Property Tax Indonesia
When investing in property in Bali, it’s important to understand what kind of tax liabilities you may incur.
The list below is not exhaustive, but covers the main topics of Property Tax in Indonesia.
Tax on Sale and Purchase of Property in Indonesia
Land and Building transfer duty is levied at an amount of 5% and is payable by the Buyer. The tax is generally calculated based on the transaction value or the assessed value – whichever is higher.
The Sellers tax (tax on income) is 2.5% and is also based on the transaction value or the assessed value – whichever is higher.
A Notary in Indonesia in prohibited from signing the “Akta Jual Beli” (The Deed of Sale and Purchase) until such time as the above tax has been paid.
Lease Tax in Indonesia
Rental income or Lease tax (PPH) is levied in the amount of 10% of the Lease Value for tax residents in Indonesia. For non-tax Residents the Lease Tax due is 20% of the Lease Value.
Land and Building Tax in Indonesia
Land and Building tax or “PBB” (Pajak Bumi dan Bangunan) is levied based on 0.1% of the sale value for properties valued at less than IDR 1 billion or 0.2% of properties valued above this. The sales value of the object (NJOPKP) is determined by the local revenue office. The tax is separated between Land and Buildings. This is due annually based on the date mentioned on the tax application.
Construction Tax in Indonesia
Construction tax is due once the building work is completed. The value of the tax is determined based on the “Rancangan Anggaran Biaya” (RAB) of the building; this is the Construction Budget of the building. The rate of tax is 2% (or 20% of the Value Added Tax amount which is currently 10%). Depending on whether the construction was done in private or with a contractor will determine who is responsible for the tax. If the construction was done by a contractor, this would become the contractors tax liability.
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