Summary
Indonesia chose to keep supporting home transactions rather than hoping demand would recover on its own. Through PMK 60/2025, the government restored a 100 percent VAT-borne-by-government incentive for the eligible portion of new landed houses and apartment units delivered between July and December 2025, covering the portion of selling price up to Rp2 billion for units priced up to Rp5 billion. That was a meaningful upgrade from the weaker second-half treatment under the earlier 2025 framework and signaled that housing remained part of the government's demand-support toolkit.
What this means for Indonesia
This is best read as a transaction policy, not a prediction of runaway prices. Bank Indonesia's residential property survey still described primary-market price growth in late 2025 as limited, even while sales improved and housing loans remained the main financing source for buyers. The implication is straightforward: policymakers wanted to keep end-user demand moving in a market where financing, taxes, and monthly affordability still shape behavior more than speculative momentum. That should support decision-making in mainstream price bands more than in ultra-premium stock.
What to do next
Teams covering Indonesia should explain the VAT incentive in practical terms, especially who qualifies, which price caps matter, and why the benefit is more relevant to purchase timing than to long-term price assumptions. Advisory flows should distinguish between buyers motivated by tax savings, buyers relying mainly on mortgage eligibility, and buyers focused on rental or lifestyle use. The next question is whether demand supported by incentives converts into a broader 2026 absorption trend once the temporary tax help rolls off.