Subsidized Houses are Now Tax-Free

TEMPO.CO, Jakarta - Good news for house hunters—especially those in search for subsidized houses. The government has now exempted subsidized house buyers from paying value-added tax (VAT), a policy set in the Finance Minister Regulation No.113/PMK/0.3/2014.

Sri Hartoyo, Finance Ministry's deputy for financing, said yesterday that the policy is aimed at pushing developers to build subsidized houses for people with low-incomes. This is important considering the increasing need for housing along with Indonesia's growing population as well as the development of residential areas.

To prevent price volatility, she said, the government is applying price control for subsidized houses sales price from 2014 until 2018. That way, she said, the selling prices of the cheap houses will increase in accordance with the government's provisions provided no changes are made along the way.

Based on the regulation, the cheapest price of a subsidized home is in Java and Sumatra with Rp105 million per unit. "The highest price is in Papua and West Papua with Rp160 million," she said.

The Finance Minister's regulation differs from the one signed by Ministry of Public Housing. Previously, the Ministry of Public Housing set that subsidized houses are divided into four zones, with prices ranging from Rp113 million to Rp185 million per unit.

Earlier, Minister for Public Housing Faridz Djan said his ministry would not make any changes to the price scheme of subsidized housing despite the differences with what the Finance Ministry had set. The reason, he said, is that his ministry has already determined the terms for subsidized housing. In addition, Djan said, if a buyer wants to be exempet from sales tax, developers should be the ones to lower the selling price.

Djan said he was not involved in the price setting. To date, he also said, he has not received a notice from the Finance Minister about the decision.

ALI HIDAYAT | MOYANG KASIH DEWIMERDEKA