Indonesia introduces new luxury levy to boost sales of high-end condos
In an attempt to stimulate the economy, the local government decided to increase the luxury tax threshold limit
According to the Financial Review, Indonesia has made it easier for investors to own luxury condominiums by increasing the luxury tax threshold limit. The Finance Ministry revealed that the luxury levy will be applicable for high-rise condos and bungalows worth IDR30 billion (USD3 million) or more.
Before the amendment of the maximum threshold, the said levy applied to townhomes with a land title worth IDR20 billion and above, along with townhomes, apartments and condos without a land title worth IDR10 billion or more.
Since the drawn-out US-China trade war and declining global growth has diminished the country’s overall outlook, President Joko Widodo wanted to reignite Southeast Asia’s largest economy by providing tax breaks to the real estate sector. In response, Bank Indonesia has started easing housing loan rules, which surged interest rates six times in 2019.
“The new rule will help make housing prices more attractive, reduce the burden on home buyers and trigger growth in the property sector,” explained the secretary-general of the Indonesia Real Estate Association Paulus Totok Lusida.
More: Indonesia’s new regulations could make or break the property sector
With the introduction of this new luxury levy, Anandamaya Residences by ASTRA Property & Hongkong Land has already started preparing for an influx of demand. They received the Best Luxury Condo Development (Asia) title at 14th PropertyGuru Asia Property Awards Grand Final 2019 and the Best Condo Development (Indonesia) title at the 5th PropertyGuru Indonesia Property Awards 2019.
Other high-end developers who have been waiting for this positive investment climate to come in the wake pandemic include SQ RÉS by PT Intiland Development, The Smith Office SOHO Residence by Triniti Dinamik, Pollux Sky Suites by AESLER and Arumaya by ASTRA Property & Hongkong Land – all of which garnered awards at the 5th PropertyGuru Indonesia Property Awards 2019.
In the past half a decade, Paulus shared that the growth with regard to the value of homes built remained at below five percent. He added that the association is anticipating the growth to increase 10 percent in 2020, encouraged by the new regulation and the previous loan-to-value policy easing by Bank Indonesia.
Know of any award-worthy homes, condos, flats or other real estate projects in Indonesia? Nominate them for the 6th Indonesia Property Awards on or before 28 August 2020! Simply visit asiapropertyawards.com/en/award/indonesia-property-awards/ for more details.
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