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Boosts Investment, Government Provides 5 Incentives for Property Sector

Jakarta, 24/06/2019 MoF - Head of the Fiscal Policy Agency (Head of BKF) Suahasil Nazara conveyed information about fiscal incentives to boost investment in the property sector at the APBN KiTa (State Budget Performance and Facts) press conference on Friday (21/06) in Djuanda Hall Juanda I building Ministry of Finance, Jakarta.

The government issued a policy package consists of 5 points for the property sector. First is the limit that is not subject to VAT of a simple house according to the area. Second, exemption from VAT on houses / buildings of natural disasters victims. Third, the increase in the limit of luxury residential values ‚Äč‚Äčimposed by PPh (Income Tax) and PPnBM (Sales Tax on Luxury Goods) from IDR 5-10 billion to IDR 30 billion. Fourth, the reduction in the rate of Article 22 Income Tax on luxury dwelling from 5% to 1%. Fifth, simplification of the PPh validation procedure for land / building sales from 15 days to 3 working days.

He explained, the property sector in the macro economy is recorded as an investment because it is considered a long-term item that produces multiplier effects because it is related to many services and industries that drive the economy.

"If we want to stimulate investment, one of them is to pay attention to the property sector as an economy that generates a multiplier effect. The property sector deals with almost all sectors that are important to the economy. It is related to the construction, financial services, trade, information and communication sectors, corporate services even the food industry, transportation, warehousing, etc.," he explained.

He added, luxury properties need to be given incentives so that developers have higher profits (profit margins) to build medium and simple houses. (nr/ds)