Knock! Property VAT Incentive Officially Launches, Valid Until 30 September 2022

Illustration (Photo: Doc. Antara)

JAKARTA - The government through the Ministry of Finance (Kemenkeu) decided to continue the House Value Added Tax (PPN) incentive for the 2022 period for 9 months.

Head of the Fiscal Policy Agency (BKF) Febrio Kacaribu said that the extension of the facility was contained in PMK No. 6/PMK.010/22 concerning Value Added Tax on the Delivery of Landed Houses and Flats Covered by the Government for the 2022 Fiscal Year which was set on February 2, 2022.

“This incentive is expected to be effective in increasing people's purchasing power and supporting the housing sector with a large multiplier effect on the national economy. We are trying to maintain the sustainability of the recovery momentum in 2022 so that it will be even stronger, especially in the first and second quarters," he said in an official statement, Tuesday, February 8.

According to Febrio, fiscal policy so far has been very supportive of the property sector, especially for low-income people (MBR). In detail, this year's VAT incentives for the housing sector will be reduced in a measurable manner (tapering).

The amount of VAT borne by the government (DTP) is 50 percent on house sales with a maximum of IDR 2 billion, and 25 percent on home sales with prices above IDR 2 billion to IDR 5 billion.

"To be able to take advantage of DTP VAT, Taxable Entrepreneurs must first register through an application at the ministry that carries out government affairs in the housing sector or the Public Housing Savings Management Agency no later than March 31, 2022," said Febrio.

The requirements for obtaining the 2022 DTP VAT facility include the signing of the sale and purchase deed, the sale and purchase agreement in full, the submission of ready-to-occupy units as evidenced by the minutes of handover from January 1, 2022 to September 30, 2022 at the latest.

In addition, the house receiving the facility is the first house submitted by the seller's Taxable Entrepreneur who organizes the construction of a landed house or flat and has never been transferred.

For information, VAT incentives for the property sector in 2021 were also provided with a 100 percent tax exemption for occupancy of up to Rp. 2 billion and 50 percent for occupancy of Rp. 2 billion to Rp. 5 billion.

“This incentive extension is still in line with sound and sustainable fiscal management. We hope that people will take advantage of this incentive to help the Indonesian economy recover stronger in 2022," Febrio concluded.