"With the tax amnesty, the upper-middle class can be more 'wow'. It was already beginning to rebound even without the tax amnesty program, and with it, it will be even better."
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Agung Samosir|KATADATA

Bank Mandiri's Retail Banking Director Tardi has said the tax amnesty could promote growth of the property industry, especially as the state bank is offering easier, more innovative home mortgages (KPR).

Tardi is confident that mortgage business growth will improve despite the current tough challenges. With the tax amnesty scheme and Mandiri's own innovations, the industry is expected to return to its past glory. (Read: Million Homes Program Faces Two Challenges).

"There are positive developments in terms of regulation, including the soon to be implemented mortgage relaxation and the tax amnesty scheme, which we believe will have a positive impact. We expect mortgage disbursement to grow significantly this year," Tardi said at the Mandiri Property Seminar at the Plaza Mandiri Auditorium in Jakarta, Monday (29/8).

According to Tardi, Mandiri is working on an innovation to offer an effective interest rate of 8.5 percent, which is a fixed rate for a period of five years, throughout 2016. The interest rate applies to Bank Mandiri priority customers and customers who buy property through property developers and agents that are partners of Mandiri.

The state bank is also reinforcing the volume and quality of its partnerships with developers and estate agents. To date, Mandiri has mortgage business partnerships with more than 800 project developers and 600 estate agents.(Read: Government to Axe 20House Building Licenses).

Tardi believes the property industry will continue to be the bank's growth engine. In the second quarter of 2016, Mandiri's mortgage business grew 8.2 percent, above the market average of some five percent. This growth rate will be maintained until the end of 2016 with the support of the tax amnesty scheme and Mandiri's innovations.

Meanwhile, the property sector's non-performing loan(NPL) ratio is at a safe level of around 1.6 percent,and has never gone above two percent. However, Tardi could not give an estimate for next year's mortgage growth, saying it depends on how the tax amnesty works out.

Indonesia Property Watch CEO Ali Tranghanda agreed that the tax amnesty could drive the property industry's growth. Despite today's declining sales value, he is confident of gradual sector growth as more middle-class buyers come on to the property market.

"With the tax amnesty, the upper-middle class can be more 'wow'. It was already beginning to rebound even without the tax amnesty program, and with it, it will be even better," Ali said.

The Tax Directorate General's Planning and Inspection Sub Directorate Chief Tunjung Nugroho reminded investors planning to invest in non-financial sectors, such as property, to do so via banks that the government has appointed as tax amnesty repatriation gateways.

(Read:Government Shortens Subsidised Mortgage Disbursement Period to 3 Days).

"If they want to invest in non-financial products, including property, they must go through banks. They must communicate with banks to direct their investments. Banks must also provide attractive investment products," Tunjung said.