Government Considers Imposing High Tax on Landed House Development

JAKARTA. The government is proposing to impose a high tax on the development of landed houses (rumah tapak). The goal is to encourage the public to shift toward vertical housing, such as flats or apartment buildings.

This was conveyed by the Deputy Minister for Housing and Settlement Areas, Fahri Hamzah. As reported by CNBCIndonesia.com, the high tax imposition is intended to reduce the demand for landed houses.

Moreover, according to Fahri, there are no longer any landed houses in urban areas across the world. “We must stop building landed houses in urban areas because we no longer have land,” Fahri stated on Saturday (7/6)

READ: The VAT Incentive for Landed Houses and Apartments is Extended Until the End of 2025.

On the other hand, he proposed that the government provide subsidies for the purchase of vertical housing. This is because interest in vertical housing in Indonesia remains low.

However, the subsidy should not be given directly to buyers or end consumers. Instead, it should be allocated for land and licensing costs, which would reduce overall expenses.

For context, the government has frequently provided tax incentives in the form of Value Added Tax (VAT) borne by the government (DTP).

In fact, in February 2025, the government extended the VAT facility until December 31, 2025. This policy is stipulated in Minister of Finance Regulation No. 13 of 2025 (PMK 13/2025), which took effect on February 4, 2025. (ASP/KEN)