Government Prepares Massive Fiscal Incentives to Support 3 Million Houses Programme

The government is preparing various fiscal incentives and monetary relaxations to expedite the implementation of the 3 Million Houses Programme for the people, including up to 100 per cent exemption from Value Added Tax (VAT) and interest rate reductions through government subsidies to ensure access to decent housing for low-income households. “This policy is part of the red carpet for MBR (low-income households) to strengthen purchasing power, facilitate access to decent housing, and carry out the President’s directive to side with the little people,” said the Head of the Presidential Staff, Muhammad Qodari, at the Presidential Palace complex in Jakarta on Wednesday. This strategic step also involves a zero per cent exemption on Land and Building Acquisition Duty (BPHTB) for certain community groups. The government hopes that the elimination of these costs can significantly reduce the initial burden for people who want to own their first home. The banking sector is also supporting through the relaxation of the Statutory Reserve Requirement (SRR) by Bank Indonesia from 5 per cent to 4 per cent. This macroprudential liquidity incentive policy provides liquidity allocation of up to Rp80 trillion to support the distribution of commercial and subsidised home ownership credit. The government is also launching a Housing Programme Credit (KPP) worth Rp130 trillion with a fixed interest subsidy of 5 per cent. This financing scheme is designed to support the supply side by developers as well as the demand side by small and medium enterprises (UMKM) that want to build productive homes. The quota for the Housing Finance Liquidity Facility (FLPP) distribution in 2026 has also recorded the largest increase in history. President Prabowo has ordered an increase in the quota from 220,000 units to 350,000 units with a down payment or DP scheme of 1 per cent. This housing programme targets 13 beneficiary professional groups, including teachers and civil servants throughout Indonesia.