Government Extends VAT Exemption for House Sales Government Extends VAT Exemption for House Sales

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If you are planning to buy a house, this year might be a good time. Based on the regulation of the minister of finance number 103/PMK.010/21 (PMK-103/2021), the Value Added Tax (VAT) exemption for house sales has officially extended until December 2021. In those periods, the VAT will be born by the Government.

The incentive is provided for the sale of residential landed houses, including houses partly used as shops or offices and residential apartment units. Those must be new houses with a house identity code from the Government, have never been traded, and have a maximum selling price of IDR5 billion.

Indonesian citizens who owned Tax Identification Number (NPWP) and Single ID Number (NIK) are eligible to utilize the incentive. Foreigners are also eligible as long as they have NPWP and meet the qualifications for the ownership of landed houses or apartment units for foreigners. They can only buy one landed house or one apartment unit under this incentive.

The VAT exemption is given in a dual-tier tariff; 100% for houses with a maximum selling price of IDR2 billion and 50% for houses with a selling price of more than IDR2 billion up to IDR5 billion. The seller who acted as a taxable entrepreneur under the VAT Rule is also required to make a tax invoice and file the incentive realization report.

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