jakarta raises property taxes up to 30 percent in mrt areas

The Jakarta Provincial Government predicts that the city’s MRT project will end up raising property taxes by up to 30 percent in the areas where the train will operate. Edi Sumantri, head of the Regional Tax and Retribution Agency of DKI Jakarta, said that his agency has calculated the rising value of these taxes, particularly for land near first corridor in the initial phase of the megaproject.

“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. The amount varies, ranging from 15 percent to 30 percent,” he explained as quoted by Bisnis Indonesia.

He also stated that the development of the MRT will have positive impacts on the economy, especially in the property sector. Jakarta’s MRT will increase market prices for property around it, said Sumantri.

He added that the change of land and building taxes around MRT corridors will serve as the standard to establish DKI Jakarta’s Medium Term Development Plan for the five years ahead. The calculation of land and building taxes is based on several factors, including market demand, fees for acquisition and the bidding process by real estate agents.