Government Extends New Home Tax Discount

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The government has finally extended the discount on the Government Borne Value Added Tax or VAT DTP for the purchase of a new house. The discount extension is valid for nine months in 2022.

This extension of the DTP House VAT discount is recorded in PMK Number 6/PMK.010/22 concerning Value Added Tax on the Delivery of Treaded Houses and Flats Borne by the Government for the 2022 Fiscal Year.

The Head of the Fiscal Policy Agency of the Ministry of Finance Febrio Kacaribu explained that the 50 percent VAT discount on houses was given for the criteria for housing in the form of landed houses and flat housing units that were submitted physically during the incentive period.

He said that the extension of this discount program was a form of support from the government’s concern for the national economic recovery (PC-PEN) in 2022 in the situation of handling Covid-19 in Indonesia.

‚ÄúThis incentive is expected to be effective in increasing people’s purchasing power and supporting the housing sector with a large multiplier effect on the national economy. We are trying to maintain the sustainability of the recovery momentum in 2022 to make it even stronger, especially in the first and second quarters,” said Febrio in a press release, Tuesday (8/2/2022).

However, the government reduced the amount of the discount granted. Febrio explained that the government only provided a 50% discount on DTP VAT from the 2021 VAT incentives for DTP.

Reflecting on last 2021, a tax discount was given 100 percent for residences with a selling value of up to Rp. 2 billion. Meanwhile, for housing with a selling value of Rp. 2-5 billion, the tax discount is only 50 percent.

In 2022, incentives are given until the third quarter, which is directed at the delivery of landed houses and flats. “The amount of VAT for DTP is 50 percent on house sales of a maximum of Rp. 2 billion, and 25 percent on house sales with prices above Rp. 2 billion – Rp. 5 billion,” said Febrio.

Furthermore, he detailed the requirements needed to get the discount, namely, delivery occurred at the time the deed of sale and purchase was signed; or the signing of the sale and purchase binding agreement in full, before a notary and the actual transfer of rights to control the landed house/flat ready for habitation.

Ownership of landed houses/flats ready for occupancy is evidenced by the minutes of handover from January 1, 2022, to September 30, 2022, at the latest.

Febrio also added that this DTP VAT can be used more than once because it applies to every individual for the acquisition of one landed house or one apartment unit.
This means that if they have received the DTP VAT incentive in 2021, that person can take advantage of the 2022 DTP VAT again.

It also details the conditions that must be followed to obtain these benefits. The condition is that the Taxable Entrepreneur needs to register in advance through an application at the ministry that carries out government affairs in the housing and settlement areas and/or the Public Housing Savings Management Agency no later than March 31, 2022.

According to him, the extension of this incentive is following healthy and sustainable physical management in helping the national economic recovery.