Tax Incentives for House Purchases: Eligibility of Buyers

The government of Indonesia provided tax incentives for the sale and purchase of landed houses and flats from November 1^st, 2023. The policy had been effective through the Minister of Finance Regulation Number 120 of 2023 (PMK-120/2013). This information was explained further by Puja Aldila, tax officer of Foreign Investment One Tax Office on Instagram live broadcast, Jakarta (Wednesday, 6^th/12).

The tax incentive offered by the government is Value Added Tax Borne by Government (PPN DTP). This facility is granted for house purchases with a maximum selling value of IDR 5 billion and a maximum tax base value of IDR 2 billion. However, there are several criteria that must be met to utilize this incentive: from the buyer's eligibility to the types of transaction.

Buyers who can get this facility are Indonesian citizens with one Indonesian Identity Card (KTP) or one Taxpayer Identification Number (NPWP) used for one home purchase transaction. Likewise, foreign nationals can also use these incentives as long as they have a TIN and meet the applicable laws and regulations.

The public can use the 100% VAT DTP facility when the transactions are made from November 1^st, 2023, to June 30^th, 2024. Meanwhile, the rate of tax facility will be cut to 50% for the transactions made from July 31^st, 2024, to December 31^st, 2024. "The sooner people make transactions, the better for them as they can get this (100% rate) facility," said Puja Aldila while airing on Instagram live that afternoon.

Puja explained that the housing unit referred to the VAT DTP facility is a new house and is ready for occupancy. Puja added, "The purchased house is not for resale in the next one year."

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