Indonesia: REI : Apartment Tax Hurts Property Sector

• Apr 10, 2017

TEMPO.CO, Jakarta – Real Estate Indonesia (REI) asked the Indonesian Government to cancel its plans in implementing a special task for empty and unrented apartments. According to REI Secretary General of the Central Board, Paulus Totok Lusida, the plan can have negative implications on the industry’s development and national economy.

Other than that, Paulus said, property investors who enter through the tax amnesty program will dread the policy. “The property industry is related to other 150 businesses, don’t slow us down just as we’re trying,” Totok told Tempo on Sunday, April 9, 2017.

According to Totok, REI was once asked by the government to discuss the progressive tax levy for idle and unused apartments. He says that after canceling the progressive tax levy for unoccupied lands, the government targeted to tax unoccupied apartments.

REI has urged State Officials to review the definition and criteria for empty or vacant apartments. The majority of apartment buyers, according to Paulus, uses these assets as a second home or as an investment. “The definition of occupied can mean a number of things. Such as myself who often travels back and forth to my apartment in Jakarta, which is more incidental. Does it mean that my apartment would be categorized as an unoccupied dwelling during certain moments?”

Previously, the Finance Ministry said that they would issue a tax policy to reduce discrepancies of land, speculations, and unproductive lands. The National Land Agency (BPN) suggested three issues to the ministry, include progressive tax for land ownership; empty, unoccupied, and unrented apartment taxes; and the last is the capital gain tax.

The Agrarian and Spatial Planning Minister, Sofyan Djalil, stated that the policies will not be implemented in the near future. “The condition of the property industry is in a difficult circumstance currently, we’re cooling down the idea,” Sofyan said.

Source: https://en.tempo.co/read/news/2017/04/10/056864360/REI–Apartment-Tax-Hurts-Property-Sector