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Tax Incentives May Boost Property Sector Growth In 2025
Thursday, 07 Nov 2024
The property sector is projected to experience growth in 2025, following a substantial reset in the market caused by the pandemic, which resulted in a four-year period of stagnation. This information was conveyed by Ishak Chandra, the CEO of PT Perintis Triniti Properti Tbk (TRIN), during a media event held at his Jakarta office on Thursday, November 31, 2024.
Ishak pointed out that property cycles typically recur every 8 to 10 years and are significantly affected by political events, such as elections. Prior to the pandemic, it was expected that the property sector would see growth in years ending in 9, like 2009, while experiencing declines in years ending in 4, such as 2014.
"Consequently, 2019 was anticipated to witness growth in 2020. However, this did not materialize due to the pandemic," Ishak elaborated. The pandemic impeded the property sector's progress in 2020, 2021, 2022, and 2023, necessitating a period of adaptation in light of the upcoming 2024 elections.
Following the pandemic and the elections, a transition in the property cycle is anticipated, paving the way for growth in 2025. "We hope that no obstacles will arise. If conditions remain favorable, property prices are expected to increase," Ishak remarked.
Nonetheless, this forecast for growth is contingent upon government support through incentives such as Value Added Tax (VAT) and Land and Building Acquisition Duty (BPHTB).
In the coming year, VAT may rise to 12%, while BPHTB is projected to range from 2.5% to 5%, depending on the region. "Finally, I would like to stress the importance of establishing appropriate regulations concerning foreign ownership," he concluded.
