Good news for prospective home buyers! People can now purchase tax-free homes, including both landed houses and apartment units. The government now allows buyers to purchase houses or apartments without paying Value Added Tax (VAT).
This incentive is part of the VAT Subsidy Program, introduced under Finance Ministry Regulation No. 13 of 2025. The regulation, effective as of February 4, 2025, applies to landed houses and apartment units purchased in 2025.
VAT Subsidy Details
The VAT incentive is divided into two periods, with varying benefits depending on the purchase date:
- January 1 – June 30, 2025:
Buyers will receive a 100% VAT subsidy for the portion of the selling price up to 122.137 USD. The maximum eligible selling price is 305.343 USD. - July 1 – December 31, 2025:
Buyers will receive a 50% VAT subsidy for the portion of the selling price up to 122.137, with the same maximum price cap of 305.343 USD.
Eligibility Requirements
To qualify for the VAT subsidy, buyers must meet specific criteria outlined in the regulation:
- The VAT must be payable when signing the Sale and Purchase Agreement (AJB) or the Fully Paid Purchase Agreement (PPJB) before a notary, between January 1 and December 31, 2025.
- The property must be ready for occupancy, and ownership must be formally transferred, as proven by a handover document completed within the same timeframe.
The handover document must be registered by the seller (Taxable Entrepreneur) through the Ministry of Housing’s designated application no later than the end of the month following the handover date.
Eligible Properties
Under Article 4 of the regulation, the properties eligible for the VAT subsidy include:
- Landed houses or apartment units with a maximum selling price of 305.343 USD.
- Brand-new properties that are ready for occupancy and equipped with an official property identification code.
- Properties that have never been transferred or sold before.
If a buyer has made a down payment or installment payments prior to the regulation’s enactment, they can still benefit from the subsidy as long as:
- The first payment to the seller (Taxable Entrepreneur) was made on or after January 1, 2025.
- The AJB or PPJB is signed, and the handover document is completed within the eligible period.
According to Article 5, the VAT subsidy is only available for one property per individual, either a landed house or an apartment unit. However, individuals who have already used this incentive before 2025 may still use it again for another property purchase.
Article 6 specifies that eligible buyers include:
- Indonesian citizens with a Taxpayer Identification Number (NPWP) or National Identification Number (NIK).
- Foreign nationals with a Taxpayer Identification Number, as long as they comply with regulations on foreign ownership of landed houses or apartments in Indonesia.
Seller’s Obligations
Sellers (Taxable Entrepreneurs) must comply with the following requirements under Article 8:
- Issue accurate tax invoices that include the buyer’s full name, Taxpayer Identification Number (NPWP), or National Identification Number (NIK).
- Include the property identification code in the tax invoice.
- Submit a VAT Subsidy Realization Report as required by tax laws.
With the new Finance Ministry Regulation in place, owning a house or apartment has become more affordable. This program not only offers significant financial relief but also encourages property ownership among citizens and eligible foreign nationals.
Make sure to meet the requirements and deadlines to take advantage of this tax-free opportunity in 2025!
Source: cnbcindonesia.com, kompas.com
Photo credit: Ari Nuraya via unsplash.com
