Evaluating the Effectiveness of Government VAT Incentives on Property Markets in 2021 and 2025

• The effectiveness of the government’s VAT incentive policy for the property sector varies depending on current economic conditions.
• The 2021 VAT incentive policy significantly boosted home sales and mortgage growth, while the 2025 policy has been less effective.
• The 2021 policy offered full or partial VAT exemptions based on property price, leading to a 223.6% increase in commercial housing sales and higher mortgage growth.
• The 2025 policy reinstated a 100% VAT exemption for homes priced below Rp 5 billion but has not produced similar results.
• An integrated policy approach is needed, considering both property prices and installment affordability.

Source: thejakartapost.com

Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.

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