Delay ownership transfer tax law until 1999: REI

JAKARTA (JP): Real Estate Indonesia (REI), an association of Indonesian developers, asked the government yesterday to delay introducing a tax on land and building transfers until January 1999.

Speaking after meeting President Soeharto, REI chairman, Edwin Kawilarang said the one-year delay would give developers time to prepare.

The new tax approved by the House of Representatives recently was to be introduced next January. The government is preparing guidelines for enforcing the new law.

The law allows the government five percent tax for ownership transfers of houses and buildings with market prices more than Rp 30 million (US$12,766). This tax is in addition to the existing property tax.

But REI proposed that the taxable value of the houses or land should not be stated in a law, which generally contains general stipulations. "It should be in a government regulation, which is more flexible," he said.

The association said the government should raise the minimum taxable limit from Rp 30 million to Rp 50 million so as not to burden the public, particularly home buyers.

"The government should also reduce property taxes to help the common people buy homes," he said.

Property analyst Panangian Simanungkalit said the new tax could further reduce people's purchasing power.

"Most people here are first time home buyers. They can only buy at prices below Rp 100 million. Besides we have to consider the price increase of 15 percent to 25 percent for houses and 20 percent to 40 percent for land a year," he said.

So the government should raise the taxable value of the new tax from Rp 30 million to Rp 100 million, he said.

Meanwhile, State Minister of Agrarian Affairs/Chairman of the National Land Agency, Soni Harsono, reported to President Soeharto that his ministry had granted land acquisition permits for 121,000 hectares of land to developers in Greater Jakarta.

"But developers have still only cleared 71,000 hectares," he said.

He said the government would transfer 7,000 hectares of the uncleared 50,000 hectares to other developers. (bnt)