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Buy a House for IDR 5 Billion, Get Free PPN, Will RI Property Automatically Skyrocket?

Property entrepreneurs are responding to the government’s plan to provide subsidies for the property sector, namely free VAT tax. Entrepreneurs are warning that this subsidy program can be realized successfully. Currently, the regulations that provide the legal umbrella for this program are still in the process of being finalized.

This program repeats a policy that was implemented in August 2021, where the government provided a similar subsidy, namely VAT exemption for the purchase of a new house. However, there will be differences between the two.

“At that time, environmentally and people’s purchasing power dropped drastically due to Covid, then the environment was worrying, and people were doing a lot of calculations so that transactions were not appropriate,” said General Chair of the Indonesian Real Estate Central Leadership Council (DPP REI) Joko Suranto to CNBC Indonesia, Wednesday (8 /11/2023).

As is known, the government will provide subsidies for the purchase of new commercial homes, in the form of 100% value added tax (VAT) borne by the government (DTP). This means free VAT for house purchases worth less than IDR 2 billion. Houses worth up to IDR 5 billion also get this subsidy, but 100% DTP VAT is only for the first IDR 2 billion.

Not only from the external side, but external factors from the developer’s side influence property development. At that time, there were a number of restrictions that prevented the developer from moving much.

“The operations are still not supported so it is not measurable or predictable, both in terms of reporting and the system,” said Joko.

He also appreciated the government’s policy steps in this subsidy, including a form of government attention to the property sector, where this sector has not yet rebounded like other industries.

“We see this as confirmation of several suggestions made to the President and government regarding how to encourage property growth,” said Joko.

Not to forget, the Deputy General Chairperson of the REI DPP for Property Rules and Regulations, Ignesjz Kemalawarta, also assessed that the current condition of incentives is somewhat different from subsidies in 2021, one of which is related to licensing.

“In 2021, there is Covid and various licensing processes are just starting, such as PBG (Building Approval). At that time, REI was at the same time fighting to get the PBG/Regional to work. There were several obstacles related to the Covid situation and licensing,” said Ignesjz to CNBC Indonesia, Wednesday (8 /11/23).

“This year, Covid has finished. Hopefully, God will always give us good health, and various licensing obstacles have begun to be overcome, although not in all regions. However, the situation is better, hopefully the achievements can be higher. The main thing is that the impact on our economy is expected to be greater. good,” he concluded.

Source: CNBC Indonesia