In line with the recently unveiled economic policy package, Indonesian Finance Minister Bambang Brodjonegoro said that the government plans to revise its luxury tax policy for houses. Currently, houses worth over IDR 2 billion (approx. USD $140,000) are subject to a 20 percent luxury tax. The government now plans to raise this threshold to IDR 10 billion (approx. USD $700,000). Indonesia’s luxury tax was introduced in Suharto’s New Order regime in an effort to curtail inequality within Indonesia’s society.
By revising the luxury tax for houses, the government aims to increase people’s purchasing power and lure investors to develop new property projects.
Without providing a specific time-frame, Brodjonegoro said the tax will be revised as soon as possible.