Property – VAT incentive extended to 2025

Property – VAT incentive extended to 2025 The Coordinating Ministry for Economic Affairs has announced the continuation of the Government-borne VAT (PPN-DTP) for property purchases in 2025. Coordinating Minister Airlangga Hartarto stated that this incentive is part of the government’s economic stimulus, in alignment with the VAT rate increase to 12% in 2025. Under the scheme, properties priced up to IDR5 bn will receive a VAT exemption on the first IDR2 bn, while the remaining IDR3 bn will be taxed normally. The incentive provides a 100% VAT discount on the first IDR2 bn for purchases made from January to June 2025 and a 50% discount from July to December 2025. (Source : Bisnis Indonesia) Comment : VAT discounts played a crucial role in the presales of Big-4 property companies in 9M24, contributing 26% to CTRA’s presales, 64% to PWON’s, 57% to SMRA’s, and 23% to BSDE’s. This policy, which continues until December 2025, is expected to further benefit these companies, as they still offer landed-houses and apartment units priced below IDR 2 billion. CTRA and PWON are positioned to gain the most, with 48% of their products priced under IDR2 bn, compared to 30% for BSDE and 19% for SMRA.