Government rethinks plans to tax any apartments left unoccupied.
Taxes discussed by the government earlier in the year have been put on the back burner. As part of this news it has been announced that they have given up hope of implementing a tax on empty apartments. Good news for campaigners who raised concerns that a tax of this sort could reduce investment interest within the property world. Something that should not happen at a time when the property market is slowing down.
The announcement was made by Sofyan Djalil, Agrarian and Spatial Minister, commenting, “We will rethink such a policy because property is having a difficult time now. We will discuss it further”. Djalil cited a slowing economy for a reason for this decision as transaction numbers have reduced for apartment sales.
The government want to try and attract investors. A policy like this would dampen any hopes of this happening. Real estate firm Cushman and Wakefield estimate that investors comprise 60 percent of all apartment occupiers showing their sheer strength in the market. How a vacant apartment is defined also raised concerns since many investors are unlikely to use the property as their primary residence but use it occasionally.
A tax on idle land has also been postponed by the government. Initially the idea was to incentivise landowners to use their property by applying a progressive tax for any land left idle. However now the plan is to speed up on the issuing of land certificates to aid the situation.
The third type of tax which has also been discussed along with the tax on vacant apartments and idle land is a capital gains tax. All were proposed by the Finance Ministry.
