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House Purchase Under Rp2 Billion Now Tax-Free

House Purchase Under Rp2 Billion Now Tax-Free
House Purchase Under Rp2 Billion Now Tax-Free

A new regulation concerning the Government Borne Value Added Tax (VAT DTP) for the purchase of a new house under Rp2 billion has been issued by the Ministry of Finance.

Minister of Finance Regulation Number 120 of 2023 provides tax-free incentives for home buyers under Rp2 billion, and it will come into effect on 21st December 2023, applicable to Indonesian citizens and foreigners with taxpayer numbers.

This incentive is not limited to those who purchase a house with cash; users of Home Ownership Credit (KPR) facilities can also benefit.

In addition, the maximum price of a house that can qualify for a tax exemption is Rp5 billion, but the government only covers the first purchase tax up to Rp2 billion.

There are two periods for providing this incentive.

The first period runs from 1st November to 30th June, during which the government offers a 100 percent exemption with a maximum limit of Rp2 billion. The second period starts from 1st July to 31st December 2024, but the incentive drops to 50 percent.

Moreover, the house that receives the incentive must be a new, empty house, priced under Rp5 billion, and possess a house identity code.

To be eligible for the incentives, the buying and selling process must take place between 1st November 2023 and 31st December 2024.

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