Jakarta. Indonesia has extended its full value-added tax (VAT) incentive on residential property purchases until the end of 2025, in a bid to sustain household demand and support economic growth.

The incentive, known as government-borne VAT (PPN DTP), had initially been set at 50 percent for the second half of 2025. However, under Finance Ministry Regulation (PMK) No. 60/2025, enacted on Monday, Aug. 25, the government decided to keep the subsidy at 100 percent. The policy covers transactions made from July to December 2025.

“To maintain the continuity of Indonesia’s economic growth through stimulating household purchasing power in the housing sector, the VAT incentive on landed houses and apartment units is being applied in 2025,” the regulation stated.

The scheme provides a full VAT exemption for the portion of a property’s selling price up to Rp 2 billion ($122,000). Eligible purchases include landed houses or apartments priced at a maximum of Rp 5 billion.

The incentive is only available for one unit per individual buyer. Indonesian citizens must register using a tax ID number (NPWP) or national identity number (NIK), while foreigners are also eligible provided they hold a tax ID and meet property ownership requirements.

Only new, ready-to-occupy, and previously unsold houses or apartments qualify, with units required to have an official property identity code registered with the Public Works and Housing Ministry or the Housing Savings Management Agency (BP Tapera).

Transactions will not be eligible if down payments are made before July 1, 2025, or if the property is handed over outside the July–December 2025 period. Buyers also lose the benefit if they acquire more than one unit, resell the property within a year, or if developers fail to issue proper tax invoices and submit required reports.

The policy replaces an earlier rule, PMK No. 13/2025, which applied a full VAT incentive from January to June this year.

The government has repeatedly used VAT relief for housing as a stimulus tool, seeking to boost demand in the property sector, which has broad multiplier effects on construction, manufacturing, and household spending.

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