Tax-Free House Purchase Criteria Under 2M In 2023

Tax-Free House Purchase Criteria Under 2M

YOGYAKARTA - People who want to own a house with a price below IDR 2 billion have good news from the government! The reason is, Sri Mulyani Indrawati as the Finance Minister has exempted Value Added Tax (VAT) to buy a house under IDR 2 billion. So, what are the criteria for buying a house under 2 m free of tax?

This good news is contained in the Regulation of the Minister of Finance (PMK) Number 120 of 2023. It contains a Value Added Tax on the Submission of Taxes and Flats. It is known that houses under IDR 2 billion will be borne by the Government for the 2023 Fiscal Year, which has been set on November 21, 2023.

It is known in the regulation that the government has expanded its dependents regarding the purchase of property from Rp. 2 billion to Rp. 5 billion. But calm down, because even though it is expanded, the provision of incentives is still only Rp. 2 billion!

The contents in article 2 paragraph 1 also state that VAT incentives will be given to buyers of landed houses and apartment units. That is, landed houses that are buildings in the form of residential houses or houses that are graded or not. Reportedly, buildings that partly function for offices or shops are also included in the criteria.

"Meanwhile, the flat unit as referred to in paragraph 1 letter b is a flat unit that functions as a residential area," reads Article 2 Paragraph 3, Saturday, November 25, 2023.

However, there are criteria, namely the unit landed house or flat as referred to must meet 2 criteria from article 2.

Not only that, in Article 4 paragraph 2 it is written that landed houses or housing units must have obtained a house identity code. The landed houses and housing units were also first handed over by the seller's taxable entrepreneur who organized the construction, and had not had time to transfer them.

"The identity code of the house as interpreted in paragraph (2) letter a is the identity code for landed houses and apartment units provided through applications in ministries that carry out government affairs in the field of public work and public housing and/or the People's Housing Savings Management Agency," reads Article 4 paragraph 3.

If the landed house or apartment unit has been paid in advance or installments before the enactment of this new provision, the Minister of Finance said that the purchase of a house will still receive incentives with several conditions.

First, the start of the down payment or first installment to the Taxable Entrepreneurs selling the fastest September 1, 2023.

Second, the fulfillment of the requirements as intended is carried out from November 1, 2023 to December 31, 2024.

"Thirdly, VAT borne by the Government is given only for VAT owed for the remaining installments and repayment paid during the period of granting VAT borne by the government according to this ministerial regulation," read Article 4 paragraph 4.

Finally, Article 7 states that VAT borne by the government is divided into 2 terms. For the period 1 November 20023 to 30 June 2024, 100 percent of VAT is borne by the government. Meanwhile, for the period 1 July 2024 to 31 December 2024, only 50 percent of VAT is borne by the government.

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