TEMPO.CO, Jakarta-The Financial Services Authority (OJK) will regulate the sharia real estate investment funds (REIT). Nurhaida, OJK board member for capital market supervision, said the bill is currently being discussed, and the regulator is targeting for it to be issued before the end of this year.
Nurhaida said the regulation is aimed at increasing the amount and types of sharia investment products to attract investors to the sharia financial market.
Muhammad Touriq, the OJK's deputy director for sharia capital market, said that sharia REITs are pretty much similar to conventional REITs, with the exception that the secured assets must be those with sharia principles, with a maximum threshold of 10 percent.
A meeting between the Coordinating Ministry for Economic Affairs, the Finance Ministry, the OJK, and Real Estate Indonesia (REI) in early March resulted in a REIT tax rate of just 1.5 percent, consisting of a 0.5-percent income tax on final capital gain and a 1.0% duty tariff for land and building acquisition (BPHTB).
Real estate and property businesses business are happy with the decision, and said they are ready to bring home their assets currently placed in Singapore. REI chairman Eddy Hussy said that the REIT tax cut to 1.5 percent will attract more developers to expand their businesses domestically.
Eddy said a number of institutions are ready to deposit Rp30 trillion worth of funds once the tax cut is applied. "But I think the amount would be more than that," he said.
DIKO OKTARA | ANDI RUSLI
