Value Added Tax (VAT)

You have purchased a house in Indonesia and a house is seen by the Indonesian tax authority as a taxable good, which means that a purchase transaction for a house incurs a value-added tax (VAT) or Pajak Pertambahan Nilai (PPN) in Indonesian. As a buyer you are required to pay the VAT to the seller, which can be an individual, property developers or the government. In all these cases, the seller will then hand in the tax to the tax authority.

Since April 2022, the VAT rate applied on the purchase of a house in Indonesia is set at 11%. However, there are some tax exemptions that may apply to you depending on the types of property that you buy:

• Valued-Added Tax Exemption (PPN DTP) ending soon in December 2023

Example 1:

You bought a house in Indonesia for IDR 8 billion (€ 473.000) and you do not meet the conditions required to receive tax exempt. This means that you need to pay 11% ✖ IDR 8 billion = IDR 880 million (€ 52.071) for VAT