JAKARTA, Indonesia has extended its full value-added tax (VAT) exemption on residential property purchases until the end of 2025 to help sustain household demand and support broader economic growth.
The incentive, known as government-borne VAT (PPN DTP), was initially slated to be reduced to 50 percent in the second half of 2025. However, under Finance Ministry Regulation (PMK) No. 60/2025, enacted on Aug. 25, the government opted to maintain the 100 percent waiver for transactions made between July and December 2025.
XYZ Livin Lippo Cikarang. Indonesia extended its full value-added tax (VAT) incentive on residential property purchases until the end of 2025, on Monday, Aug. 25, 2025.
“To safeguard the momentum of Indonesia’s economic growth by stimulating household purchasing power in the housing sector, the VAT incentive for landed houses and apartment units will continue throughout 2025,” the regulation stated.
The scheme grants a full VAT exemption on the portion of a property’s selling price up to Rp 2 billion ($122,000). Eligible purchases include landed houses or apartments priced at up to Rp 5 billion, but only one unit per individual buyer is allowed.
Indonesian citizens must register with a tax ID (NPWP) or national identity number (NIK), while foreigners may also qualify if they hold a tax ID and meet property ownership requirements.
Only new, unsold, and ready-to-occupy units are eligible, provided they are registered with the Public Works and Housing Ministry or the Housing Savings Management Agency (BP Tapera).
The incentive does not apply if down payments were made before July 1, 2025, or if the property is handed over outside the July–December window. Buyers also risk losing eligibility if they purchase multiple units, resell within a year, or if developers fail to issue proper tax invoices and required reports.
This regulation replaces PMK No. 13/2025, which had applied the full VAT exemption from January to June. The government has consistently used VAT relief for housing as a stimulus tool, citing the sector’s strong multiplier effects on construction, manufacturing, and household consumption.
