To encourage national economic growth, especially in the housing industry sector, the government provides incentives in the form of Value Added Tax Borne by the Government (“PPN DTP”) on transfer of landed houses and apartment units based on Minister of Finance Regulation No. 120 Year 2023 concerning Value Added Tax on the transfer of Landed Houses and Apartment Units borne by the Government for Fiscal Year 2023 (“PMK-120/2023”).

The major provisions can be summarized as follows:

a)It applies to Landed Houses and Apartment Units with prices below Rp 5 billion. The PPN DTP is applied on the tax base up to Rp 2 billion, with the summary as follows:

• 100% PPN DTP for transfers within the period 1 November 2023 up to 30 June 2024. The transfer date refers to the Minutes of Handover (Berita Acara Serah Terima);
• 50% PPN DTP for transfers within the period 1 July 2024 up to 31 December 2024.

b)Individuals who have made a down payment or first instalment for a Landed House and Apartment Unit to the Taxable Entrepreneur (PKP) seller before the enforcement of this PMK-120/2023 can enjoy this PPN DTP if the down payment or first instalment was made on or after 1 September 2023, but the facility is granted only for the VAT on the remaining instalments and settlements made during the period of the DTP VAT facility from 01 November 2023 to 31 December 2024.

c)Other requirements:

• Have a house identity code;
• Physical handover of the house is no later than 31 December 2024;
• The new house is transferred in ready to be used condition;
• The facility is for a maximum of one landed house / apartment unit for one person; and
• Not allowed to be transferred again within one year.

PMK-120/2023 became effective on 21 November 2023.