VAT DTP Incentive Extended to 2027 to Reduce Housing Backlog

Economy Minister Airlangga Hartarto told the 2025 Kadin National Meeting in Jakarta that the government will extend the 100 % VAT DTP incentive for house purchases until 2027. The measure had been set to expire in December 2025.

Housing backlog, defined as the gap between available homes and the population’s need, stands at about 9.9 million units. The DTP incentive waives VAT for purchases up to Rp2 billion, while the scheme remains applicable to houses priced up to Rp5 billion, with the excess VAT borne by the buyer. The arrangement is based on Ministerial Regulation No 60/2025 and will be renewed next year pending budget allocation.

By lowering the tax burden, the incentive is expected to accelerate absorption of new homes and cut the housing backlog. It also complements the government’s 3 Million Houses program.