The government provides various stimuli for the property sector to boost the economy, such as Government Borne Value Added Tax (PPNDTP) to lighter down payments.

PPNDTP: Tax Stimulus to Boost Purchasing Power

Among the important steps, the government decided to maintain the 100 percent Government Borne Value Added Tax (PPNDTP) facility for home purchases until the end of 2025. In fact, it was previously planned to drop to 50 percent in the second semester.

"We will discuss the technical details later," said Coordinating Minister for the Economy Airlangga Hartarto after attending a limited coordination meeting at the Coordinating Ministry for the Economy, Friday (25/7/2025).

This step is believed to maintain purchasing power, especially the middle class, which has been the backbone of the property market. Based on data from the Ministry of PUPR, the construction and real estate sector continued to grow positively by 4.5 percent (yoy) in the first quarter of 2025.

According to Ferry Salanto, Head of Research at Colliers Indonesia, this policy is a good strategic step to increase public access to housing and encourage the growth of the property sector. "PPNDTP can directly reduce house purchase prices and encourage purchasing power, especially for MBR, and accelerate the absorption of ready stock projects," Ferry told Suar by telephone on Wednesday (30/07).

Then 0% DP through the BPJS employment scheme can also overcome the down payment problem that has been an obstacle for low-income people (MBR). According to Ferry, if both are run effectively, it will be able to really reduce the backlog*.

"Well, the impact can increase demand in the subsidized housing segment and simple landed houses, it can also stimulate developers to return to building houses at affordable prices," said Ferry.

Chairman of Real Estate Indonesia (REI) Joko Suranto assessed that the extension of PPNDTP is a tangible form of the government's concern for the housing sector which had been depressed.

"This gives a positive signal to the public to dare to buy a house, and helps the property industry keep moving. Moreover, we know that there are around three million housing units that still need to be absorbed," said Joko.

Joko added that this stimulus not only had an impact on home sales, but also encouraged the growth of around 185 derivative industries: ranging from building materials, furniture, to the labor sector.

"Hopefully, this PPNDTP can encourage people to buy houses and stimulate the economy," he said.

New Scheme: Rp130 Trillion Housing KUR and Free DP for BPJS Workers

In addition to the tax stimulus, the government also introduced two new policies that directly target low-income people and formal workers.

First, the Rp130 trillion Housing People's Business Credit (KUR). This is the first time KUR has been allocated to the property sector, which was previously synonymous with working capital for UMKM.

"As long as Indonesia has existed, only now is there a housing KUR. The figure is also fantastic: Rp130 trillion," said Minister of Housing and Settlement Areas (PKP), Maruarar Sirait, after the Limited Coordination Meeting.

Ara, his nickname, said that this program is just waiting for the completion of the Ministerial Regulation (Permen) as a legal basis, with the progress of the preparation having reached 90 percent.

This scheme is expected to help build landed houses in villages and flats in cities, as well as encourage local contractors, builders, and building material UMKM .

"Mr. President always emphasizes that we must create UMKM to upgrade," added Ara.

Second, the gotong royong initiative: developers of subsidized houses agreed to directly bear the down payment (DP) for workers participating in the BPJS Ketenagakerjaan, averaging Rp1.7 million per person.

"I think this is the answer to President Prabowo's direction: no serakanomics. This is clear evidence of mutual cooperation," said Ara.

Answering Two Big Homeworks: Backlog and Inadequate Housing

The two main problems of the housing sector remain the same: a backlog of around 9.9 million families without a home, and 26 million uninhabitable houses.

Over the years, government policies have focused heavily on subsidizing mortgage interest. However, the biggest obstacle remains the down payment and affordability. The combination of PPNDTP, KUR Housing, and free DP is expected to open a way out.

For houses that have been built but are uninhabitable, the government still relies on the Self-Help Housing Stimulant Assistance (BSPS) program that provides partial renovation funds. The rest is expected to be covered through community mutual cooperation or corporate CSR.

"The best solution is of course CSR and mutual cooperation, so that these houses can be assisted," said Ara.

New Focus: Not Just Quotas, but Absorption

This year, the government is targeting the construction of 350,000 subsidized houses. However, the focus is not just on meeting the quota, but on ensuring that the houses are actually sold and occupied.

"This year's quota is no problem... The challenge is now absorption," Ara explained.

Expert Says: Stimulus may not be on target

Lecturer and member of the Housing and Settlement Research Group of the Bandung Institute of Technology (ITB) Mohammad Jehansyah Siregar believes that all these stimuli will basically not be effective in reducing the housing backlog. Instead, it will make the state lose revenue from the property sector.

This critical view highlights the government's policy of channeling more stimulus through bank financing, such as subsidized mortgages (KPR), in the hope of boosting economic growth while helping low-income people (MBR). However, according to Jehansyah, there are structural limitations that make these measures difficult to target.

He explained that the maximum capacity of house construction for MBR is currently only around 250,000 units per year. "Even then, many are built in agglomeration areas that are not necessarily in accordance with the designation, and sometimes have problems in terms of quality," he added. Meanwhile, the national backlog is still tens of millions of units, a gap that is very difficult to bridge only with a financing stimulus.

Furthermore, the number of subsidized mortgage applicants among MBRs is also limited. Many do not meet the banking requirements in terms of income and creditworthiness, or choose other options such as living with family or renting. "There are many middle-class people who are actually bankable, interested in APBN (State Budget) subsidies, especially if the project is in a strategic location," he explained.

At this point, Jehansyah argues that the financing stimulus policy is actually more suitable to be managed by the financial sector: BI (Bank Indonesia), OJK (Financial Services Authority), the Ministry of Finance, and implementing banks such as BTN (Bank Tabungan Negara). The state budget, he said, should be focused on strengthening the foundation of public housing production.

According to him, the Ministry of PKP needs to prioritize the provision of large-scale ready-to-build areas, land provision, infrastructure integration, and spatial planning. From there, the construction of public houses can be more structured and affordable by involving developers.

"Don't go into the realm of banking or UMKM," said Jehansyah. "More importantly, understand the concept of multi-housing delivery systems: public housing, self-help housing, and social housing that can reach low-income households in slums and commuter-dense metropolitan areas."

He also emphasized the need for serious evaluation of ongoing programs such as Rusunawa(public housing), House Surgery(self-help housing), and Special Houses(social housing). Not just a routine APBN project, but must actually reduce the backlog, improve the quality of housing, and reduce slums.

"After almost three decades of reform, the problem of public housing is almost stagnant. In fact, backlogs and slums are expanding," he said. According to him, the moment when fiscal and monetary are focused on maintaining macro stability should be an opportunity to strengthen public housing policies on the production side, not just increasing subsidies.

With a more strategic policy direction, future public housing solutions will not only maintain the growth rate of the property sector, but also improve the quality of life of the community in a more sustainable and equitable manner.