JAKARTA – Jakarta provincial government has officially removed the fees for acquisition of land and buildings (BPHTB) for a home or building with a taxable value (NJOP) to IDR2 billion. This regulation will allow low-income people to afford house.

The provision is included under Gubernatorial Regulation No 193/2016 on the 100% Exemption of BPHTB For Sale-Buy or Granting the First Right and / or Imposition of 0% BPHTB For the Heritage or Grant Will with the NJOP up to IDR2 Billion.

The regulation, which was enacted on 21 October 2016 stipulates the exemption of acquisition fees or BPHTB to individual taxpayers, who obtain right of land of building through first time right purchasing/granting with a tax valuable (NJOP ) to IDR2 billion.

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The gubernatorial regulation is part of mandate of Presidential Instruction No. 5/2016 on the Granting of Reduction or Relief or Tax Exemption of BPHTB and Permits for Building Houses Public For Low Income People that was signed by President Joko Widodo on 7 June 2016.

Property analyst Ali Tranghada said that the regulation on exemption of acquisition fee for a home with NJOP up to IDR2 billion may boost sales of houses in Jakarta, mainly the houses with the value of NJOP up to IDR2 billion. In Jakarta, this rule will open up market opportunities second hand houses. "The secondary market will move," he told KONTAN last weekend.

Property analyst Erwin Kallo added that this policy is a kind of incentive for property industry and low-income people. The regulation will allow the low-income people to have an easier access for home ownership. "Property entrepreneurs may also be easier to sell the property as the sale price can be lowered," he said.

Chairman of the Association of All Indonesia Housing and Settlement Developers (Apersi) Eddy Ganefo adding, the policy will have an impact on the property sector in Jakarta. According to him, the exemption of acquisition fee or BPHTB for the property with a tax valuable below of IDR2 billion will help lower-middle income people to afford house. "It is difficult to find house with a tax valuable (NJOP) below up to IDR2 billion in the city center, but there are some in the outskirts area," he explained.

(MUHAMMAD FARID/Translator)