By: Ahmad Syarif Hidayat
The government has officially increased the quota of subsidized housing under the Housing Financing Liquidity Facility (FLPP) scheme from 220,000 units to 350,000 units for the year 2025. This policy marks the largest increase in the history of FLPP implementation in Indonesia. It is a strategic move to accelerate the fulfillment of housing needs for low-income communities.
Minister of Housing and Settlements, Maruarar Sirait, explained that the original quota of 220,000 FLPP units has been increased to 350,000 units with a budget fully prepared by the government. He also mentioned the possibility of adding more units if funding allows. According to data from the Public Housing Savings Management Agency (BP Tapera), around 260,000 subsidized homes were provided in 2019, though not all through the FLPP scheme. Thus, the increase to 350,000 units represents the largest leap since the program began.
Minister of Finance, Sri Mulyani Indrawati, stated that the realization of state spending for subsidized housing under the FLPP scheme has supported the construction of tens of thousands of housing units for low-income groups up to mid-2025. Following directives from President Prabowo Subianto to broaden the program’s reach, this year’s FLPP target was raised significantly, resulting in a substantial budget increase. The funds are allocated for FLPP, support from PT Sarana Multigriya Finansial (SMF), and down payment subsidies to expedite housing access.
Chairman of the Central Board of the Association of Settlement and Public Housing Developers (Himperra), Ari Tri Priyono, praised the increased FLPP quota and the extension of the 100% Government-Borne VAT (PPN DTP) incentive until the end of 2025. He emphasized that this reflects the government’s strong commitment to meeting public housing needs. He noted that the government has allocated approximately IDR 35.2 trillion to support the 350,000-unit FLPP quota, as outlined in the Minister of Finance Decree No. 235 of 2025. The extended PPN DTP incentive is also expected to boost interest from low-income groups and property industry players.
The increase in the subsidized housing quota to 350,000 units is more than just a number—it is a major breakthrough that broadens opportunities for low-income communities to own decent and affordable homes. The government has shown its seriousness by allocating IDR 35.2 trillion specifically for the 2025 FLPP program. Various conveniences are also provided, such as low monthly installments starting from IDR 1 million, fixed interest rates of 5%, minimum down payments of 1%, and VAT exemptions to accelerate home ownership. This policy aims to remove financial barriers that have long hindered the public.
In addition, the program has become more inclusive by allocating quotas based on occupational needs. For instance, subsidized housing quotas are designated for teachers, healthcare workers, civil servants, farmers, fishermen, and informal workers such as online motorcycle drivers and domestic helpers. This segmented approach ensures the program reaches all segments of society in need. Collaboration among ministries, banks, and developers has led to promising outcomes.
West Java Province stands out as a success story of this program, absorbing 30–33% of the national FLPP quota. This opens wider economic opportunities and creates new jobs in the construction and property sectors. West Java’s success provides optimism that this program can be effectively and sustainably implemented across other regions of Indonesia. This collaborative spirit is key to accelerating access to decent housing for the people.
Considering all the steps taken, all parties are now highly optimistic that the 350,000 subsidized housing target will be achieved—possibly even exceeded. The government agrees that strong institutional synergy is essential for the success of this program. They believe that this solid collaboration will speed up the realization of decent housing for low-income communities.
The 100% Government-Borne VAT (PPN DTP) incentive valid until the end of 2025, along with the 0% down payment program through collaboration with the Social Security Agency for Workers (BPJS Ketenagakerjaan), further expands access for low-income groups. These innovations not only ease the process of purchasing subsidized housing but also give a positive boost to the property sector, which significantly contributes to national economic growth. With these incentives, more people are expected to soon own their dream homes.
Moreover, the well-prepared budget and increasingly effective cross-agency coordination ensure that the distribution and delivery of subsidized homes proceed swiftly and accurately. This program not only meets the basic need for housing but also strengthens the overall welfare foundation of the people. The government’s commitment and that of all stakeholders make this program a crucial milestone in Indonesia’s social and economic development.
With strong commitment and solid cooperation, the future of decent housing for low-income communities looks increasingly bright. The increase of the subsidized housing quota to 350,000 units sets a new historical precedent and will continue to inspire other social programs. It is hoped that this policy will help realize a more prosperous, inclusive Indonesia that provides fair opportunities for all layers of society.
The author is an Economic Analyst
