Sri Mulyani's Men Bring Good News! Government Releases Extended VAT Incentive For DTP Property Until December 2021

Illustration (Photo: Doc. Antara)

JAKARTA - The government through the Ministry of Finance (Kemenkeu) has finally released the extension of the Government-Borrowed Value Added Tax (PPN DTP) facility for the property sector which is valid until December 2021.

Head of the Fiscal Policy Agency of the Ministry of Finance Febrio Kacaribu said the policy was contained in Minister of Finance Regulation number 103/PMK.010/21, which is a follow-up policy to the previous regulation which has an effective period of March-August 2021.

"This extension is part of the National Economic Recovery (PEN) program, which now has an allocation of IDR 744.75 trillion," he said in an official statement, Tuesday, August 10.

According to Febrio, this property tax discount incentive needs to be extended to provide consumption stimulus to maintain the rhythm of economic recovery.

"The extension of the DTP Property VAT facility is carried out to encourage investment by middle class households who are held back due to PPKM," he said.

Febrio added that the middle class itself was considered not too affected by the pandemic. However, they tend to hold back the pace of consumption because of impaired confidence in carrying out activities.

"Through the extension of the facility, the government hopes that the middle class will continue to make optimal use of it to stimulate activities in the housing sector," he said.

To note, the tax discount incentive in the form of VAT DTP facilities is given 100 percent for houses or units with a maximum selling price of Rp. 2 billion, and 50 percent for houses or units with a selling price of above Rp. 2 billion to Rp. 5 billion.

For information, in the second quarter of 2021, the real estate services sector was able to grow 2.82 percent year-on-year (yoy). The book was higher than the previous quarter which was 0.94 percent yoy.

Meanwhile, the construction services sector grew by 4.42 percent yoy, up from minus 0.79 percent in the first quarter of 2021 yoy.

In addition, Home Ownership Loans (KPR) and Apartment Ownership Loans (KPA) in the second quarter of 2021 also experienced acceleration. Consumer credit has been able to return to positive growth, with a record of 1.3 percent yoy in May and 1.9 percent yoy in June after five months of negative growth.

“Housing loans contribute about 33 percent of total consumption loans. The momentum for this recovery needs to be maintained," he stressed.

Meanwhile, in terms of manpower, last year the housing sector employed nearly 8.5 million people or 6.59 percent of the total national workforce.