Building Criteria Subjected To VAT 2.4 Percent In 2025, Don't Make Everything

YOGYAKARTA - The government will impose a Value Added Tax (VAT) of 2.5 for people who build their own homes. The policy of imposing this tax is planned to be implemented next year.

This discourse also attracted public attention, especially for those who intend to build houses independently. Please note that this policy is not applied to everyone. There are building criteria that are subject to 2.4 percent ppn in 2025.

The provisions regarding VAT for the construction of your own house and the amount are already contained in the Minister of Finance Regulation. So that you don't misinterpret, let's understand the criteria for buildings imposed by VAT 2.4 percent next year.

The imposition of VAT, in this case, has certainly been taken into account by the government. This house construction tax plan adjusts to the general increase in VAT which is 12 percent starting January 1, 2025.

Provisions related to VAT in the construction of independent houses and tariffs have been regulated in PMK Number 16 of 2022 concerning VAT on Self-Construction Activities. In the regulation, it is written that the amount of tax if building your own house is set at 20 percent of general VAT. If VAT increases to 12 percent in 2025, the tax rate for self-constructing houses will be 2.4 percent.

"The amount as referred to in paragraph (1) is the result of a 20 percent multiplication with a Value Added Tax rate as stipulated in the Value Added Tax Law multiplied by the basis of tax imposition," wrote Article 3 paragraph 2 PMK Number 61/PMK.03/2022, quoted Monday (16/9).

The understanding of what is self-building is explained in Article 2 paragraph (3) PMK 61/2022, namely self-building activities, namely building activities, both new buildings and the expansion of old buildings, which are carried out not in business activities or work by private people or entities whose results are used by themselves or used by other parties.

The building is in the form of one or more technical constructions that are planted or fixedly attached to one unit of land and/or water. The criteria for buildings that VAT can wear are:

Thus, for people who want to build their own but carry an area of 200 square meters, there is no need to worry because they will not be subject to VAT.

The staff of the Minister of Finance (Menkeu) Yustinus Prastowo said that the imposition of VAT did not occur to everyone. He said that taxes are only imposed if they meet certain criteria, namely a building area of at least 200 square meters.

Yustinus also said that the imposition of taxes is proof from the government which is in favor of the lower middle class. Based on the provisions that have been regulated, it means that VAT building houses is only imposed on the rich.

In addition, the lower middle class community is also assisted by the government with several facilities so that they can own a house. The facilities provided include VAT incentives borne by the government or DTP when buying a milk house or landed.