One Year of the Prabowo-Gibran Administration: Targeting a Multiplier Effect in Housing Programs to Boost the National Economy

Jakarta – As President Prabowo Subianto and Vice President Gibran Rakabuming Raka (Pragib) celebrate their first year in office, the housing sector has reaffirmed its role as a key driver of the national economy. The government positions the housing program not only as a solution to people’s housing needs, but also as a strategy to strengthen the economic foundation through its multiplier effect.

Finance Minister Purbaya Yudhi Sadewa emphasized that the government is extending the Value Added Tax (VAT) exemption for home purchases until December 31, 2027. This incentive aims to maintain middle-class purchasing power and boost the property sector.

“To maintain purchasing power and support the property sector, the government is covering 100 percent of the VAT DTP for home purchases up to IDR 5 billion. However, the VAT exemption only applies to the first IDR 2 billion,” Purbaya stated at the APBN Kita press conference on Tuesday (10/14).

This policy is projected to encourage the construction of around 40,000 housing units per year, which will directly stimulate more than 100 economic sectors and indirectly stimulate 75 other sectors. The government believes this sector will be a catalyst for sustainable economic growth.

The Director General of Economic and Fiscal Strategy at the Ministry of Finance, Febrio Kacaribu, added that the continuation of this incentive will provide business certainty for developers and accelerate the development of property projects in various regions.

“With this certainty, developers can more freely plan projects and accelerate development,” Febrio said.

In addition to fiscal incentives, the government is also strengthening subsidy programs for low-income communities (MBR) through the Housing Financing Liquidity Facility (FLPP) and Self-Help Housing Stimulus Assistance (BSPS). Total housing assistance is targeted to reach 770,000 units by 2026.

The Ministry of Housing and Settlements (PKP) is also accelerating the construction of the National Strategic Project of 3 million homes during the 2025–2029 period. Director General of Urban Housing, Sri Haryati, described this sector as the backbone of economic growth.

“The housing sector is one of the main pillars in driving national economic growth, as it has a significant multiplier effect on the Indonesian economy,” he said.

Furthermore, the relaxation of People’s Business Credit (KUR) for MSMEs in the housing sector and the strengthening of the Housing Program Credit (KPP) scheme will open wider access to funding for small and medium-scale developers.

Finance Minister Purbaya expressed his confidence that the housing programs of the Ministry of PKP under the leadership of Maruarar Sirait will be a major driver of economic recovery and growth.

“I haven’t calculated the exact amount. But it’s very significant, because it’s not just housing; it also includes construction, cement, and so on. Housing is considered an investment, so everything increases,” he said.

The Prabowo-Gibran administration has demonstrated that housing development is not merely a social policy, but a driving force for national economic growth. With this strategy, the government is targeting national economic growth to reach 5.6 to 5.7 percent in the next few years.