.

The SLF itself is cheaper than the PBG as long as the PBG has been approved. As reminder a SLF for new building without a PBG is illegal and cannot legally being issued.

Building Construction Approvals (PBG – Building permit in Indonesia)

A PBG can only be issued if the building technical standards determined by the Central Government or the relevant regional government are met. For this purpose, Regulation 16/2021 provides a detailed list of the technical requirements which must be satisfied which includes those that apply to the following.

Requirements

1. the planning and design of buildings;
2. the construction and supervision of buildings;
3. the utilization of buildings;
4. the demolition of buildings;
5. the requirements apply to cultural heritage buildings (Bangunan Gedung Cagar Budaya or BGCB);
6. the requirements apply to buildings for special functions (Bangunan Gedung Fungsi Khusus or BGFK);
7. the requirements apply to green buildings (Bangunan Gedung Hijau or BGH);
8. the requirements apply to state buildings (Bangunan Gedung Negara or BGN);
9. the documentary requirements; and
10. the requirements apply to parties involved in the construction of a building.

For the construction of a building, the building owners must engage a group of building service providers, including a construction planning services provider (penyedia jasa perencana konstruksi), a construction services provider (penyedia jasa pelaksana konstruksi), and a supervision services provider (penyedia jasa pengawasan) or construction management services provider before commencing construction. The construction planner services provider must prepare a technical plan to be submitted to the authorities through the SIMBG for the application for a PBG.

Upon receipt of the application

Authorities will assess the architectural plan documents as well as the structural, mechanical, electrical, and plumbing plan documents. If all the technical documents satisfy the technical requirements, a recommendation for the issuance of a written statement of compliance with the technical requirements will be issued by the relevant technical agency in charge of building affairs in the area. Based on that recommendation, a written statement of compliance with the technical requirements will be issued which will also determine the mandatory fee that the applicant must pay and will be the basis on which the PBG is issued. A PBG consists of (i) the PBG document and (ii) attachments to the PBG document.

Regulation 16/2021 requires one service provider to construct them and the buildings must be owned by one person/legal entity when an application for a PBG is made and a collective PBG is approved.

Under which circumstances do you need to amend your building permit in Indonesia (PBG)?

1. the function of the building;
2. the number of floors of the building;
3. the area of the building;
4. the appearance of the building;
5. the specifications and dimensions of the building’s components which affect the safety or
6. health aspects of the building;
7. the retrofitting of a building against moderate or heavy damage levels;
8. the protection or development of a cultural heritage building; or
9. the repair of a building located in a cultural heritage area with minor, moderate, or severe;
10. damage.

However, a PBG does not need to be amended for the maintenance or treatment of the building.

Certificate of Worthiness (SLF)

The law emphasises that a building can only be utilised after the issuance of an SLF by the technical agency. The SLF will be issued through the SIMBG after the Technical Agency receives a written statement of worthiness (surat pernyataan kelaikan fungsi) from the supervisory services provider/construction management services provider/overseer (pengawas) upon completion of the final inspection and commissioning test of the building. An SLF consists of (i) SLF documents, (ii) attachments to the SLF documents, and (ii) the SLF label. SLFs are issued free of charge.

Under Regulation 16/2021, if several buildings are constructed in one area under the same technical plan, an SLF will be issued for each of the buildings. The term of an SLF is the following and is extendible:

1.  20 years for single and row residential houses;
2. 5 years for other kinds of buildings.

Building Ownership Certificate in Indonesia

The building ownership certificate was introduced under Regulation 16/2021. The SIMBG will issue a building ownership certificate to the building’s owner at the same time as the SLF. A building ownership certificate can be one of the documents listed below:

1. a Building Ownership Evidence Certificate (Surat Bukti Kepemilikan Bangunan Gedung or “SBKBG”);
2. an ownership certificate for a flat/apartment building (sertifikat kepemilikan Bangunan Gedung satuan rumah susun);
3. a flat/apartment ownership certificate (sertifikat hak milik satuan rumah susun). An SBKBG consists of
4. the SBKBG document and
5. attachments to the SBKBG document.

The SBKGB document provides the following information:

• who owns the building or part of the building;
• The address of the building;
• the land title status;
• the PBG number; and
• the SLF or SLF extension number.

Meanwhile, the attachments to the SBKBG document are the following information:

• • the land utilization agreement;
  • the deed of separation (akta pemisahan);
  • a situation image; and
  • the deed of the fiduciary security if the building is encumbered.

Like SLFs, if several buildings are constructed in one area under the same technical plan, an SBKBG will be issued for each of the buildings. Meanwhile, the ownership certificate for a flat/apartment building (sertifikat kepemilikan Bangunan Gedung satuan rumah susun) or flat/apartment ownership certificate (sertifikat hak milik satuan rumah susun) will be issued according to the relevant laws.

Approval for Demolition of a Building

Under Regulation 16/2021, If a building owner wants to demolish a building, it must obtain approval for its demolition from the Technical Agency through the SIMBG before commencing the demolition. For this purpose, the building owner must submit a Building Demolition Technical Plan (Rencana Teknis Pembongkaran Bangunan Gedung/RTB).

Before a demolition permit is issued, the applicant must meet with the technical agency to discuss the suitability of the demolition method given the condition of the building and the surrounding environment, and to ensure that the RTB meets the demolition technical requirements. If following the consultation, the technical agency finds that the demolition will not endanger the surrounding community, the approval for the building’s demolition will be issued through the SIMBG.

Demolition approval

The approval for the building’s demolition will be declared invalid if:

1. The building owner fails to demolish the building within 6 months of receiving demolition approval;
2. The building owner fails to demolish the building following the approved RTB; or;
3. The building owner fails to comply with the safety and health requirements when demolishing the building.

Before, the Building Law only imposed administrative sanctions on building owners and users. However, under the Omnibus Law and Regulation 16/2021, administrative sanctions can now be imposed on the building’s owner, the building’s management, the building’s users, the construction services provider, the experts or the technical reviewer appointed by the building owner/user, overseer (pengawas), Professional Experts Team (Tim Profesi Ahli) and Technical Assessment Team (Tim Penilai Teknis) formed by the regional government.

Administrative sanctions

Under Regulation 16/2021, the administrative sanctions that can be imposed include among others, the following:

1. written warnings;
2. a limitation on the construction, utilisation, or demolition activities;
3. a temporary or permanent suspension of the construction, utilisation, or demolition activities;
4. the freezing or revocation of the PBG, SLF, or demolition approval;
5. a suspension of the assignment of duties to the expert’s team for 3 months; vi. removal from the list of expert teams;
6. a suggestion for a sanction to the relevant professional association;
7. a temporary suspension or the termination of duties as an overseer (pengawas).

Summary

The steps to obtain as briefly above can be made through SIMBG (simbg.pu.go.id) with the several steps to take to obtain the permits as summarised by ILA Global Consulting:

Contact us if you need to know more on how to apply for a PBG/ SLF or building permit for your restaurant, manufacture, office, hotel or residence for Airbnb in Jakarta, Bali or the rest of Indonesia.