Government to Cover VAT on Houses Under IDR 2 billion
Tuesday, 24 October 2023
JAKARTA. The government plans to provide a Government-borne Value Added Tax (VAT) facility for the purchase of houses under IDR 2 billion for Low-Income People (MBR).
This policy is an effort by the government to encourage the property industry to recover. The reason is, currently the contribution of the property sector to the economy is still low.
If left unchecked, it will have an impact on overall economic activity. Given, the property industry has a large multiple effect on other industries.
Quoting kontan.co.id, as stated by the Coordinating Minister for Economic Affairs Airlangga Hartarto, this policy has even received the approval of President Joko Widodo (Jokowi) and will be implemented in two stages.
The first stage, for house purchases until June 2023, VAT will be covered at 100%. Meanwhile, if the purchase is made after June, VAT will be covered at a maximum of 50%.
Apart from that, the government will also provide administrative assistance for low-income people's homes amounting to IDR 4 million. This assistance will be provided until 2024.
For your information, the Government-borne VAT policy for house purchases is not a new incentive scheme. Previously, the government had taken similar steps during the pandemic.
This is as regulated in the Minister of Finance Regulation (PMK) Number 103/PMK.010/2021 which was issued in February 2022 and PMK Number 6/PMK.010/2022. (ASP/KEN)
