Jakarta. The government’s tax exemption for home purchases has been officially extended through December 2024. Initially, the 100 percent tax discount was scheduled to last until June 2024, followed by a reduced 50 percent discount for the remainder of the year.

Chief Economic Affairs Minister Airlangga Hartarto announced that the policy, approved by President Joko "Jokowi" Widodo, is outlined in the Ministry of Finance Regulation (PMK) No. 61 of 2024. This regulation covers additional VAT incentives for house and apartment purchases for the 2024 fiscal year.

“This tax incentive, endorsed by the President in a recent meeting, provides value-added tax (VAT) relief specifically for the housing sector,” Airlangga said on Friday.

He explained that the policy is designed to boost consumer spending, particularly among the middle class, whose second-largest expenditure tends to be home purchases.

Signed by Finance Minister Sri Mulyani Indrawati on September 11, 2024, Article 7 of the PMK stipulates that the 100 percent VAT exemption applies to properties priced up to Rp 2 billion ($131,781), with a maximum sale price of Rp 5 billion. Previously, the VAT rate was 11 percent of the property’s sale price.