Home Affairs Minister urges local governments to support subsidised housing development

Jayapura (ANTARA) - Minister of Home Affairs Muhammad Tito Karnavian is urging regional governments to continue supporting subsidised housing development through policies that waive the Land and Building Acquisition Duty (BPHTB) and provide free Building Approvals (PBG).

"These concessions will encourage developers to build more homes for low-income communities," he said in Jayapura on Monday.

According to him, the housing sector has a significant multiplier effect on both regional and national economic growth. Therefore, the government needs to create a conducive climate for investment and housing development by the private sector.

"We must continue to support developers so they can build more houses for the people, especially those earning around Rp4 million to Rp5 million who need access to affordable home financing," he stated.

"If BPHTB and PBG are free, construction costs become cheaper, automatically encouraging developers to build more houses. The impact is not only on the housing sector but also stimulates the economy and creates jobs," he said.

He added that housing development would also provide fiscal benefits for regional governments because land that was previously vacant and contributed limited tax revenue would generate receipts from Land and Building Tax (PBB) as well as other economic activities once developed into residential areas.

"We must encourage a climate of private-sector house building. Vacant land yields relatively small tax, but when developed into housing, it will generate revenue from land and building tax and greater economic activity," he remarked.

Head of the Central Statistics Agency (BPS) Amalia Adininggar Widyasanti said the need for housing in Papua remains quite large. Based on BPS data, there are still around 38,000 households in Papua that do not own a home, with the largest number in Jayapura City.

"The demand for housing in Papua is still high; there are still around 38,000 households without a home and the highest number is in Jayapura. Therefore, subsidised housing development is very important to meet the community’s needs," she said.