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Govt should consider extending property VAT waiver to maintain demand, Colliers says
The government implemented the policy in 2021 and has extended the policy ever since with a mix of full and half waivers.
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House for lease: A man walks on Jan. 26 past the Sentra Mulya Jaya low-cost apartment in Cipayung, East Jakarta. Built as a joint project managed by the Social Affairs Ministry and the Public Housing Ministry, the apartment is available for low-income families to rent at Rp 100,000 (US$6) per month. (Antara/Asprilla Dwi Adha)
T
he government may want to consider extending its 100 percent waiver on value added tax (VAT) for property sales to maintain demand amid a prolonged high interest rate environment, property consultancy Colliers Indonesia said on Wednesday.
The full waiver ended in June with the government only providing a half of tax cut in the second half of this year.
The government first implemented the waiver policy in 2021 and extended it until this year with a mix of full and half waivers.
Colliers said in a press briefing on Wednesday that the incentive had fueled a surge in landed house sales. Apartment sales had not experienced the same demand.
“The incentives have not significantly impacted apartment sales, leading some developers to delay launching new apartments and focus on landed houses instead, where demand remains strong,” Colliers Indonesia head of research Ferry Salanto said.
Read also: Tax incentive boosts sales of houses, apartments
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.
