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Insight In News
Indonesian Highlights and Insights in News
Indonesian Highlights and Insights in News
Govt_Politic
Government To Remove Tax On House Purchase, Price Can Decrease By 21 Percent
Thursday, 21 Nov 2024
By reza@insightinnews.com The government, in collaboration with PT Bank Tabungan Negara (Persero) Tbk, has outlined several solutions to accelerate the implementation of the 3 million housing program in Indonesia. One of the key proposals includes the elimination of various tax levies to reduce housing costs, particularly for low-income communities (MBR). The 3 million housing initiative is a priority program aimed at providing housing for the public, especially for MBR. The Minister of Housing and Settlements, Maruarar Sirait, has suggested the exemption of the 11 percent value-added tax (VAT) and the 2.5 percent income tax (PPh) for the 3 million housing program. This proposal to the Ministry of Finance is intended to facilitate access to affordable housing for MBR. "We hope that the Ministry of Finance will consider the exemption of VAT and PPh; if we truly want to support the underprivileged, they should not be subjected to taxation," stated Maruarar Sirait. Furthermore, he mentioned that he has reached an agreement with the Ministry of Home Affairs to waive the land and building acquisition duty (BPHTB) imposed by local governments. If land distribution can be conducted at no cost or at a low price, and if it is managed efficiently with simplified licensing, Maruarar believes that the 3 million housing program will not only benefit MBR but will also significantly enhance the income and turnover of developers. On the other hand, Minister of Home Affairs Tito Karnavian announced plans to conduct socialization regarding the elimination of BPHTB for low-income communities (MBR) to local governments and developers in the region. In addition to the exemption from BPHTB, Tito also revealed intentions to abolish the Building Permit Fee (PBG) specifically for MBR in the near future. "I will issue a circular within a maximum of 10 days to eliminate the PBG fee for MBR to avoid any confusion," he stated on Saturday. He noted that the MBR housing program has been mandated by President Prabowo Subianto and must be implemented by the Ministry of Public Works and Housing. "We urge local governments to foster a social solidarity movement to assist those in need," Tito added. The Minister of Agrarian Affairs and Spatial Planning/Head of the National Land Agency (ATR/BPN), Nusron Wahid, also mentioned that his agency would request developers to construct public and social facilities within their housing projects. Developers who fail to comply are expected to face penalties in the form of providing free housing for low-income individuals. Additionally, BTN President Director Nixon LP Napitupulu indicated that with the tax reductions, the cost of purchasing MBR homes could decrease by up to 21 percent. Recently, he noted, there has been an increasing number of millennials, women, and informal sector workers purchasing their first homes through mortgage loans. Consequently, the prospects for Indonesia's housing sector are anticipated to be very promising in the future.
