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Tax incentive boosts sales of houses, apartments
A recently extended value-added tax (VAT) incentive is credited with stoking demand for landed properties, according to real estate agencies.
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A housing complex in suburban Jakarta is pictured in this aerial photo taken on Aug. 4, 2021. (AFP/Bay Ismoyo)
W
hile landed houses are selling briskly thanks in part to a recently introduced tax incentive, the market for condominiums continues to be subdued as potential buyers remain hesitant, according to real estate agencies.
"Demand for landed houses remains robust as it always has been," said Jones Lang LaSalle (JLL) Indonesia research head Yunus Karim in a media briefing at the property services company’s offices on Wednesday.
“Moreover, the government's [value-added tax] incentive has been very successful in boosting sales, particularly for landed houses,” said Yunus.
The Finance Ministry recently issued a regulation that extends the value-added tax (VAT) incentive program aimed at stoking demand at a time when high interest rates make mortgages more costly.
Read also: Government announces stimulus to boost property market
The program waves the 11 percent VAT until the middle of this year and reduces it by half to 5.5 percent in the second half of 2024.
The VAT waiver or reduction only applies to the first Rp 2 billion (US$127,000) of the total price of commercial residential properties valued at no more than Rp 5 billion.
