Is 2026 the right time to purchase property in Indonesia? With the government reinstating the 100% VAT (PPN) incentive, buyers and investors are entering a new strategic phase. In this article, you will understand how this incentive works, who qualifies, and what it means for high-demand markets like Bali.

What Is the 100% VAT Incentive?

Value-Added Tax (VAT/PPN) is typically applied to the purchase of new residential properties from developers. Under the 2026 incentive:

  • Full Exemption: Buyers of eligible new homes and apartments may receive a 100% VAT exemption.

  • Price Caps: The policy applies within specific price brackets and conditions set by the government.

  • Primary Purchases: It is generally limited to new-build residential purchases (not secondary market).

The Bottom Line: This policy allows buyers to save a substantial percentage of the total property price, making Indonesian real estate significantly more accessible.

Why the Government Reintroduced the Incentive

The reinstatement reflects three core economic goals:

  1. Boosting the Property Sector: Real estate is a major driver of job creation and construction.

  2. Encouraging Homeownership: Supporting middle-income buyers in securing their first home.

  3. Strengthening Economic Growth: Stimulating banking, legal services, and local business activity.

What This Means for Bali’s Property Market

Bali remains a powerhouse for real estate due to international tourism and lifestyle migration. In areas like Canggu, Uluwatu, and Denpasar, this incentive could lead to:

  • Lower Upfront Costs: Direct savings on the initial transaction.

  • Faster ROI: Reduced acquisition costs improve rental yield percentages.

  • Market Momentum: Increased competition for well-located premium units.

Strategic Considerations Before Purchasing

While the tax break is a major win, smart buyers should still conduct due diligence:

  • Verify Eligibility: Not all projects qualify; ensure the developer meets government criteria.

  • Payment Timelines: Incentives often depend on completion or handover dates.

  • Long-term Strategy: Tax savings are great, but location and legal clarity (Hak Pakai/HGB) remain the ultimate drivers of value.

Final Thoughts

The reinstated 100% VAT incentive in 2026 presents a meaningful opportunity for property buyers in Indonesia. Whether you are purchasing your first home or expanding your investment portfolio, understanding the structure of this policy can give you a financial advantage.

For those exploring opportunities in Bali, strategic guidance and careful due diligence remain essential.

Explore Your 2026 Property Strategy The 100% VAT incentive is a powerful tool, but its value depends on the quality of the asset and the clarity of the legal framework. At Kibarer Property, we prioritize your long-term security over a quick transaction.

Whether you are looking to verify a developer's eligibility or simply want to understand how the 2026 regulations affect your investment goals, our team is here to provide the data and legal insights you need.

Contact Kibarer Property, we help clients navigate Indonesia’s evolving property regulations while identifying high-performing assets across Bali’s most desirable locations.