Gov’t Readies Rp33.1 Trillion to Revive Housing Sector This Year
Date 10 Maret 2021
The Government has announced it is prioritizing housing sector to be immediately revived as it has a huge multiplier impact on other sectors.
According to Minister of Finance Sri Mulyani Indrawati, the Government has set aside a budget of Rp33.1 trillion from the State Budget for the sector this year.
“(The budget includes for) savings-based house financing aid and state budget spending through aid for self-help housing stimulus, construction of low-cost apartments, construction of special houses and simple low-cost apartments, public houses, down-payment subsidies for 4 million houses, interest rate subsidies for low-income populations. The State Budget also uses transfer instrument to the regions in the form of Physical Special Allocation Funds for self-help housing constructions, as well as provides revolving funds for house-financing liquidity,” the Minister said as quoted from the website of Ministry of Finance, Wednesday (10/03).
The Government, she added, has also appointed secondary mortgage market company PT Sarana Multigriya Finansial as the Special Mission Vehicle of Ministry of Finance in the housing sector through state equity participation.
Citing data from the Financial Services Authority (OJK), the former World Bank Managing Director pointed out that property ownership credit only grew 2.8 percent, much lower than the average in the past 3 years that always grew above 10 percent.
To that end, to increase interest in house purchase, she added, the Government will bear the Value Added Tax (VAT) of landed houses and low-cost apartment units as per Regulation of Minister of Finance Number 21 of 2021.
The Minister further said that the Government will bear the VAT of purchases made from March to August of the 2021 Assessment Year, adding that for a maximum purchase of Rp2 billion, the Government will bear 100 percent of the VAT, whereas for houses with a price above Rp2 billion to up to Rp5 billion, the Government will bear 50 percent of the VAT. (PR of Ministry of Finance/UN) (DH/EP)