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Developers push government for luxury residence incentives
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Construction workers erect the frame of a new apartment building on Jl. Margonda in Depok, West Java, in this undated photograph. (Antara/ Indrianto Eko Suwarso)
R
eal Estate Indonesia (REI) is urging the government to fulfill its promise to introduce fiscal incentives for the development of luxury residences early this year, as part of its efforts to boost property sales and trigger growth in other sectors.
“The incentives should be introduced immediately so it will have significant impact. Otherwise, the impacts will be less significant and the condition of the property industry will worsen,” REI chairman Soelaeman Soemawinata said in Jakarta on Sunday, as reported by kontan.co.id.
Soelaeman was referring to the government's plan to issue a Financial Ministry regulation in early 2019 to cut value-added tax (VAT) for luxury apartments and houses.
He pointed to four aspects that could affect the property industry: government regulations, bank financing, special financing plans and infrastructure development.
In the planned regulation, the government intends to revise upward the floor price of luxury properties that carry a VAT of Rp 20 billion (US$1.11 billion) to Rp 30 billion.
Center for Indonesia Taxation Analysis (CITA) executive director Yustinus Prastowo shared Soelaeman‘s view, and stressed that the government needed to issue the regulation immediately.
Yustinus also believed that the policy would have a significant impact on the property industry that would positively affect other industries.
Growth in the property industry would in turn trigger growth in construction services as well as downstream industries, and would create more jobs. (bbn)
