roperty developers have voiced opposition to the government’s plan to increase taxes on landed houses in urban areas, a move aimed at encouraging people to shift toward high-rise living.

The Real Estate Indonesia (REI) association warned the policy would further strain an already sluggish property sector grappling with weak consumer spending power.

“We are surprised. When the property industry is underperforming, it is unwise to impose a new tax burden on landed homeowners,” REI deputy chairman Bambang Ekajaya said on Sunday, as quoted by Kontan.

Bambang cautioned that the plan could derail the government’s goal of addressing the national housing backlog, which currently stands at around 15 million units.

He pointed out that many of the subsidized homes offered through the government’s Housing Finance Liquidity Facility (FLPP) were, in fact, landed houses.

If the government wants to promote high-rise living, Bambang added, it should first address the structural issues plaguing the sector, ranging from unrealistic pricing benchmarks to frequent conflicts in poorly managed apartment communities.

Every Monday

With exclusive interviews and in-depth coverage of the region’s most pressing business issues, “Prospects” is the go-to source for staying ahead of the curve in Indonesia’s rapidly evolving business landscape.

for signing up our newsletter!

Please check your email for your newsletter subscription.

View More Newsletter

“Private developers have largely steered clear of government-subsidized urban apartments because the cost of construction exceeds the benchmark selling price,” he explained.