DKI Jakarta Provincial Government Gives Discount on Land and Building Tax

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The DKI Jakarta Provincial Government applies for discounts and exemptions from Land and Building Tax (PBB) obligations for its citizens. This policy is considered can maintain the trend of rising house prices in the capital city.

The Land and Building Tax discount policy is contained in Governor’s Regulation Number 23 of 2022 concerning the Policy on Determination and Payment of Rural and Urban Land and Building Taxes as an Effort for Economic Recovery in 2022.

In the regulation, it is stated that the object of PBB is in the form of a landed house with an NJOP value below Rp.

For landed houses above Rp. 2 billion, relief is given in the form of a 10 percent discount. Meanwhile, buildings other than landed houses are given an exemption of 15 percent.

Governor Anies Baswedan said the policy would relieve 85 percent of Jakarta residents. However, this incentive makes the DKI Provincial Government lose regional revenues of Rp. 2.7 trillion.

“So, around 2.7 trillion rupiahs in total taxes from housing that the government usually received before this policy, can be saved by residents for their economic interests,” said Anies.

Furthermore, Rumah123.com Country Manager Maria Herawati Manik noted the growth in prices and supply of landed houses, especially secondary houses in Jakarta, which continued to increase slightly month on month. In August, the price of used houses in Jakarta increased by 0.5 percent from July 2022.

Maria said the market’s interest in owning a secondary house could increase along with the tax incentives from the DKI Provincial Government.

“The giving of PBB discounts for various types of houses with several different NJOP (Tax Object Sales Value) can certainly encourage increased interest in buying landed houses, especially secondary,” said Maria, Tuesday (6/9/2022).

On the other hand, the DKI Provincial Government stated that as many as 1.2 million houses in Jakarta have NJOP below Rp. 2 billion so 85 percent of residents and buildings in Jakarta can be free from PBB.

“This figure is certainly quite large, so the impact of the PBB discount program from the DKI Jakarta Provincial Government can provide extraordinary and sustainable benefits to be able to maintain the trend of house prices in Jakarta for the next few years,” he said.

On the other hand, DPD Chairperson of the DKI Jakarta Indonesian Real Estate Brokers Association (AREBI) Clement Francis sees that the policy has not been able to encourage an increase in residential demand.

“If it is only the PBB, the impact will not be too significant. For the property sector, sales will not be significant. So there is no impact to developers, but it is also quite helpful for the community,” said Clement as quoted on Tuesday (6/9/2022).