Resulting inflation could be positive sign for market, say experts
With the lengthening MRT comes increasing residential real estate values for investors in Jakarta.
Property taxes could rise by as much as 30 percent around designated routes of the MRT project, leading to higher asset prices along them, revealed a leading official with the Jakarta Provincial Government.
“The land and building taxes of business districts around Lebak Bulus-Bunderan Hotel Indonesia will be automatically adjusted when the Jakarta’s MRT starts operating,” Edi Sumantri, head of the Regional Tax and Retribution Agency of DKI Jakarta, told Bisnis Indonesia. “The amount varies, ranging from 15 percent to 30 percent.”
The new land and building levies around the MRT project will be calculated after it starts operating, Sumantri revealed.
The adjusted taxes will not be applied to residential zones but only to commercial and business districts, such as Blok M, Karet, Setiabudi, Bunderan HI and parts of Medan Merdeka.
Such levies will precipitate healthy capital appreciation for nearby property and send a positive signal to the real estate sector, according to Ignasius Untung, country manager of Rumah123.com. The preference of Jakarta residents for homes close to modes of transit will ensure that the new tax rates will not hamper sales of private residences.
“The fact that apartment prices in Jakarta are still high is caused by the way society thinks,” Untung told Okezone. “They have learned that even if they have a big and nice house, but their access to various places is consuming too much time, they would prefer to have a house in the middle of the city.”