• Monday, 14 October 2024

Govt. Plans 2.4 Pct Self-Construction Tax Starting January 2025

Govt. Plans 2.4 Pct Self-Construction Tax Starting January 2025

SEAToday.com, Jakarta - The government will increase the amount of Value Added Tax (VAT) for self-build or without a contractor to 2.4 percent from January 2025. This is an increase of 0.2 percent from the current rate of 2.2 percent. People who plan to build a house without a contractor are advised to prepare for additional costs related to this policy.

The VAT hike is part of a broader plan to increase the general VAT rate from 11 percent to 12 percent as outlined in Law No. 7 of 2022 on Tax Harmonization. The current VAT rate for self-built homes is governed by Finance Minister Regulation No. 61 of 2022.

The VAT applies to both new construction and extensions to existing buildings. However, not all construction activities are subject to VAT, but specific requirements must be met.

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