Explanation of the Luxury Home Tax along with the rules and how to calculate it

A luxury house is the dream of anyone who wants to live comfortably in a residence with loved ones. 

However, when you decide to buy a luxury house, make sure you also know the amount of this luxury home tax. 

This is because luxury residences have their own regulations called Sales Tax on Luxury Goods (PPnBM). 

But, how can a residence be called a luxury house and subject to PPnBM?

Come on, see the full review regarding Sales Tax on Luxury Goods below:

Definition of Sales Tax on Luxury Goods (PPnBm)

PPnBm (Sales Tax on Luxury Goods) is a tax imposed together with Value Added Tax (VAT).

This tax is imposed on the sale of luxury goods, one of which is a house. 

The purpose of this tax is to create a tax balance between low-income and high-income consumers. 

Not only that, PPnBM also aims to control consumption patterns of taxable goods (BKP) which are classified as luxury. 

In addition to the above objectives, PPnBM is also useful in controlling consumption patterns of luxury taxable goods (BKP).

What is PPnBM?

Many people think PPnBM only applies to motorized vehicles. 

In fact, this tax also applies to buying and selling luxury homes. 

The following categories of luxury goods are subject to PPnBM:

- Goods not for basic needs - Goods are only consumed by certain people - Goods are only consumed by people with high incomes - Goods are only consumed to show status or social class

PPnBM Basic Rules

The tax on this house has been stated in a regulation released by the Ministry of Finance in 2019. 

PPnBM is contained in the Minister of Finance Regulation (PMK) Number 86/PMK.010/2019 above from PMK Number 35/PMK.010/2017. 

This regulation regulates the types of taxable goods classified as luxury other than motorized vehicles.

In the PPnBM rules released in 2019, there were several changes and easing from the previous rules. 

This is because the previous regulation is considered no longer relevant to the current development of the property sector. 

This replacement regulation was then introduced to accommodate the needs in the sector.

Luxury House Price Limit

To decide whether a residence can be subject to PPnBM, of course there are separate rules regarding this. 

Based on the new regulation in PMK No. 86/2019, the tax amount is 20 percent for luxury property values ​​worth or more than IDR 30 billion. 

In other words, luxury residences under Rp. 30 billion will be free from PPnBM.

PPnBM in the property sector only applies to primary products from developers to consumers. 

This tax does not apply to transactions between individuals or secondary products.

How to Calculate PPnBM Home

To calculate PPnBM is actually not much different from the calculation of VAT. 

Check out the example case below to make it easier for you to do the calculations:

Sample case

A company or home developer sells a luxury house for IDR 20,000,000,000. 

The house is included in BKP which in addition to being subject to VAT, is also subject to PPnBM at a rate of 20%. 

How much PPnBM should be paid for the house?

Answer:

Basis for Imposition of PPnBM Home Tax: IDR 20,000,000,000

VAT = 10% x IDR 20,000,000,000 = IDR 2,000,000,000

PPnBM = 20% x IDR 20,000,000,000 = IDR 4,000,000,000

If the person selling this luxury house is a non-PKP private person, then the selling price of the luxury house already has an element of VAT in it.

This is because an individual taxpayer who sells luxury BKP and he is not a PKP. 

For this reason, he is not allowed to collect VAT on the goods he sells. 

How? Are you ready to pay PPnBM when you buy a luxury house?

I hope this article is useful for you!

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