Jakarta – Real Estate Indonesia (REI) has rejected the government plan to impose taxes on vacant apartments as it will discourage investment in the sector.
REI secretary general Paulus Totok Lusida said such a policy was not in line with the government's campaign to attract investors, including participants of the tax amnesty, who were invited to put their money in the property sector.
"Don't introduce a policy that could discourage [investment in the property sector]. The property business relates to 150 other businesses," said Paulus as reported by tempo.co on Monday.
Paulus disclosed the result of the meeting between representatives of REI and the government to discuss the progressive taxes for idle plots of land. During the meeting, the government representatives expressed their wish to tax vacant apartments.
Paulus said the majority of people bought apartments as second homes or only for investment. He also question[ed] the definition of vacant apartments. "If I frequently visit Jakarta and stay in my apartment, is my apartment vacant?" he said.
In an unconfirmed document dated in April, the Finance Ministry proposed three choices of policies to Agrarian and Spatial Ministry or National Land Agency (BPN): progressive taxes from ownership of idle land, taxes from vacant apartments and taxes from capital gain.
Meanwhile, Agrarian and Spatial Minister Sofyan Djalil said that such a policy would not be implemented in the near future. "We will rethink such a policy because property is having a difficult time now. We will discuss it further," he added. (bbn)