Executive Summary

Key insights and market outlook

The Indonesian government has extended the 100% Value-Added Tax (PPN) subsidy through 2026 for landed houses and apartments valued up to Rp5 billion, as outlined in Finance Minister Regulation No. 90/2025 ¹

²³. This policy is expected to boost property demand and positively impact the property insurance sector ¹³. Companies like Metropolitan Land (MTLA) are optimistic about the extended incentive, projecting better absorption rates ².

Full Analysis

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Deep Dive Analysis

Indonesia Extends 100% PPN DTP Incentive Through 2026: Impact on Property and Insurance Sectors

Policy Details and Rationale

The Indonesian government has announced the continuation of the 100% Value-Added Tax (PPN) subsidy for properties valued up to Rp5 billion throughout 2026 ¹

²³. This decision, formalized through Finance Minister Regulation No. 90/2025, aims to stimulate the property market by reducing the financial burden on homebuyers ². The incentive covers both landed houses and apartments, making housing more affordable for prospective buyers ¹.

Impact on Property Sector

Property developers, such as PT Metropolitan Land Tbk (MTLA), are optimistic about the extended incentive. According to Metropolitan Land's Director, Olivia Surodjo, the prolonged subsidy is expected to enhance property absorption rates in 2026 compared to the previous year ²

. The stimulus is likely to encourage more buyers to enter the market, thereby boosting sales for property developers ⁴.

Effects on Property Insurance

Insurance experts view the extended PPN DTP incentive as a positive stimulus for the property sector, which could indirectly benefit property insurance ¹

³. Wahyudin Rahman, an insurance observer, noted that while the incentive is likely to trigger increased demand for property insurance, the overall impact on the insurance industry's performance needs to be assessed proportionally considering the overall premium portfolio structure ¹. The General Chairman of the Indonesian General Insurance Association (AAUI), Budi Herawan, echoed this sentiment, emphasizing the need for careful evaluation ³.

Market and Economic Implications

The extension of the PPN DTP incentive is seen as a strategic move to maintain momentum in the property market, which has significant implications for the broader economy ⁴

. With the property sector being a crucial economic driver, the government's support through tax incentives is expected to have a ripple effect on related industries, including construction and financial services.

References