Effect of Leverage on Tax Avoidance in Property and Real Estate Sector Companies Listed on the Indonesia Stock Exchange

Property and real estate firms need heavy funding for land, construction, and assets. Debt raises leverage. Deductible loan interest cuts taxable income, linking leverage to tax avoidance. This study analyzes how leverage impacts tax avoidance in property and real estate companies listed on the Indonesia Stock Exchange between 2019 and 2023. The topic was chosen given the importance of a company’s financing structure in managing its tax burden, especially because debt use incurs interest expenses that can influence taxable income. A quantitative approach is adopted in this research, which examines 92 property and real estate companies traded on the Indonesia Stock Exchange during 2019–2023. Purposive sampling based on predetermined criteria produced a sample of 59 companies. Over the five years of observation, 295 firm-year observations were analyzed in total. According to the results, leverage significantly and positively influences tax avoidance, as shown by a regression coefficient of 0.121399, a t-statistic of 2.846968, and a p-value of 0.0047. Since the p-value is below 0.05, the hypothesis is accepted. These findings indicate that debt utilization levels represent one factor associated with tax avoidance in property and real estate companies. Insight into the relationship between funding structure and the management of corporate tax burdens during the study period is provided by these findings.