Indonesia ViewPoint – Regulatory Reforms and Tax Amnesty October 2016
Over the past year Indonesia has announced a raft of economic reforms designed to improve the investment climate, increase public investment in infrastructure and put in place a more prudent monetary policy.
The real estate sector has been a key focus of the reform effort, with strong emphasis and publicity given to measures designed to widening investment opportunities in the nation’s property sector and attracting capital from overseas, with the ultimate aim of establishing the real estate sector as a key driver of economic growth.
Major reforms have included easing restrictions on foreign ownership and introducing new tax incentives for REITs, along with smaller measures such as reducing property transfer taxes.
Other recent and relevant policies include a temporary tax amnesty, which authorities hope will encourage wealthy Indonesians to repatriate funds kept abroad, a sizable portion of which are expected to flow into the real estate sector, among others.
This ViewPoint by CBRE Research Asia Pacific clarifies and unpicks the detail in the major regulatory changes announced over the past year; explains and assesses their impact on the real estate sector to date; and identifies additional areas for improvement.