The Indonesian government has recently broadened its scope
of tax incentives pertaining to value-added tax (VAT) for prospective
homebuyers. Initially targeting residences priced at a maximum of Rp 2 billion,
this policy extension now encompasses properties valued up to Rp 5 billion. The
intention behind this expansion is to sustain economic momentum amid prevailing
global uncertainties. However, it's noteworthy that the VAT subsidy offered by
the government remains limited to homes valued up to Rp 2 billion.
For houses falling within the price range of Rp 2 billion to
Rp 5 billion, VAT obligations persist. The government's subsidy covers the
initial Rp 2 billion of the property's cost. This tax incentive is applicable
to the acquisition of a single house per individual's unique identity number
(NIK) or taxpayer identification number (NPWP) from November 2023 until
December 2024. The imminent issuance of the finance minister's regulations is
expected this November, as they near the finalization phase.
The implementation of the VAT subsidy will unfold in two
phases. Initially, a full 100% tax incentive will be extended from November
2023 to June 2024. Subsequently, a reduced 50% incentive will be in effect from
July through December 2024.
In addition to these measures, the government has outlined
plans to provide support for low-income households, offering assistance that
covers administrative expenses associated with homeownership, including
property and land acquisition fees (BPHTB), among other related costs, with a
cap at Rp 4 million.
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