Sri Mulyani Extends VAT-free Home Purchase Program

Translator

Dewi Elvia Muthiariny

Editor

Laila Afifa

Rabu, 21 Februari 2024 18:07 WIB

TEMPO.CO, Jakarta - Indonesian Finance Minister Sri Mulyani Indrawati officially extended the government's zero-value-added-tax (VAT) program for home purchases. This program exempts individuals from the standard 11 percent VAT, as stipulated in the Finance Minister’s Regulation (PMK) No. 7 of 2024, which was signed on February 12, 2024.

“In order to boost Indonesia's economic growth, efforts are needed to stimulate people's purchasing power in the housing sector, for this reason, government support in the form of fiscal incentives is needed,” reads one of the points in PMK 7/2024, quoted on Wednesday, February 21.

This housing incentive has been in place since November 2023. With the issuance of PMK 7/2024, it will be extended until December 2024.

“The VAT borne by the government as intended in Article 2 shall be applied to each individual for the acquisition of a landed house or a flat,” reads Article 5 (1) of PMK 7/2024.

Article 7 explains that 100 percent government-funded VAT will be given for house purchases between January 1 and June 30, 2024, while purchases between July 1 and December 31, 2024, will be subject to 50 percent VAT.

This housing incentives program applies to the purchase of a new house priced at Rp2 billion or less.

AMELIA RAHIMA SARI

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