On 29 May 2019, Government of Republic of Indonesia promulgated Ministry of Finance Regulation Number 81/PMK.010/2019 (MoFR 81/2019) which regulated the exemption of Valued Added Tax (VAT) for delivery of public house, pondok boro, student dormitory and other houses. Exemption of VAT for types of houses as explained above was previously regulated in Minister of Finance Regulation Number 113 / PMK.03 / 2007 as amended lastly based on Minister of Finance Regulation Number 113 / PMK.03 / 2014.
However, given the price of land and buildings has increased and the suggestion from the Ministry of Public Works and Public Housing, it is necessary to make adjustments to the provisions regarding the restrictions on simple house and very simple house that get VAT exemption facilities.
The delivery of public house (simple house and very simple house), pondok boro, student dormitory and other houses is exempted from VAT.
VAT Exemption Facility for Public House
Requirements for simple house and very simple house that get VAT exemption facilities are as follows:
- building area does not exceed 36 m2;
- the selling price does not exceed the selling price limit, provided that the selling price limit is based on the combination of zones and years that appropriate as listed in the Appendix of Minister of Finance Regulation 81/2019;
- the first house owned by a private person that belongs to a low income community group, used alone as a residence, and is not transferred within 4 (four) years of possession;
- land area not less than 60 m2; and
- its acquisition is carried out in cash or funded through subsidized or non-subsidized credit facilities, or through financing based on sharia principles.
Limitation of the selling price of simple house and very simple house that get the VAT exemption facility which is divided into several zones, including:
- Java Zone, with a 2019 selling price limit of Rp140,000,000, and in 2020 of Rp150,500,000;
- Borneo Zone with a 2019 selling price limit of Rp. 153,000,000 and in 2020 at Rp. 164,500,000;
- Sulawesi Zone, Bangka Belitung, Mentawai Islands and Riau Island with a limitation of the selling price in 2019 of Rp146,000,000 and in 2020 of Rp156,500,000;
- Maluku, North Maluku, Bali and Nusa Tenggara, Jabodetabek and Anambas Islands, Murung Raya Regency, Mahakam Ulu Regency with a limitation in selling prices in 2019 of Rp 146,000,000 and in 2020 of Rp156,500,000;
- Papua and West Papua zone with the selling price limit in 2019 of Rp212.000.000 and in 2020 of Rp219.000.000.
VAT Exemption Facility for Pondok Boro
Pondok boro that get VAT exemption facility is simple building, in the form of multi levels building or non multi levels buildings, which are built and funded by individuals or work cooperatives or employee cooperatives, which are intended for permanent workers or low income informal sector workers, with the provision that it is not transferable within 4 years since the acquisition.
VAT Exemption Facility for Student Dormitory
Student Dormitory that get VAT exemption facility is simple building, in the form of multi levels building or non multi levels buildings, which are built and funded by university or school, individuals and/or the Regional Government, which are specifically intended for student or college student accommodation. , with the provision that it is not transferable within 4 years since the acquisition.
VAT Exemption Facility for Other Houses
Other Houses that get VAT exemption facilities are:
- worker’s house that built and funded by a company for its employees, with the provisons that (a) not transferable within term 4 years since acquisition, (b) if the building is not multi levels, the building area does not exceed 36 m2, and the land area is not less than 60 m2, and (ii) if the building is multi levels, it must comply with the provisions of a simple flat.
- building which intended for victims of natural disaster which funded by the government, private sector, and/or non-governmental organizations.
I Gusti Made Rajendra Nananjaya