Decree of the Minister of Housing and Settlement Areas Number 23/KPTS/M/2026 Increases the Maximum Selling Price of Subsidized Flats

Introduction

On 5 April 2026, the Ministry of Housing and Settlement Areas issued the Decree of the Minister of Housing and Settlement Areas Number 23/KPTS/M/2026 on the Amount of Selling Prices, Floor Area, Interest Rates, and Loan/Financing Tenor for Home Ownership Credit/Financing for Apartment Units under the Housing Financing Liquidity Facility scheme (“Decree 23/2026”), which took effect on that date. This regulation reshapes the financing landscape for vertical housing by establishing updated price benchmarks and credit requirements specifically for subsidized apartment schemes.

Decree 23/2026 is issued to implement the mandate of Article 4 paragraph (4) of Ministerial Regulation of Housing and Settlement Areas Number 9 of 2025 on Housing Financing Facilities and Assistance for Low-Income Communities, as well as Article 3 paragraph (5) of Ministerial Regulation of Housing and Settlement Areas Number 1 of 2026 on the Second Amendment to Ministerial Regulation of Housing and Settlement Areas Number 5 of 2025 on Income Thresholds and Criteria for Low-Income Communities and Requirements for Housing Development and Acquisition Facilitation. This policy realigns physical building standards and financing structures for Low-Income Communities (MBR) to ensure that housing liquidity facility instruments continue to function optimally amid current construction cost dynamics and economic conditions.

 

Comparison

Decree 23/2026 revokes provisions on selling price limits, floor area, interest rates, and loan/financing tenure for apartment units as previously stipulated in the Decree of the Minister of Public Works and Public Housing Number 995/KPTS/M/2021 on Certain Income Limits, Subsidized Interest Rates/Financing Margins, Subsidy Periods, Home Ownership Credit/Financing Tenors, Land Area Limits, Floor Area Limits, Selling Price Limits for Landed Houses and Apartment Units, and Down Payment Subsidy Amounts (“Decree 995/2021”). The following is a comparison table between Decree 23/2026 and Decree 995/2021:

 

Key Provisions

Floor Area Standards and Selling Prices

Dictum Second establishes new floor area standards for general apartment units with a minimum limit of 21 square meters and expands the maximum limit to 45 square meters. The Annex to Decree 23/2026 specifies the maximum price per square meter as well as the maximum price per unit across 37 provinces and specific agglomeration areas. For example, developers in Papua Pegunungan Province are now entitled to set a maximum price of up to IDR 28,000,000 per square meter.

A. Selling Prices by Province

 

B. Selling Prices by Regency/City

 

Financing Structure and Loan Tenor

Dictum Third stipulates that banks or financing institutions must apply an interest rate of 6% per annum for debtors of general apartment units. Under Dictum Fourth, financial institutions may offer a repayment period or home ownership loan (KPR) tenor of up to a maximum of 30 years for such apartment units.

 

Transitional Provisions

To balance the increase in interest rates, the Fifth Dictum stipulates that all apartment units (rumah susun) that have entered into a credit agreement prior to 5 April 2026 shall continue to be governed by the provisions of the existing credit agreement until the debtor has fully repaid the installments.

 

Closing

Decree 23/2026 expands the floor area standard to 21–45 square meters, establishes new maximum selling price ceilings for 37 provinces and agglomeration areas, with the highest price reaching IDR 28,000,000.00 per square meter in Papua Pegunungan, and sets the financing interest rate at 6% per annum. The loan repayment period (tenor) may now be extended up to a maximum of 30 years, while debtors who executed their credit agreements prior to 5 April 2026 shall remain subject to the previous provisions until their installments are fully paid.