Buyers are now exempt from paying value-added tax (VAT) on property prices of up to Rp2 billion under the renewed VAT incentive scheme.
The government is reinstating a 100% VAT incentive borne by the government (Pajak Pertambahan Nilai Ditanggung Pemerintah or PPN DTP) for the purchase of landed houses and apartments this year. Under this policy, buyers are now exempt from paying VAT on the portion of the property price up to Rp2 billion.
The provision is set out in the Minister of Finance Regulation (Peraturan Menteri Keuangan or PMK) Number 90 of 2025 on Value Added Tax on Landed Houses and Apartment Units Borne by the Government for the 2026 Fiscal Year. The regulation applies from January to December 2026.
“To maintain Indonesia’s economic growth, the government is introducing an economic policy package aimed at public welfare in the form of VAT incentives for the transfer of landed houses and apartment units, borne by the government in the 2026 fiscal year,” the regulation states in its considerations.
The regulation also stipulates a number of requirements that must be met in order to qualify for the VAT incentive, one of them being the incentive is applied only to property purchases made during the tax period from the 1st of January to the 31st of December, 2026. Eligibility is marked by the signing of a deed of sale and purchase before a land deed official, or by the execution of a fully paid and notarised sale and purchase binding agreement.
Eligible properties, meanwhile, include new landed houses or apartment units that are ready for occupancy. Properties that have previously benefited from a VAT exemption, on the other hand, are not entitled to receive this incentive again.
The tax incentive is available for houses or apartments with a maximum selling price of Rp5 billion, with the government-borne VAT applied to the portion of the selling price of up to Rp2 billion. This facility may be utilised by Indonesian citizens and foreign nationals who meet the stipulated requirements. However, each individual is only allowed to claim the incentive for the purchase of one house or apartment.
In addition, taxable entrepreneurs who transfer ownership of a house or apartment are required to issue a tax invoice, submit a report on the realisation of the VAT incentive, and register the official handover minutes of the property.