Tax on apartment houses

JAKARTA (JP): In addition to the 10 percent Value Added Tax (VAT), the sale of apartment houses of more than 150 square meters will also be subject to a luxury tax of 10 percent.

Tax Director General Fuad Bawazier said yesterday that the sales tax on the transfer of such apartments, enacted with the Minister of Finance Decree No. 644/KMK.04/1994 issued last December, became effective in January of this year.

He said, however, that if a buyer had settled payment for such an apartment before June 21, he or she is not required to pay that tax to the seller nor must it be stated in a tax return, provided that the seller has already paid the VAT on the sale.

If the seller has not paid the VAT, the seller will bear the responsibility of paying that tax obligation, Fuad said in a circulation letter issued to clarify the collection of the sales tax on luxurious goods and apartment houses.

He said that if the buyer did not pay off the apartment by June 21, he is required to pay the luxury tax at a rate calculated on the basis of the remaining installments.

Fuad said that the tax rebate will only affect the apartments sold in or after January.(hen)