- In an attempt to broaden opportunities for low-income communities as regards their ability purchase affordable housing, the Minister of Finance has redefined criteria for value-added tax (pajak pertambahan nilai – “PPN”) exemptions for the delivery of housing through the issuance Regulation No. 81/PMK.010/2019 (“Regulation 81/2019”).
- Pursuant to Regulation 81/2019, basic housing (rumah sederhana) and low-income housing (rumah sangat sederhana) which are entitled to enjoy PPN exemptions are required to meet the following criteria: 1) Houses must occupy a total area of 36 m2 at the maximum; 2) Selling prices must not exceed the selling price thresholds, as outlined under the Appendix to Regulation 81/2019; 3) Houses must be low-income buyers’ first houses, must be for personal use only and must not be transferred within a four-year period of ownership being taken; 4) The total land area must amount to at least 60 m2; and 5) Houses must be acquired through cash payments or credit facilities, either subsidized or not, or through funding which follows sharia principles.
- In addition to the above, Regulation 81/2019 also sets out criteria for PPN exemptions for employee dormitories, student dormitories, employee housing and shelters for victims of natural disasters.
- For more on this story, see: “Peraturan Menkeu Terbit, Ini Dia Batasan Rumah yang Bebas PPN”.
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