How Much Is The Tax Tariff For Building Your Own House? This Is An Example Of A Case And How To Calculate It

Illustration of building a house (Unsplash)

YOGYAKARTA Did you know that the government imposed a value added tax (VAT) for Self-Building Activities (KMS) for people who built their homes independently. Then what is the tax rate for building their own house?

It should be noted that the Self-Construction Activity (KMS) is a building activity that is carried out not in the context of business or work activities, both private and body that represents it so that the results of special buildings are self-used without being built by other parties.

The rules related to KMS itself have existed since 1994 through the Decree of the Minister of Finance Number 595/KMK.04/1994 concerning Restrictions and Procedures for Imposing VAT on KMS carried out by individuals or agencies not in the Company or Work environment.

However, the rules have experienced several updates. Most recently, the rules related to the KMS VAT tax are regulated in the latest PMK, namely PMK No. 61/PMK.03/2022 concerning Value Added Tax (VAT) on Self Activities which will take effect as of April 1, 2022.

Referring to these rules, the buildings included in the KMS can be in the form of residential houses, shop houses (ruko), offices, and so on, with the specifications of a building area of at least 200 m2 (two hundred square meters). The construction of the main building itself consists of wood, concrete, pairs of bricks or similar materials, and/or steel. The KMS building, which covers an area of under 200 m2, is not subject to PPN KMS.

In Article 3 paragraph 2 of PMK 61/2022, the tax rate for building your own house is 2.2 percent of the total costs spent in development activities.

How to calculate the tax on self-building activities is actually quite easy. What needs to be considered is whether the buildings built meet the criteria or not. If you meet the KMS development criteria, which is at least 200 m2, it will be subject to 2.2 percent.

For example, Zizek is a worker who works in Yogyakarta. He plans to build his own residence in August 2022. The area of the building he built himself is 100 m2. This area is not included in the taxed building criteria.

However, if the area of the Zizek building is 280 m2 and spends Rp400 million, then Zizek must pay KMS VAT with the following formula.

PPN KMS X Total costs spent, namely as follows.

2.2 percent X 400,000,000 = IDR 880,000

Payment of VAT KMS by Taxpayers can be made using a Tax Deposit Letter (SSP) to the nearest perception bank or post office. Payments are made no later than 15 months after the end of the tax period.

That's information related to tax rates for building your own house. Visit VOI.ID to get other interesting information.