Indonesian Government Extends PPN DTP Incentive for Property Sector

Policy Extension and Details

The Indonesian government has officially extended the 100% Value Added Tax (PPN) subsidy for property purchases through Finance Minister Regulation No. 90/2025, effective until December 2026 ²

. This policy continuation is part of the 2025-2026 Economic Package aimed at maintaining economic continuity and strengthening consumer purchasing power, particularly in the property sector - a significant contributor to Indonesia's GDP.

Market Response and Impact

Property platform Rumah123 has reported a 16.8% increase in demand for new property projects in 2025 compared to the previous year ¹

. The demand surge became particularly noticeable from July 2025, with a 30% month-on-month increase in July compared to June 2025. This trend indicates a strong market response to the continued PPN DTP incentive.

Policy Specifications

The PPN DTP incentive applies to:

• Properties priced up to Rp 5 billion
• 100% PPN coverage for homes priced up to Rp 2 billion ²
  Source 2

  https://nasional.kontan.co.id/news/cek-syarat-dan-ketentuan-beli-rumah-bebas-ppn-mulai-januari-2026
• Requires completion of sales transactions or binding sale agreements between January-December 2026

Industry Impact

The insurance industry is also expected to benefit from this policy. PT Asuransi Jasa Indonesia (Jasindo) noted that the incentive could positively impact the property insurance line by increasing both mortgage-financed property purchases (which typically require insurance) and standalone property insurance policies ³

.

Economic Rationale

The government's decision to extend the PPN DTP incentive demonstrates its commitment to supporting the property sector and maintaining economic growth momentum. By reducing the tax burden on property buyers, the government aims to stimulate demand and support developers while helping maintain affordability for consumers.