Ministry of Finance Clarifies Reasonableness Threshold for Property Auction Reserve Prices

The Ministry of Finance (Kemenkeu) continues to refine the revision of Regulation of the Minister of Finance No. 122 of 2023 on Guidelines for the Implementation of Auction (“PMK 122/2023”). The Head of the Legal Bureau of the Secretariat General of Kemenkeu, Tio Serepina Siahaan, explained that one key point of the revision is to further clarify the fairness threshold for property auction reserve prices.

“We are currently developing a new property valuation system to address the issue of auction reserve prices that are often set far below market value and that trigger legal challenges from debtors or other interested parties,” said Tio to Hukumonline.

To date, auction reserve prices have been set without a unified valuation standard and have frequently led to legal disputes because they are considered not to reflect the fair value of the property. This has also resulted in potential state losses and perceived unfairness to debtors. Through the new property valuation system, the government hopes the auction process will become more transparent and accurate, reduce legal challenges, and increase public confidence in the auction mechanism.

“It is targeted to be implemented this year,” she added.