Pekanbaru, Riau, March 24 (Antarariau.com) - The government should revise its policy to impose 10 percent value added tax (VAT) on low-cost houses as it burdens low-income people, chief of Riau provincial office of Indonesian Real Estate Association (REI) Nursyafri stated.
The low-income people find it burdensome to make a down payment on low-cost houses, much less to pay 10 percent VAT, he explained here on Monday.
He was responding to the government"s plan to build 250 thousand low-cost houses for low-income people this year. The target increased two-folds compared to last years.
In 2013, a unit of low-cost house was priced at Rp80 million. The price has increased to Rp88 million per unit this year, excluding 10 percent VAT.
"The 10 percent VAT heavily impacted the first-quarter sale of low-cost houses which fell 25 percent from the same period last year," he pointed out.
In the first quarter of 2014, only 2 thousand units of low-cost houses were sold in the districts of Kampar, Siak, Rokan Hulu, and Pelalawan in Riau province, he elaborated.
He believed that the lower-than-targeted sale of low-cost houses will generate loses for REI members, as they had to pay interest to banks based upon a factoring agreement.
Govt Urged to Review 10 Percent Vat on Low-Cost Houses
