The extension of the government-borne 100% Value Added Tax (VAT) incentive throughout 2026 is considered insufficient to serve as a strong catalyst for boosting the property sector’s performance.

The government has once again prolonged the full VAT incentive until the end of 2026 for purchases of landed houses and apartment units, with a price cap of up to Rp5 billion. This policy is stipulated under Minister of Finance Regulation (PMK) No. 90 of 2025 on VAT for the delivery of landed houses and apartment units borne by the government in the 2026 fiscal year.

noted that extending the VAT incentive through 2026 does provide support to the property sector. However, she cautioned that it should not be viewed as a silver bullet that will immediately trigger a surge in demand.

The incentive does not suddenly make homeownership affordable for everyone, but it can shift perceptions from “impossible” to “possible with the right calculations.” The most tangible impact is seen in ready-to-occupy landed houses, particularly in the Rp1 billion to Rp2 billion price range, which is highly sensitive to pricing.

Meanwhile, the personal income tax (Article 21) incentive for workers earning up to Rp10 million per month also has a positive effect by increasing take-home pay. While this additional income is not instantly used to purchase property, it can help accelerate down payment savings and ease installment burdens.

According to Liza, the combination of VAT DTP and income tax incentives works on two fronts: sustaining daily consumption and lowering barriers to acquiring large assets. Nonetheless, she emphasized that the success of the VAT incentive ultimately depends on developers’ ability to offer products that align with purchasing power, ideally priced below Rp1 billion.

If property prices remain high and disconnected from consumer affordability, the incentive will merely shift existing demand rather than generate new buyers. From a capital market perspective, the policy may support sales volumes and cash flows for property issuers, but it is unlikely to spark a sudden rally in share prices.

Property stock growth is expected to be moderate and selective, favoring companies that adapt most quickly to real market purchasing power conditions.

Separately, Pilarmas Investindo Sekuritas Associate Director of Research and Investment Maximilianus Nico Demus assessed that the VAT incentive has a meaningful impact, with property demand potentially rising by up to 16.8% compared to 2024. The strongest increase occurred in July 2025, when property prices surged by as much as 30%.

He added that landed housing sales benefit the most from the incentive, while apartment segments are less affected due to longer construction timelines and the incentive’s applicability only to ready-stock units. Based on this outlook, Nico recommended buying shares of PT Bumi Serpong Damai Tbk (BSDE), PT Summarecon Agung Tbk (SMRA), and PT Ciputra Development Tbk (CTRA), with respective target prices of Rp1,240, Rp570, and Rp1,300 per share.