100% VAT Exemption for Houses Worth Up to IDR 5 Billion Extended Until December 2025
The government has officially extended the 100% Government-Borne Value Added Tax (VAT) incentive for the sale of landed houses and apartment units until the end of 2025.
This provision is stipulated in Minister of Finance Regulation (PMK) Number 60 of 2025 concerning Additional VAT Incentives on the transfer of landed houses and apartment units, which are borne by the government for the 2025 fiscal year.
Previously, the 100% government-borne VAT incentive for landed houses and apartments was only valid for purchases made from January to June 2025. For the period from July to December 2025, the incentive was previously limited to 50% of the VAT borne by the government.
Upon review, this extension is to stimulate Indonesia’s economic growth. Therefore, a 100% government-borne VAT incentive is considered necessary.
This facility applies to the sale of houses or apartments with a maximum selling price of IDR 5 billion. However, the maximum VAT borne by the government is capped at IDR 2 billion.
Requirements for 100% Government-Borne VAT
To receive the 100% Government-Borne VAT facility, several conditions must be met:
- The property must be a new, ready-to-occupy house or apartment
- The house must have an identity code issued by the Public Housing Savings Management Agency (BP Tapera)
- It must be the first house delivered by a developer who is a VAT-Registered Person (PKP)
- The delivery must take place between July 1 and December 31, 2025, based on the handover document
- Applies to only one housing unit per person
- Applies to individual taxpayers who are Indonesian citizens or eligible foreign nationals
- For house/apartment purchases made in installments, the down payment or first installment must be paid no earlier than July 1, 2025
Issuance of Tax Invoices for Government-Borne VAT
VAT-Registered Persons selling houses or apartments with the government-borne VAT facility are required to issue tax invoices and submit a realization report for the government-borne VAT.
1. Issuance of Tax Invoices
Tax invoices must be prepared correctly and completely, in accordance with the applicable laws and regulations. Among other things, they must include the buyer’s identity, such as name and Taxpayer Identification Number (TIN) or National Identity Number (NIK). In addition, the tax invoice must also include the house identity code in the “name of goods” column.
For the sale of houses or apartments priced at IDR 2 billion or below, the tax invoice must use Transaction Code 07. Meanwhile, for the sale of houses or apartments priced above IDR 2 billion, two tax invoices must be issued: first, a tax invoice with Transaction Code 07 for the portion of the selling price up to IDR 2 billion, and a transaction Code 04 for the portion of the selling price exceeding IDR 2 billion.
2. Reporting
The tax invoices issued must be reported in the VAT Periodic Tax Return by the PKP (seller). This periodic tax return also serves as the realization report for the use of the government-borne VAT facility. (ASP/KEN)
