Indonesia will fully restore the tax exemption on property purchases through December 2024, covering VAT on up to 2 billion rupiah of the price for eligible homes or apartments. The government will extend this benefit to property purchases up to 5 billion rupiah (about 323,000 USD) for the second half of 2024 to stimulate demand. Chief Economic Minister Airlangga Hartarto stated that this policy aims to support the middle class, whose purchasing power has been affected by the COVID-19 pandemic. Previously, the full VAT exemption ended in June, with only a 50% rebate available since then.
Indonesia has announced that it will fully restore the tax exemption on property purchases until December 2024. Indonesia will restore the full tax break on property purchases up to 5 billion rupiah (about 323,000 USD) for the second half of 2024 to boost demand, according to the chief economic minister.
Under the policy, the government will pay the VAT on up to 2 billion rupiah of the price for eligible homes or apartments. Chief Economic Minister Airlangga Hartarto said the policy change is meant to help the middle class, whose buying power has been weakened by the ongoing COVID-19 pandemic.
Before the announcement, the policy that covered the full VAT on property purchases had ended in June. Since then, the government had only been offering a 50% VAT rebate until the end of the year.
In summary, Indonesia's restoration of the full tax exemption on property purchases until December 2024, which includes VAT coverage for eligible homes priced up to 2 billion rupiah and extends to 5 billion rupiah for the latter half of 2024, is a strategic move aimed at revitalizing the real estate market and supporting the middle class. This initiative comes in response to the economic challenges posed by the COVID-19 pandemic, reflecting the government's commitment to enhancing purchasing power among its citizens.
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