The government of Indonesia has unveiled a comprehensive package of incentives aimed at rejuvenating the country’s property sector. One of the key initiatives in this package is the Value-Added Tax (VAT) Covered by the Government, or PPN DTP, which will be in effect from November 2023 to December 2024. This measure is designed to stimulate demand, with a focus on house priced below Rp2 billion.
Finance Minister Sri Mulyani Indrawati elucidated the essence of this incentive, highlighting that the government will shoulder the entire VAT, translating to a 100% exemption for the purchase of new homes valued under Rp2 billion.
This exemption will be applied at a rate of 100% from November to December 2023 and from January to June 2024. Subsequently, from July to December 2024, the government will continue to cover 50% of the VAT, providing ongoing support for the property market.
In concrete terms, the government has allocated Rp300 billion for the PPN DTP program in 2023 and a more substantial amount of Rp1.7 trillion for 2024. This sizable allocation underscores the government’s commitment to revitalizing the property sector and reinvigorating the enthusiasm of both homebuyers and property developers.
In addition to the PPN DTP, the government is extending its support to low-income households by offering a substantial administrative cost subsidy. Beginning in November 2023 and continuing until December 2024, low-income families will receive a financial boost of Rp4 million, ensuring that they can navigate the property market more comfortably.
To facilitate this initiative, the government has earmarked a substantial budget of Rp1.2 trillion for administrative cost assistance. This budget is further divided, with Rp300 billion allocated for the year 2023 and a substantial Rp900 billion set aside for 2024.
Moreover, the government is widening the scope of its support by increasing the maximum price of homes eligible for these benefits. Specifically, house designated as “subsidized” will now extend to those priced up to Rp350 million, encompassing both landed and apartment-style residences. This move not only benefits aspiring homeowners but also enhances the attractiveness of the property market for low-income families.
The commitment to supporting underprivileged communities does not stop here. The government has set its sights on bolstering its Integrated Prosperous Housing program, intending to provide an additional 1,800 households with financial support from November to December. Each household will receive a subsidy of Rp20 million, further underscoring the government’s dedication to creating more inclusive housing opportunities for the less fortunate.
These house initiatives represent a comprehensive and strategic approach to boosting the property sector in Indonesia, thereby contributing to the nation’s economic growth and the welfare of its citizens.