Government Promises Home VAT Incentives, Effective November 2023

JAKARTA - The government will provide fiscal incentives in order to strengthen the housing sector, which will take effect in November 2023.

The incentives are in the form of government-borne value added tax (VAT DTP) as well as administrative cost assistance.

Minister of Finance Sri Mulyani Indrawati admitted that she was preparing technical rules that would be contained in the form of a Minister of Finance Regulation (PMK) regarding the government-borne value-added tax incentive (PPN DTP) for the purchase of houses.

"Currently the PMK is in the stage of harmonization and finalization to be determined immediately," Sri Mulyani said at the KSSK Press Conference in Jakarta, Friday, November 3.

The DTP VAT will be given to commercial or home houses at a price below IDR 2 billion for a period of 14 months or from November 2023 to June 2024.

The government will bear 100 percent VAT on the purchase of houses.

Furthermore, from July 2024 to December 2024, the amount of VAT DTP incentives will be given to 50 percent.

Sri Mulyani said this housing tax incentive would only apply to one Population Identification Number (NIK) with one purchase.

"This DTP VAT facility will be given to buyers, one house per one NIK or NPWP," he said.

This state treasurer hopes that the DTP VAT incentives will help people in owning their homes in an affordable manner.

"It is hoped that it will be published in November to maintain the momentum of economic growth. We also see that in terms of demand and supply, we can get a positive response to the policy," he said.

For information, the Ministry of Finance (Kemenkeu) has prepared a budget of IDR 3.2 trillion for incentives in the property sector.

This policy is one of the government's policy packages in protecting the domestic economy.