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Tax waiver to boost home sales, but developers want clear blueprint
Builders are calling for more detailed guidelines on the execution of the housing program to align their business strategies accordingly.
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An aerial view shows a subsidized housing complex in Puuwatu district of Kendari, Southeast Sulawesi, on Aug. 1, 2024. (Antara/Andry Denisah)
T
he government has introduced financial incentives for low-income homebuyers as part of its strategy to boost housing demand and meet President Prabowo Subianto’s ambitious target of constructing 3 million homes a year.
Developers have welcomed the initiative as a potential catalyst for increased property sales, but also called for more detailed guidelines on the execution of the housing program so they could align their business strategies accordingly.
On Monday, Home Minister Tito Karnavian, Public Housing and Settlements Minister Maruarar “Ara” Sirait and Public Works Minister Dody Hanggodo signed a joint ministerial decree aimed at helping low-income individuals afford property.
The regulation includes waivers for the land and building rights acquisition (BPHTB) tax and for the building development approval (PBG) fee, both of which are normally required payments to regional governments for house purchases.
Tito explained that the exemptions were available for individuals earning up to Rp 10 million per month in the Papua region or Rp 8 million in other regions and applied to houses with a floor area of no more than 36 square meters if purchased from developers or 48 sq m if built independently.
The policy is set to take effect next month and to be implemented through regulations issued by regional heads.
Maruarar explained that the incentives aimed to boost the purchasing power of low-income individuals, which in turn would drive the house-building to meet President Prabowo’s target of adding 3 million homes per year.
