Indonesia Government Exempts 100% VAT & Subsidizes for Houses Under Rp 2 Billion

TAX-JAKARTA. President Joko Widodo (Jokowi) has finally given his approval to provide value-added tax (VAT) incentives borne by the government and cheap administrative cost subsidies.

This was conveyed by the Coordinating Minister for Economic Affairs, Airlangga Hartarto, in his speech at the BNI Investor Daily Summit 2023 event at Hutan Kota by Plataran, Jakarta, Tuesday (24/10).

Airlangga said the provision of these incentives is an effort by the government to reduce the housing backlog.

Because, based on data from the Ministry of Public Works and Public Housing (PUPR), the housing backlog or the gap in public housing ownership is still as much as 12.1 million houses.

"Earlier, the president has given approval that in the future VAT for properties will be borne by the government until June 2024," said Airlangga in his speech.

So, until June 2024, the government will provide 100% VAT DTP incentives. Then, from July to December 2024, the government will cut these incentives by 50%.

"After June until December, 50% will be borne by the government," he said.

Meanwhile, for Low-Income Communities (MBR), the government will continue the program of subsidizing housing administrative down payment costs by IDR 4 million.

"For low-income people, the administrative costs which are usually around IDR 13.3 million will be borne by the government IDR 4 million," concluded Airlangga.