Get Your VAT-Free Homes Under Rp 2 Billion Before June 2024

In principle, houses are considered taxable goods (BKP), so they are taxed at the time of sale. Tax, in the form of value-added tax (VAT), is applied to any increase in the value of taxable goods and services that transfer ownership from the producer to the buyer. Recently, Indonesia was abuzz with news of a value-added tax (VAT) exemption for houses.

The government has implemented an extension of the policy granting exemption from VAT for houses priced below Rp 2 billion. It could be said that houses priced under Rp 2 billion will have their VAT fully covered by the government, at a rate of 100%. For a clearer understanding of this information, let's delve into the explanation below.

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Government Policy: Rules for Buying VAT-Free Houses

As we know, the government will provide VAT DTP (government-borne) incentives for the purchase of new houses priced below Rp 2 billion. This is certainly good news for those who are planning to buy a house. This incentive will be applicable from November 2023 until June 2024.

During this period, the incentive will be provided at a rate of 100%. However, after June 2024, the government will bear 50% of the VAT exemption for these houses. Sri Mulyani stated that this expansion aims to sustain economic growth amid high global uncertainty.

Are you interested in VAT-exempt houses? It's crucial to understand certain requirements. This incentive applies to both landed houses and vertical housing units, or apartments. Hence, vertical residences, including luxurious accommodations like penthouses, are not eligible for the VAT-exempt policy.

The transfer of ownership when purchasing a property is conducted through the execution of a sale and purchase deed or the signing of a binding agreement that has been fully paid in the presence of a notary. To take possession of a ready-to-occupy landed house or apartment, the transfer of rights is executed effectively.

Another requirement for VAT-exempt houses is that the initial down payment or first installment must be made before September 2023. The property handover should occur either before November 1, 2023, or after December 31, 2023. Moreover, for landed houses or a single-unit apartment, the transfer must be finalized within one year from the handover date.

Furthermore, the handover should not involve a tax invoice as per the relevant regulations. Taxable entrepreneurs are also not required to report realization reports as intended. The last requirement stipulates that taxable entrepreneurs refrain from registering handover reports as outlined in Article 3, paragraph 3.

Community Excitement: Mortgage Loans in High Demand for Subsidized and Unsubsidized Homes

The implementation of VAT DTP, which has been recently introduced, has garnered a positive response from the public. They are highly excited about the VAT-DTP policy. This can be noticed from the increased demand for mortgage loans for the purchase of houses priced below Rp 2 billion.

According to OJK data, mortgage disbursements in September 2023 reached Rp 18.9 trillion, marking a 12.4% increase compared to the previous month. This is attributed to the more affordable benchmark interest rate set by Bank Indonesia. Additionally, the VAT-DTP policy has further contributed to this trend. It's a golden opportunity for you to purchase a home, such as those offered by Damai Putra Group properties.

If you are looking for a property in CBD Harapan, Indah City, Cluster Kana offers an ideal setting for a family with its premium and strategic location. Not only that, you also have the opportunity to own other types of residences, such as Amara, Parvez, Feia Phase 2, and numerous others.

The Impact of the VAT-Free Housing Policy

The VAT DTP policy is expected to stimulate growth in the property and housing sectors. Its implementation is also relevant for sustaining economic growth in the property sector. Consequently, the government is able to mitigate the decrease in consumer purchasing power caused by inflation.

Therefore, the pressures of inflation and increases in benchmark interest rates must be carefully monitored and considered. This will also have a positive impact on the national economy, particularly in the construction and manufacturing industries. Additionally, this policy is expected to enhance the purchasing power of the population, especially those with lower to middle incomes.

As a result, providing these incentives is seen as the right step in preventing the decline of the property industry. It could be said that VAT DTP is utilized as a savior for the industry sector. This can be observed through significant developments since the onset of the pandemic.

VAT DTP Extended: Damai Putra Group Embraces With Positivity 

The government's extension policy of VAT DTP is warmly welcomed by Damai Putra Group. They believe this policy will help boost house sales, especially for homes priced below Rp 2 billion. This is expected to have a positive impact on the financial performance of the property company, including properties such as Kana, Amara, Parvesh, Feia Phase 2, Ruko Celtic, Asera Nishi, and Sayana Apartment.

Read: Find Residential Properties in Jogja: A Selection of Locations, Facilities, and Low Prices

It can be concluded that houses priced below Rp 5 billion receive a 50% VAT incentive. The VAT-free housing policy is the right step to stimulate growth in the property and housing sectors. Therefore, it is highly anticipated to provide benefits for the community, property entrepreneurs, and the overall national economy.