Indonesia plans to reintroduce a full tax break on property purchases worth up to 5 billion rupiah ($323,000 or RM1404 million) for the second half of 2024 to bolster demand, the country's chief economic minister announced on Tuesday. This move is intended to revitalise the property market by enhancing the purchasing power of the middle class, which has been negatively impacted by the lingering effects of the COVID-19 pandemic.

Previously, the policy, which covers the cost of value-added tax (VAT) on up to 2 billion rupiah of the price of an eligible landed house or apartment purchase, had been scaled back. Until Tuesday's announcement, the government had reduced its support, covering only 50 per cent of the VAT component after the full exemption ended in June.

Minister Airlangga Hartarto stated that the reinstatement of the full tax break is a strategic measure aimed at stimulating the property sector and ensuring that the middle class can continue to invest in real estate, thereby driving economic growth in the post-pandemic era.