Ministry of ATR/BPN Drafts Regulation on the Implementation of TDR

The Ministry of Agrarian Affairs and Spatial Planning/National Land Agency (“ATR/BPN”) is currently drafting a ministerial regulation on the provision of incentives and disincentives to support spatial utilization control. One of the instruments to be regulated under the ministerial regulation is the provision of Transfer of Development Rights (“TDR”).

Aria Indra Purnama, Director of Spatial Utilization Control at the Ministry of ATR/BPN, said that the ministerial regulation would serve as a reference for regional governments in preparing implementing regulations for TDR. “Because it is highly technical, I believe it will be difficult to implement if it is not further elaborated in regional regulations,” he said.

Aria said the regulation would establish technical norms, standards, procedures, and criteria concerning TDR. According to him, the regulation would also stipulate how TDR must be expressly incorporated into Regional Spatial Plans (Rencana Tata Ruang Wilayah – “RTRW”) and Detailed Spatial Plans (Rencana Detail Tata Ruang – “RDTR”), including the designation of sending and receiving zones, the determination of TDR values, and the relevant administrative procedures.

According to Aria, establishing this regulation is important to ensure that the resulting policy is not merely normative but also has a clear operational framework. With the regulation in place, regional governments will have a legal framework for establishing a TDR market that can provide legal certainty for landowners and developers.