The Indonesian government is considering increasing the maximum salary limit for recipients of subsidized housing from IDR 8 million to IDR 12 million (SGD 1,020). The plan, announced by Minister of Public Works and Housing (PUPR) Basuki Hadimuljono, is part of a broader effort to make homeownership more accessible, including a possible extension of mortgage tenors to 40 years to ease repayment burdens.
Currently, eligibility criteria for Indonesia’s subsidized housing program, known as the Fasilitas Likuiditas Pembiayaan Perumahan (FLPP), set a maximum salary limit at IDR 8 million (SGD 680) per month. However, with rising living costs and housing demands, there have been calls to raise the income threshold to IDR 12 million (SGD 1,020), allowing more people to benefit from the program.
Minister Basuki Hadimuljono stated that the salary limit for FLPP recipients has been gradually increased over time—from IDR 4-5 million (SGD 340-425) previously, to IDR 8 million today, and now potentially to IDR 12 million (SGD 1,020). The goal is to make the program more inclusive for those in need of affordable housing.
The proposed changes also include extending mortgage tenors from the current 20 years to as long as 40 years. This would significantly reduce monthly installments, making home ownership more affordable for a larger portion of the population. “It’s a matter of policy, but it can be done,” Basuki noted.
Under current regulations, FLPP recipients must earn no more than IDR 8 million (SGD 680) per month and are eligible for loans with a fixed interest rate of 5% over 20 years. The new proposal aims to ease this restriction, especially as more households with higher incomes still struggle to afford homes.
As part of the broader push for affordable housing, the incoming government of Prabowo Subianto and Gibran Rakabuming Raka has also pledged to build three million new homes each year during their term. This ambitious plan, known as the “National Transformation Strategy,” aims to tackle housing shortages across urban, rural, and coastal areas.
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The expansion of FLPP eligibility and the extension of mortgage tenors are seen as critical to achieving the government’s housing goals, particularly in providing homes for Indonesia’s growing middle class. “With these policies, we can ensure more families have access to affordable housing and secure long-term living conditions,” Basuki added.
By raising the salary cap for subsidized housing and extending mortgage terms, the Indonesian government aims to make home ownership more accessible for middle-income workers. If implemented, these changes could significantly boost housing affordability and contribute to the nation’s ambitious plan to build millions of homes annually, improving living conditions for citizens across the country.
Indonesia is set to raise the maximum salary limit for subsidized housing to IDR 12 million (SGD 1,020) and potentially extend mortgage tenors to 40 years. These measures are designed to improve housing affordability and meet growing demand, particularly from middle-income families.
Sources: CNN Indonesia, Tempo.co (2024)
