Indonesia extends government-borne VAT on new homes through 2024 under PMK 7/2024

What changed in detail

Minister of Finance Regulation (PMK) No. 7 of 2024, on government-borne VAT on the delivery of landed houses and apartment units for budget year 2024, was promulgated on 13 February 2024. The Directorate General of Taxes (DJP) announced the extension in press release SP-8/2024 on 21 February 2024. The PMK covers deliveries from 1 January 2024 and carries on the incentive that PMK 120/2023 started.

Under Article 7, the government bears the VAT as follows:

• 1 January 2024 to 30 June 2024: 100% of the VAT on the tax base (DPP).
• 1 July 2024 to 31 December 2024: 50%.

The relief applies to the part of the tax base up to Rp 2 billion, and only where the selling price is no more than Rp 5 billion. On a Rp 5 billion house, the VAT borne is 11% of Rp 2 billion, or Rp 220 million.

Other conditions in the release:

• The incentive can be used once, by an Indonesian citizen or a foreign national.
• The unit must be a new house or apartment with a house identity code from the Ministry of Public Works and Housing or BP Tapera application.
• The unit may not be transferred within one year of handover.
• Instalment sales qualify, including those where the down payment or first instalment was paid from 1 September 2023.

What it means

This relief is spent: it covered 2024 deliveries only. It did not stay at 50% for the whole second half of the year. PMK 61/2024 (id-ppn-dtp-housing-pmk61-2024) added a separate incentive that took Masa Pajak September to December 2024 back to 100%. July and August 2024 deliveries stayed at 50%.

The scheme was renewed for 2025 by PMK 13/2025 and PMK 60/2025, and for 2026 by PMK 90/2025 at 100% for the whole year. When checking a 2024 invoice, the tax period decides the rate: 100%, 50% or 100% again.