Striving for Public Welfare, Ministry of PUPR Endeavors to Reduce Housing Backlog

subsidized house

Indonesia is fervently pursuing its visionary objective of uplifting the well-being of its populace by the year 2045. Central to this endeavor is the concerted effort to provide dignified living spaces while simultaneously tackling the persistent challenge of housing backlog. Minister of Public Works and Public Housing (PUPR), Basuki Hadimuldjono, stands at the forefront of this mission, ceaselessly striving to curtail the existing housing backlog, which currently looms at an alarming figure of 12.7 million units.

Minister Basuki expounded upon the collaborative strategy in conjunction with the National Development Planning Agency (Bappenas), elucidating, “Regarding the strategic reduction of the housing backlog, I am awaiting the guidance of Bappenas. Given that the planning horizon extends until 2045 on a macro scale, our course of action will closely align with the comprehensive strategies formulated by Bappenas.” This statement was articulated during the occasion of the National Meeting of the Real Estate Indonesia (REI) held in Jakarta on Wednesday, August 9, 2023.

However, Basuki appended the assertion that the housing backlog’s persistent existence is primarily attributed to the exorbitantly inflated housing prices. He underlined the pivotal role played by governmental subsidies in fortifying the purchasing power of potential property buyers, especially among the younger demographic.

“The current generation of youth is confronted with significant hurdles in acquiring their own homes. This predicament applies even to those gainfully employed, further emphasizing the necessity of subsidies to enable access,” he emphasized.

Presently, the government’s incentivized scheme encompasses properties valued within the approximate range of Rp200 million. A forward-looking vision from Minister Basuki encompasses extending the exemption of the Value Added Tax (VAT) to residences valued at Rp300 million.

“Yes, this expansion to include residences valued at Rp300 million is indeed under consideration. The existing initiative already embraces homes priced around Rp200 million. Given the trajectory of ongoing economic expansion, the envisioned extension of tax-free VAT benefits to housing within the Rp300 million range retains its viability. Consultations with the Ministry of Finance are in the pipeline,” he elaborated.

Furthermore, it is pertinent to underscore that an examination of the 2021 Susenas data underscores the formidable challenges at hand concerning the fulfillment of housing requirements in Indonesia. The burgeon of new households, reaching an annual estimate of 700,000 to 800,000, accentuates the intricacy of the situation.

In alignment with these daunting challenges, the Directorate General of Housing under the aegis of the Ministry of PUPR has embraced the National Medium-Term Development Plan (RPJMN) for 2020-2024 as a roadmap. This blueprint is dedicated to elevating the proportion of habitable homes, envisioning an ascent from the existing 56 percent to a commendable 70 percent by the year 2024.