Home Affairs Minister: BPHTB Exemption Aimed at Driving Regional Economy

Home Affairs Minister Muhammad Tito Karnavian has said the policy of exempting Land and Building Rights Acquisition Fees (BPHTB) for low-income communities (MBR) is directed at driving the regional economy through housing construction activity. “Previously, they had to pay 5 percent of the Tax Object Sales Value (NJOP). Now it is free, specifically for low-income communities. With the circulation of money, all developers will move. Because the costs are cheaper, they are motivated,” he said during a visit in Bandung, West Java, on Saturday.

He said the government has prepared the basis for implementing the policy through a memorandum of understanding (MoU) and a joint circular between the Ministry of Home Affairs and the Ministry of Housing and Settlement Areas (PKP), which serves as a guideline for regional governments. “We have established cooperation, an MoU, and a joint circular which essentially concerns the Land and Building Rights Acquisition Fees (BPHTB),” he said.

He explained that the BPHTB, previously set at 5 percent of the Tax Object Sales Value (NJOP), is now waived for MBR, while the Building Approval (PBG) fee for this group has also been set to zero. In addition, the government is expanding the income criteria for MBR so that more people can take advantage of various incentives in the housing programme.

Tito added that the increase in housing development will trigger transactions in various sectors, from building materials to transportation services, which will ultimately help increase regional revenue through levies.