June 19, 2019 / 7:33 AM / 2 months ago

Indonesia eases luxury sales tax for property to boost sales

JAKARTA, June 19 (Reuters) - Indonesia said on Wednesday it has raised the price threshold at which luxury sales tax is applied to houses and apartments to support the property sector and encourage home buying.

The 20% tax now applies only to any purchase of a landed property or apartment worth at least 30 billion rupiah ($2.10 million), the office of the cabinet secretary said in a statement on its website.

The previous threshold for a landed property was 20 billion rupiah, and 10 billion rupiah for an apartment.

Indonesia’s central bank last year eased rules on mortgage downpayments to spur growth in the sector and keep economic growth momentum. But it rolled out the stimulus with a total of 175 basis points of interest rate increases that were intended to stem foreign capital outflows.

As a result, Bank Indonesia’s survey showed the pace of annual increase in residential property prices actually decelerated since the first quarter of 2018.

$1 = 14,270.0000 rupiah Reporting by Tabita Diela and Gayatri Suroyo Editing by Jacqueline Wong

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