The Importance of Public Appraisal Service Office in Midst of Recession

The upcoming economic recession might soon become inevitable for most of the countries including Indonesia that Dollar United States to Rupiah is quite constantly rising annually in 2022 with currently at Rp 15.580 the latest in 9th December 2022. Even though some economists predicted Indonesia would not be badly jeopardized by the global recession compared to 2020 and 1998 due to the stable real economy so far. Though the pretty concerning value of Rupiah and its still diminishing trends might represent the market of Indonesia is not strong as it says. Then the economic recession could still haunt Indonesia with the rise of operational cost of businesses, market price, interest rate and also difficulty in selling assets because of the decrease in people’s purchasing power.[1]

Therefore, it is important to recalculate the value of assets in the midst of the uncertainty of the economic conditions when the nation’s money value has gone diminished during the increasing market price. Thus, the role of the Public Appraisal Service office (Kantor Jasa Penilai Publik / KJPP) might become a solution to assume, predict and even plan for utilization of assets. KJPP is regulated in Finance Minister Regulation No.228/PMK.01/2019 as an entity where a public appraiser operates its business either in the form of an individual, civil partnership or firm. Public Appraisal Service Office might conduct service in simple property, property, business assessment and personal property appraisal with its scope mentioned below:

Simple Property Appraisal Property Appraisal Business Appraisal Personal Property Appraisal
a.     Vacant land for settlements with a maximum area of 5,000 (five thousand) square meters designated for 1 (one) residential unit;

b.     1 (one) apartment unit, residential house, shop house, office house, or store;

c.     building tools and equipment that are part of an apartment, residential house, shop house, office house, or kiosk;

d.     1 (one) unit of individual machine used in a residential house, shop house, or office house, including a generator and water pump;

e.     1 (one) unit of transportation equipment with the classification of passenger cars, cargo cars, and motorbikes, which are not part of a transportation fleet; and

f.      1 (one) single warehouse unit with a land and building area of no more than 500 (five hundred) square meters each.


a.     Land and buildings and their accessories, as well as other developments on land;

b.      machines and equipment including installations assembled in one unit and/or independently used in the production process;

c.     transportation equipment, heavy equipment, communication equipment, medical equipment, laboratory and utility equipment, office equipment and furniture, and military equipment;

d.     telecommuni-cations equipment including transmitting and receiving equipment for networks, satellites and ground stations;

e.     agriculture, plantation, animal husbandry, fishery, and forestry; and

f.      mining.

a.     business entity;

b.     equity;

c.     securities including their derivatives;

d.     company rights and obligations;

e.     intellectual property rights and intangible assets;

f.      economic losses caused by certain activities or events to support various corporate actions or for material transactions

g.     Fairness opinion; and

h.     financial instrument.


a.     factory including its installation which is one unit;

b.     machines and equipment including installations assembled in one unit and/or independently used in the production process;

c.     transportation equipment, heavy equipment, communication equipment, medical equipment, laboratory and utility equipment, office equipment and furniture, and military equipment; and

d.     telecommuni-cations equipment including network transmitting and receiving equipment, satellites, and ground stations.


Other than business scope that have been mentioned above, KJPP is also allowed to give other services include:

  1. Property development consultancy;
  2. Asset information system design;
  3. Property management;
  4. Business feasibility study;
  5. Property agent services;
  6. Project financing supervision;
  7. Study of determining of the remaining economic life;
  8. Study of the highest and best use;
  9. Asset optimization study.

KJPP generally has responsibilities that are only limited to the time and location of the assessment, which is after completing the assessment. If the report has been issued, then other assets or reports that have just occurred at a time and place than what is written in the report are no longer the task of KJPP. Various things that might happen after the assessment carried out by KJPP, are no longer the responsibility of the appraiser. The appraiser will only be accountable for the results of the assessment at the place, time and object that is in the report on the results of the assessment itself.

With regard to property appraisal services, using KJPP services provides many benefits. One of the benefits of KJPP is maintaining the necessary skills with the aim of ensuring that the results of the assessment are prepared according to technical and statutory regulations. KJPP can also be relied upon to maintain information obtained from professional or business relationships. This information will be closely guarded and not distributed to other parties without permission. In addition, the information will not be used for personal or third-party benefits. Furthermore, consider the following several other benefits of KJPP[2] :

  1. Conduct Legal Assessments

The appraiser is a third party, while KJPP is the party responsible for determining the collateral value of an object for the mortgage object. There are many aspects that can be seen to determine the value of collateral, such as building area, land status, boundaries and location of the object as a whole, and so on. KJPP must conduct an assessment according to existing regulations, of course it is also still under the auspices of MAPPI (Indonesian Appraiser Profession Society) which is reviewed by the Appraisal Board. In addition, the Public Appraisal Services Office also has full responsibility for SPI (Indonesian Assessment Standards) and KEPI (Indonesian Assessment Code of Ethics).

  1. Assessment Results Become Measurable and Accurate

In the world of banking, asset valuation is needed properly and correctly. If an error occurs when appraising the property, it will cause many problems during the auction/liquidation or calculations to leave productive assets. When liquidation of collateral or assets occurs, usually the market value is not higher than the market price. If so, of course it will be detrimental to the bank because they have to sell assets at very cheap prices. So that it cannot cover the various obligations that still exist.

  1. Resolving Disputes

Dispute is certainly the thing most avoided by anyone. However, if a dispute has occurred, the solution or settlement that will be carried out by KJPP is as follows:

  1. Utilizing the assessment through special adjustments that have been listed in the 2013 SPI.
  2. Carrying out surveys of assessment objects repeatedly and also surveys for the surrounding environment. The goal when conducting an assessment is to find out the object you want to assess, whether there are residents or not. If it is empty, the appraiser can request data from the owner of the object to the party using the appraiser’s services.
  3. If an obstacle occurs that causes adverse effects such as injury or even loss of life, then KJPP’s role is to refuse an assessment of the customer’s building and land assets not to be carried out. But it must be conveyed as clearly as possible in the appraisal report given to the party who has given the assignment, for example a bank.

In terms of taxes, using KJPP to re-evaluate assets might adjust tax amounts and be quite useful when the result can be a legal basis if there is any tax dispute or when making transfer pricing documents with fairness opinions provided by KJPP. Though also for Individuals and Entities who use the services of the appraiser, will be charged an Article 23 Income Tax (PPh) rate of 2% and are also required to provide proof of withholding Article 23 Income Tax for this service.

Overall, it could be concluded that Indonesia is still vulnerable for upcoming crisis due to our loss of value in currency. The value of our money could be lower than it was in the same time the price of market could getting higher. Therefore, using the Public Appraiser Service Office or KJPP might become useful to re-evaluate our assets so we could prepare ourselves to maintain our wealth for the upcoming crisis. At the same time there is a lot of benefits and scope of business activity that could be provided from KJPP that either in business or in tax we could measure, plan and even resolving disputes with the help of KJPP.




TBrights is integrated business service in Indonesia that has valuation partner and valuation consultants that can provide you for valuation services in Indonesia.


by Tommy HO – Managing Partner TBrights

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