Government Extends VAT Relief for Landed Houses and Apartments in 2025
JAKARTA, investortrust.id - Indonesia’s government officially extends a value-added tax (VAT) incentive for landed houses and apartment units, fully or partially borne by the state, into the 2025 fiscal year, reinforcing a policy designed to stimulate the property sector and sustain economic momentum.
This decision, effective since early February, underscores Jakarta’s commitment to supporting homeownership and related industries.
The extension, formalized through Finance Ministerial Regulation (PMK) No. 13 of 2025, issued on Tuesday, Feb. 4, 2025, builds on similar relief provided in 2023 and 2024. Dwi Astuti, Director of Public Education, Services, and Relations at the Directorate General of Taxation under the Ministry of Finance (Kemenkeu), highlighted its broader impact.
“Property transactions have a significant multiplier effect on other economic sectors. As part of our economic welfare package, this VAT incentive aims to maintain public purchasing power and drive growth across related industries,” she said in an official statement on Saturday, Feb. 22, 2025.
Under the new regulation, purchases of landed houses or apartment units from January 1 to June 30, 2025, qualify for a 100% VAT relief (PPN DTP) on the taxable portion up to Rp 2 billion, provided the total sale price does not exceed Rp 5 billion. For transactions from July 1 to December 31, 2025, the relief drops to 50% on the same taxable threshold.
“For example, if Mr. A buys a Rp 2 billion house on February 14, 2025, the government covers the full VAT. If Mrs. B purchases a Rp 2.5 billion house on February 15, 2025, she pays VAT of 11% on Rp 500 million, or Rp 55 million,” Dwi explained.
She clarified that properties already exempt from VAT do not qualify for this incentive. The policy targets middle-income buyers, aiming to ease homeownership costs while invigorating the economy. “We hope the public seizes this opportunity to own homes, supporting the national property sector and its allied industries,” Dwi added.
The move aligns with broader efforts to bolster economic resilience, though it excludes certain commodities previously considered for similar relief. With the property sector a key driver of growth, Jakarta’s extension of this VAT break signals confidence in its ripple effects, from construction to manufacturing, amid global uncertainties.