A shift in land-rights policy is unfolding around Indonesia’s new capital, yet the momentum of investment hasn’t wavered. Even with the cancellation of the 190-year cultivation rights in Nusantara after the Constitutional Court’s ruling, investors have remained silent. No objections. No protests. Just business continuing as usual.
The ruling came after the Court partially granted the petition in case number 185/PUU-XXII/2024. Along with the cancellation of the 190-year HGU, the Court also struck down the 160-year building use rights and usage rights, declaring both had no binding legal force and must be annulled.
When asked about the decision, Minister of Agrarian Affairs and Spatial Planning/National Land Agency Nusron Wahid kept the response simple. “We follow the legal decision. If the Court decides, we comply.” He later added, “I believe it’s better to have a clear decision like this. And I’m confident it won’t have any negative impact.”
The long-term HGU had been part of an incentive package introduced under President Joko Widodo to draw investors into the new capital project. Even so, Nusron doesn’t see the cancellation as a setback. He’s certain the government will come up with alternative incentives to keep investment interest strong.
“I’m sure the government will consider offering other incentives, beyond the long-term HGU,” he said. He also emphasized that evaluation, monitoring, and land-governance systems in Nusantara will continue to be strengthened to maintain transparency and accountability.
The legal process behind this ruling began with a judicial review request filed by principal petitioner Stepanus Febyan Babaro and his legal counsel, Syamsul Jahidin. Their petition challenged Law No. 3 of 2022 on the New Capital City, pointing out inconsistencies. They argued that Article 16A paragraphs (1), (2), and (3) of the IKN Law conflicted with Article 9 of Presidential Regulation No. 75 of 2024. Both contained different rules on the duration of cultivation rights, building use rights, and usage rights.
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They also highlighted another gap. Neither the IKN Law nor Presidential Regulation No. 75 of 2024 clearly stated which parties were eligible to hold HGU, HGB, or HP. This ambiguity, they warned, could open the door for foreign entities to control land in Nusantara for excessively long periods. Such long-term grants, they argued, could ultimately harm the interests of future generations.
Constitutional Court Chief Justice Suhartoyo later clarified the core issue. He explained that Article 16A paragraph (2) of the IKN Law conflicted with the 1945 Constitution and held no binding legal force unless interpreted conditionally.
Meanwhile, Head of the Nusantara Capital Authority, Basuki Hadimuljono, reported that the ruling hasn’t triggered any negative reactions from investors. “Insya Allah and alhamdulillah, as of now, we haven’t received any complaints from investors,” he told members of Commission II at the House of Representatives.
Basuki noted that the Court’s ruling didn’t eliminate land rights altogether. Instead, it revised the mechanism for granting cultivation rights. From his perspective, investors mainly want certainty about the future of the project.
And that certainty, he said, already exists. Presidential Regulation No. 79 of 2025 outlines that Nusantara will officially function as Indonesia’s political capital starting in 2028. With a clear timeline in place, he believes investors see the development path as stable and predictable.
