Government Officially Extends VAT Incentive DTP Until The End Of 2024

JAKARTA - The government has officially extended the Government-Borrowed Value Added Tax (VAT) incentive (DTP) for the delivery of landed houses and flats with a selling price of up to IDR 5 billion by the end of 2024.

Meanwhile, this provision is regulated in the Minister of Finance Regulation Number 7 of 2024 which will take effect on February 13, 2024.

Director of Counseling, Services, and Public Relations Dwi Astuti said that the provision of VAT DTP incentives was given in order to increase national economic growth and increase property purchasing power by the community.

Dwi said that transactions in the property sector are transactions that have a large multiplier effect on other economic sectors, such as the labor sector, the trade sector for building materials and so on.

"The government hopes that through this incentive extension there will be an increase in property transaction activities which will have a positive impact on other related economic activities," Dwi said in his official statement, quoted on Thursday, February 22.

Dwi emphasized that the DTP VAT was given on the basis of Tax Imposition (DPP) a maximum of IDR 2 billion, which is part of the largest selling price of IDR 5 billion.

For example, Mr. X bought a house for Rp. 6 billion. For this transaction, Mr. X cannot take advantage of the DTP VAT incentive because the selling price of the house exceeds 5 billion rupiah. For the second example, Mr. Y bought a house for Rp. 5 billion. For this transaction, Mr. Y will get an incentive for VAT DTP but only for DPP of 2 billion rupiah. In other words, VAT DTP is 11 percent multiplied by 2 billion rupiahs or 220 million rupiahs," he explained.

Based on Article 7 PMK, the VAT DTP provided is divided into two terms. For the delivery of houses for the period January 1, 2024 to June 30, 2024, VAT borne by the government is 100 percent of the Tax Imposition Basis (DPP). For the delivery of the period from July 1, 2024 to December 31, 2024, VAT borne by the government is 50 percent of the DPP.

Dwi said it needed to be emphasized that this policy could only be used once by Indonesian citizens and foreign nationals.

In addition, this incentive is only given for the delivery of new landed houses or new flat units that have received a home identity code from the Ministry of Public Works and Public Housing application and/or the People's Housing Savings Management Agency.

Dwi also said that this policy could still be used for submission with an installment scheme. Incentives can also be utilized even though the first down payment or installments has been made before the implementation of this PMK as long as it is not longer than on September 1, 2023.

According to Dwi, another requirement that needs to be considered is that the landed house or apartment unit cannot be moved within one year of submission.

"The government hopes that the public can take advantage of this opportunity to own a house as well as support the national economy of the property sector and its supporting sectors," concluded Dwi.