Indonesia Allocates Record Rp 43 Trillion for 350,000 Subsidized Homes in 2025

 

JAKARTA, Investortrust.id — The Indonesian government has allocated Rp 43 trillion ($2.65 billion) to finance 350,000 units of subsidized housing in 2025, marking the largest investment in affordable housing in the nation’s history, Minister of Housing and Settlements Maruarar Sirait said on Tuesday, May 27, 2025.

 

The funds will be distributed through the Housing Financing Liquidity Facility (FLPP), a public-private housing finance scheme aimed at supporting low-income homebuyers. This year’s target represents a historic leap from the initial quota of 220,000 units, which had received a budget of Rp 18.7 trillion ($1.15 billion).

 

According to Maruarar, often called Ara, the government decided to raise the quota by an additional 130,000 units, requiring a Rp 16.4 trillion ($1 billion) increase in FLPP funding. This expanded budget is supported by Rp 7.02 trillion ($433 million) in state capital injection and contributions from Sarana Multigriya Finansial (SMF), as well as a 25% cost-share from banks.

 

“This is truly an extraordinary policy by President Prabowo for the people,” said Maruarar during a press briefing in Jakarta. “This is the first time in our history that the subsidized housing quota reaches 350,000 units.”

 

The minister noted that the initial 220,000-unit program had already achieved 43% completion. He added that the government was working swiftly to meet national housing needs before the full quota was exhausted.

 

Private Sector Confidence Rises

Bank Central Asia (BCA), Indonesia’s largest private bank, has joined the subsidized housing program to provide affordable mortgages for low-income citizens. The bank formalized its participation through a memorandum of understanding with BP Tapera, Indonesia’s public housing savings management agency.

 

The collaboration supports the government’s “three million homes” initiative, part of a broader 2024–2029 national housing plan.

 

The minister stressed that this program reflects a genuine pro-people policy. “There has never been anything like this before,” Maruarar said. “The previous record was in 2019 when we had 260,000 units, but not all were under the FLPP scheme.”

 

Tax Relief and Investment Appeal

To further support homeownership, the government has extended several tax incentives through June 2025. These include exemptions from value-added tax (VAT) for houses priced under Rp2 billion ($123,500), as well as relief from the Land and Building Rights Acquisition Fee (BPHTB) and Building Permit (PBG) charges.

 

Maruarar advised prospective buyers to focus on ready-to-occupy properties rather than purchasing off-plan homes. “Don’t just buy a picture. Buy a house you can move into,” he said.

 

He also urged Indonesians to view home purchases as a long-term investment rather than spending on non-productive consumption. “This is a better use of your money,” he added.

 

Institutional Shift to BP Tapera

A major institutional change has also taken place with the transfer of FLPP distribution authority from the Ministry of Public Works and Housing (PUPR) to BP Tapera. The shift aims to streamline and integrate housing finance mechanisms nationwide.

 

With increased synergy between Tapera, private lenders like BCA, and strong government backing, officials hope the FLPP program will help close the housing gap for millions of low-income families across Indonesia.