Agrarian Reform: Understanding the Categorization of Land

Generally, there are mainly two categories of land in determining the Land Titles available to it, namely: Agricultural Land & Non-agricultural Land. These categories of land arose from the principles of Indonesia Agrarian Reform which considers such lands as Land Objects of Agrarian Reform (“TORA” or ‘Tanah Objek Reforma Agraria’) that is part of the land redistribution implementation process of Agrarian Reform. 

Taking reference from the Regulation of the Minister of Agrarian Affairs and Spatial Planning/The Head of the National Land Agency Number 16 of 2022 on The Delegation of Authority For the Granting of Land Rights and Land Registration Activities (“Permen ATR BPN 16/2022”), the determination of Land Rights and registration of land activities are the authority of the Ministry of Agrarian Affairs. Which is partially delegated to Heads of Regional Offices and/or Heads of Land Offices. These authority figures determine the Land Rights available to possess based from the type of land related to it. 

Freehold Title

 

First and foremost, what does a Land Title mean? Land Titles are rights that are obtained from legal relationships between the titleholder and the Land, including aboveground space and/or underground space to control, own, use, and utilize, as well

1. Presidential Regulation 86/2018, Article 8 jo. Regulation of The Minister of Agrarian Affairs and Spatial Planning / The Head of The National Land Agency Number 16 of 2022 on The Delegation of Authority For the Granting of Land Rights and Land Registration, Article 5
2. Presidential Regulation 86/2018, Article 6
3. Permen ATR BPN 16/2022, Article 2
4. Ibid. Article 4 (1)

as maintain the Land, aboveground space, and/or underground space. A Freehold Title is the strongest Land Title a person could have as it  provides the holder full land ownership rights. This means it gives the holder the ownership and capacity to cultivate the land.  It proves that the Title holder is eligible to either personally conduct activities on the land and/or transfer the right of ownership to other individuals/entities as either Right-to-Cultivate, Right-to-Use, Right-to-Build, etc. 

Below, we list the provisions involved in terms of Agricultural Land and Non-agricultural Land. 

• Agricultural Land

• Under Head of Regional Offices: Freehold Title is given to Individual persons on agricultural land which covers an area of more than 50,000 m2 and not more than the maximum threshold ownership of agricultural land for individual person.

• Under Head of Land Offices:  Freehold Titles is given to Individual persons on agricultural lands which cover an area of no more than 50,000 m2.
• Towards Legal / Social Legal Entities: Freehold Title is given to religious legal and/or social legal entities which have been appointed based on Regulation of the Government Number 38 of 1963 on the Appointment of Legal Entities that May Hold Freehold Title (“Governmental Regulation 38/1963”) on Land of no more than 50,000 m2 up to 150,000 m2

• Non-agricultural Land

Under Head of Regional Offices: Freehold Title is given to Individual persons on non-agricultural land which covers an area of more than 5,000 m2 up to 15,000 m2

5. Regulation of the Government Number 18 of 2021 on Right-to-Manage, Land Titles, Multistory Housing Units, and Land Registration (“Government Regulation 18/2021”), Article 1 (4)

• Under Head of Land Offices: Freehold Title is given to Individual persons on non-agricultural lands which cover an area of no more than 5,000 m2
• Towards Legal / Social Legal Entities: Freehold Title is given to religious legal and/or social legal entities which have been appointed based on Governmental Regulation 38/1963 on Land of no more than 50,000 m2.

In cases where Freehold Title for non-agricultural land exceeds the size of the provisions as referred above then said individual persons is granted a Land Right in the form of Right-to-Build or Right-to-Use. This encompasses types of land that includes: Residential Houses, Shophouses, and Office Houses. 

Rights to Conduct Activities on Land

 

From holding the Freehold Title, the holder of the Title can start to conduct activities either by themselves or transfer it to other individuals/entities partial ownership as to provide them the capacity to conduct certain activities based on the rights they hold. Additionally, only Indonesian citizens and legal entities that have been determined by the government of Indonesia can transfer the right of ownership as they are they are the only subjects eligible to hold them. These rights include: 

• The Right-to-Cultivate (Hak Guna Usaha)

1. 1. For Legal Entities with land that covers ther area of more than 250,000 – 5,000,000 m2: This condition falls under the authority of Heads of Regional Offices, which provides the Right-to-Cultivate for legal entities on State Lands or on Right-to-Manage lands which cover an area of more than 250,000 m2 up to 5,000,000 m2;
   2. For Individual Persons or Legal Entities with land that covers ther area of more than 50,000 m2 – 250,000 m2: This condition falls under the authority of Heads of Land Offices, which provides the Right-to-Cultivate

6. Permen ATR BPN 16/2022, Article 5 (2)
7. Law Number 5/1960 on Basic Agrarian Principles, Article 21

1. for individual persons or legal entities on State Land or on land with Right-to-Manage which covers an area of 50,000 m2 up to 250,000 m2.

In the event that the area of Right-to-Cultivate for individual persons exceeds the limit as accordance with the provision above, the granting of Right-to-Cultivate utilizes appropriate capital investment and company techniques that fulfill the requirement as well as be equipped with business licensing.

• The Right-to-Build (Hak Guna Bangunan)

Under the authority of Heads of Regional Offices:

1. For Individual Persons with land that covers an area of more than 10,000 m2 – 20,000 m2: This condition falls under the authority of Heads of Regional Offices, which provides the Right-to-Build for individual persons on State Lands or on Right-to-Manage lands which cover an area of more than 10,000 m2 up to 20,000 m2; 
2. For Legal Entities with land that covers an area of more than 30,000 m2 – 250,000 m2: This condition falls under the authority of Heads of Regional Offices, which provides the Right-to-Build for legal entities on State Lands or on Right-to-Manage lands which cover an area of more than 30,000 m2 up to 250,000 m2 

In case where the Right-to-Build for individual persons size exceeds the provision mentioned above (10,000 m2 – 20,000 m2), the granting of Right-to-Build utilizes appropriate capital investment and company techniques that meet the requirements as well as be equipped with a business license; and

Under the authority of the Head of Land Offices:

1. For Individual Persons with land that covers an area up to 10,000 m2: Right-to-Build for individual persons on State Lands or on Right-to-Manage lands which cover an area of up to 10,000 m2; and
2. For Legal Entities with land that covers an area up to 30,000 m2: Right-to-Build for legal entities on State Lands or on Right-to-Manage land which cover an area of up to 30,000 m2.

• The Right-to-Use (Hak Pakai)

Under the authority of the Heads of Regional Offices:

Agricultural Land

 

1. For Individual Persons with Agricultural Land that covers an area of more than 50,000 m2: This condition falls under the authority of Heads of Regional Offices, which provides the Right-to-Use for individual persons on State Lands or on Right-to-Manage over agricultural lands which cover an area of more than 50,000 m2 up to 250,000 m2; and
2. For Legal Entities with Agricultural Land that covers an area of 250,000 m2 – 5,000,000 m2: Right-to-Use for legal entities on State Lands or on Right-to-Manage over agricultural lands which cover an area of more than 250,000 m2 up to 5,000,000 m2.

Non-Agricultural Land

 

1. For Individual Persons with Non-Agricultural Land that covers an area of more than 10,000 m2 – 20,000 m2: This condition falls under the authority of Heads of Regional Offices, which provides the Right-to-Use for individual persons on State Lands or on Right-to-Manage over non-agricultural lands which cover an area of more than 10,000 m2 up to 20,000 m2; and
2. For Legal Entities with Non–Agricultural Land that covers an area of 30,000 m2 – 250,000 m2: This condition falls under the authority of Heads of Regional Offices, which provides the Right-to-Use for legal entities on State Lands or on Right-to-Manage over non-agricultural lands which cover an area of more than 30,000 m2 up to 250,000 m2.

In case where the Right-to-Use for Agricultural and Non-Agricultural Lands for individual persons size exceeds the provisions mentioned above, the granting of Right-to-Use utilizes appropriate capital investment and company techniques which fulfill the requirements as well as be equipped with a business license.

Conclusion

 

Thus, through the implementation of Agrarian Reform, the classification of land occurs. As such, the categorization of land paved way for the application of Land Titles that determine the capacity the holder what they can do with the land they’ve acquired. It is a tricky concept that proves to be even more difficult to comprehend when we try to apply them in reality. However, if you should feel the need to consult further, Selaras Law Firm is here to answer all your answers! 

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Source

 

Laws and Regulations

• Law Number 5/1960 on Basic Agrarian Principles
• Regulation of the Minister of Agrarian Affairs and Spatial Planning/The Head of the National Land Agency Number 16 of 2022 on The Delegation of Authority For the Granting of Land Rights and Land Registration Activities 

Presidential Regulation 86/2018, Article 8 jo. Regulation of The Minister of Agrarian Affairs and Spatial Planning / The Head of The National Land Agency Number 16 of 2022 on The Delegation of Authority For the Granting of Land Rights and Land Registration