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VAT waiver to have little effect on apartment sales this year: Colliers
The property consultancy expects the government's move to extend the property VAT incentive through 2025 will have minimal effect on overall apartment purchases this year.
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High-rises, including bank-owned buildings, stand in downtown Jakarta beneath clear skies on Aug. 27, 2021. (AFP/Bay Ismoyo)
T
he government’s decision to extend the value-added tax (VAT) waiver for residential property purchases until this year is expected to have minimal impact on boosting apartment sales in Jakarta, according to property consultancy Colliers Indonesia.
Although the policy is intended to stimulate demand, the data show that its implementation has yet to yield significant results to date, with the trend was expected to continue through 2025.
“Even with extended VAT incentives, sales figures remain modest for apartments,” Colliers Indonesia research head Ferry Salanto said on Wednesday, as quoted by Kumparan.
“This policy is unlikely to bring a substantial impact on apartment unit sales, even up to 2025,” he added.
Read also: Developers to focus more on low-segment homes amid govt incentives: Consultant
The government decided in December to extend the tax incentive for home purchases until the end of 2025.
The facility fully waives VAT until mid-year, after which it is to be reduced by half, but applies only to a maximum tax amount of Rp 2 billion (US$127,000) for residential properties with a maximum sales value of Rp 5 billion.
