Tax Incentives Expected To Boost Property Sector Growth

Friday, 08 Nov 2024

By ferry@insightinnews.com The property market is poised for a resurgence in 2025, emerging from a substantial reset prompted by the pandemic, which led to a four-year period of stagnation. Ishak Chandra, the esteemed CEO of PT Perintis Triniti Properti Tbk (TRIN), conveyed this insight during an exclusive media event held at his Jakarta office on Thursday, November 31, 2024. Ishak elaborated on the cyclical nature of the property market, which typically experiences fluctuations every 8 to 10 years, significantly influenced by political dynamics such as elections. Prior to the pandemic, it was widely anticipated that the sector would flourish in years concluding with a 9, such as 2009, while downturns were expected in years ending with a 4, like 2014. "Thus, 2019 was expected to herald growth in 2020. What thwarted this expectation? The pandemic," Ishak articulated. The sector faced considerable challenges throughout 2020, 2021, 2022, and 2023, necessitating a recalibration in light of the upcoming 2024 elections. In the aftermath of the pandemic and subsequent elections, a transformative shift in the property cycle is anticipated, paving the way for growth in 2025. "We remain hopeful that no obstacles will impede this trajectory. If conditions align favorably, we can expect an increase in property prices," Ishak remarked. Nonetheless, this optimistic forecast hinges on robust government support through incentives such as Value Added Tax (VAT) and Land and Building Acquisition Duty (BPHTB). Looking ahead, VAT may rise to 12%, while BPHTB is projected to range between 2.5% and 5%, contingent upon regional factors. "Finally, I must stress the importance of establishing sound regulations concerning foreign ownership," he concluded.

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