The Government Officially Bears 100% of VAT on Houses Until December 2024, Here are the Conditions

The government will officially bear all Value Added Tax (VAT) payable on the purchase of landed houses and apartment units until December 2024. This is expected to be a stimulus for the housing industry so that it can have an impact on Indonesia's economic growth.

Previously, the government only covered all VAT payable on the transfer of houses for the period January 1-30 June 2024, while for the period July 1-31 December 2024 the VAT borne by the government (DTP) was only 50%. This is regulated through Minister of Finance Regulation (PMK) Number 7 of 2024 which was issued and came into force on February 13, 2024.

The extension of the 100% government-borne VAT facility for September to December 2024 is contained in PMK Number 61 of 2024. The provision is effective from September 19, 2024, and can be used for the September 2024 tax period.

Read: 100% Government-Borne VAT Facility for Housing Extended, Valid until End of 2024

Types of Houses Eligible for 100% Government-borne VAT Incentive

There are two types of houses that receive this facility, namely new landed houses and apartments that meet the requirements. The house has received a house identity code and has just been handed over for the first time by a seller with VAT-registered person status and has never been transferred.

A landed house refers to a building used as a residential house or a row house, either multi-story or single-story, which may be used purely for living or partially for a shop. Meanwhile, an apartment refers to a unit in a building that functions as a residence.

Terms and Conditions for Receiving 100% Government-borne VAT Facility

Not all transfers of landed houses and apartments are eligible for the 100% government-borne VAT facility. There are several terms and conditions to consider, such as the tax base and selling price of the house, the transaction period and handover, eligible taxpayers, and other administrative requirements.

1. Tax Base and Selling Price of the House

The government will only cover VAT for the transfer of houses with a maximum selling price of IDR 5 billion, with the maximum VAT covered by the government being IDR 2 billion from the tax base.

2. Transaction Period and House Handover

If an installment or down payment has been made, houses eligible for the 100% government-borne VAT facility are those with down payments or installments made starting from September 1, 2024. If the payment was made before September 1, the facility cannot be claimed. Additionally, the handover of the house must occur between September 1 and December 31, 2024.

Read: VAT Exemption for Low-Income Houses Renewed

3. Recipients of the 100% Government-borne VAT Facility

Every person, both Indonesian citizens (WNI) and foreign citizens (WNA) is only entitled to get a 100% government-borne VAT DTP facility for one unit of landed house or apartment.

Both Indonesian citizens and foreigners who want to get the 100% government-borne VAT facility must have a Taxpayer Identification Number (TIN). However, foreigners must meet other requirements stipulated by provisions related to homeownership for foreigners.

Tax Invoice for House Transfer with 100% government-borne VAT Facility

For the transfer of houses that receive the 100% government-borne VAT facility, the VAT-registered person is required to issue a tax invoice filled out correctly and completely, including the buyer's name, Taxpayer Identification Number, or Population Identity Number (NIK).

The tax invoice must be reported in the VAT Return. It must include the housing identification code, and be given with the statement "VAT BORNE BY THE GOVERNMENT, EXECUTION OF PMK NUMBER 61 OF 2024.

The tax invoice for the transfer of houses that receive the 100% government-borne VAT facility must also include transaction code 07. In addition to issuing the tax invoice, the VAT-registered person is also required to submit a government-borne VAT realization report to the Directorate General of Taxes. (ASP/SYF/AUD/KEN)