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View all search resultsGovt allocates Rp 3.4t to extend housing VAT waiver to 2026
The Finance Ministry has pledged to continue disbursing fiscal incentives for the housing sector in 2026, allocating Rp 3.4 trillion (US$208 million) for a value-added tax (VAT) waiver on home purchases.
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Lofty ambitions: A worker is building a roof of an under-construction house in a subsidized housing estate on Aug. 6 in Bogor, West Java. (Antara/Yulius Satria Wijaya)
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he Finance Ministry has pledged to continue disbursing fiscal incentives for the housing sector in 2026, allocating Rp 3.4 trillion (US$208 million) for a value-added tax (VAT) waiver on home purchases.
The allocation should cover the VAT on 40,000 commercial housing units priced at up to Rp 2 billion to support middle-class homeownership in the country, according to Finance Minister Sri Mulyani Indrawati.
“The aim is to stimulate all housing segments. [Lower income earners] are given strong support, even in cash for home upgrades, while the [people in the] middle-income group [receive support] in the form of the [VAT waiver],” Sri said in a meeting with the House of Representatives Budget Committee on Thursday.
For this year, the budget plan earmarks Rp 3.38 trillion to provide a 100 percent VAT discount on home purchases, according to the Financial Notes budget planning document presented earlier this month.
Under Finance Ministry Regulation No. 13/2025, a full VAT waiver applies to homes bought between Jan. 1 and June 30, 2025. For home purchases realized between July 1 and Dec. 31, buyers are eligible for a 50 percent discount on the VAT.
However, both the full and the partial VAT discount only apply to up to Rp 2 billion of the price of homes costing no more than Rp 5 billion.
The finance minister explained that the government had separately allocated Rp 57.7 trillion in the state budget to support the implementation of the 3 Million Homes program, a key policy of the President Prabowo Subianto administration to deliver on an election campaign promise.
