PPN (VAT) and the PMK 90/2025 incentive

PPN (Pajak Pertambahan Nilai) is VAT at 11% (the HPP law provides for 12% with phased application). It arises when you buy a building from a VAT-registered developer. On a land lease from an individual and a construction contract with a small contractor VAT may not apply, or apply only to the works. Check whether the contract price includes VAT.

Under the PMK 90/2025 incentive the state bears 100% of VAT on the first IDR 2 billion of a new home priced up to IDR 5 billion, handed over in 2026. The buyer must be an individual with an NPWP, including foreigners holding KITAS/KITAP. The property must be a completed house or apartment transferred for the first time. The benefit is up to IDR 220 million. Leasehold (no transfer of ownership), purchase via PT PMA and land without a building are excluded.

The typical Bali buyer's mistake is counting on the incentive when buying a leasehold villa from a developer. Conditions and worked numbers are in the article.

Read more in the blog

• Indonesia's VAT incentive on housing, when it works for a foreigner and when it does not
• Property taxes in Bali and what owners actually pay
• How Much Does a Bali Villa Cost in 2026: Prices by Area and What Drives Them

Related terms

Updated 2026-09-20. Not a public offer. Regulations change, so we cite enacted acts only and update the entry when they do.