'Time to adopt land banking concept'

'Time to adopt land banking concept'

JAKARTA (JP): A member of City Council has urged the city
administration to adopt a land banking concept, in a bid to help
reduce land disputes in the future.

Lukman F. Mokoginta, chairman of the Indonesian Democratic
Party faction, said over the weekend that the increasing demand
for land in urban areas, as a consequence of the rapid growth of
development, requires the best management of land.

He said that the land banking concept, as an alternative in
land management, is urgently needed. "This is the right time to
go with land banking," he said.

Under the land banking concept, city administration can
appropriate certain plots of lands, which will later be sold at
reasonable prices to private companies for the establishment of
their projects.

He said that the concept used to be implemented by city
administration, but failed to continue, due to land appropriation
by large-scale businessmen.

Due to the absence of the land banking concept, land prices
immediately rise in certain areas where the city administration
plans to build public facilities, such as roads. As a result, the
land is later appropriated by large-scale companies at the
expense of the public.

Therefore, it is now time to discuss the mechanism of the land
banking concept by involving a number of related institutions, he
said. "We do need the best concept of land management," he added.

Lukman also suggested that city administration revise the
regulation on existing land appropriation permits, which enable
them to manipulate tax payments.

According to the regulation, only transactions of land over
5,000 square meters in size are subject to tax payments.
This measurement should be lowered to 2,000 square meters to
discourage businessmen from making transactions covering smaller
land areas to avoid tax payments. (32)