Understanding the system of property taxes in Bali can be quite complex for foreigners interested in buying real estate property in Bali. Finding relevant information in English can be challenging. It is even harder to stay up-to-date on the ever-changing laws and regulations. In Bali, multiple annual property and rental income taxes must be paid individually or potentially by a foreign-owned company. This Bali tax guide helps property buyers, sellers, and owners to understand the complex tax system.
Annual taxes for property in Bali
1. Land and Building Tax (PBB)
When owning property in Bali, you must pay the annual land and building tax, which is officially called Pajak Bumi dan Bangunan (PBB) in Indonesian. It is the most basic type of all property taxes in Bali. All individuals or entities owning real estate in Bali and other Indonesian regions must pay the PBB tax to the Directorate General of Taxes (Direktorat Jenderal Pajak, Kementerian Keuangan Republik Indonesia).
How much PBB tax you have to pay depends on the value of the land and the construction on it. The land and buildings are valued separately. As PBB is a progressive tax, you pay a higher tax for properties of a higher value. The table below gives an overview of the land and building tax.
| Tax base | Tax rate |
|---|---|
| Up to IDR 200 million ($13.560) | 0,01% |
| IDR 200 million ($13.560) – IDR 2 billion ($135.600) | 0,10% |
| IDR 2 billion ($135.600) – IDR 10 billion ($678.000) | 0,20% |
| Over IDR 10 billion ($678.000) | 0,30% |
You may be entitled to a 50% property tax reduction if the land and buildings are used for nonprofit activities. Think about social and educational purposes or health care services.
Who pays the land and building tax?
All individuals or entities owning real estate in Bali and other Indonesian regions.
When do you pay the land and building tax in Bali?
You pay the land and building tax annually to the Directorate General of Taxes.
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Rental income taxes in Bali
1. Rental income tax / Lease tax (PPH)
All real estate owners in Bali who rent out their property must pay rental income taxes. This tax, also called lease tax, is a percentage that is applied to the property’s gross rental income. Property owners report the total rental income on their annual tax returns, which means the rental income tax is paid annually. Indonesian tax residents (this can be Indonesian nationals as well as foreigners) pay a lower tax rate than non-tax residents.
Do you lease a property and rent it out? In that case, you have to pay rental income tax as well. The rental income tax differs from personal income tax. This means you might have to pay tax over the rental income twice (rental income tax and personal income tax). The table below gives an overview of the rental income tax.
Only individuals pay rental income tax, which means that legal entities such as a PT PMA don’t pay rental income tax. Instead, they pay corporate income tax on the rental income that’s earned with the property.
| Withholding Tax | Tax rate |
|---|---|
| Indonesian tax resident | 10% of the gross rental income |
| Non-tax residents | 20% of the gross rental income |
Who pays the rental income tax?
Indonesian and foreign individuals who rent out property in Bali and other Indonesian regions.
When do you pay the rental income tax in Indonesia?
The rental income tax is paid annually.
2. Corporate income tax
In Indonesia, real estate property can be owned by an individual or a legal entity, such as a PT PMA (foreign-owned company). Many foreigners buy and rent out a property with a PT PMA. In that case, corporate income tax must be paid on the income and capital gains earned with the property. The income is taxed at a flat rate of 25%.
| Type | Tax rate |
|---|---|
| Income from property in Bali | 22% |
Who pays the corporate tax?
Companies, such as PT PMA (foreign-owned company), pay corporate tax.
When do you pay corporate tax in Bali?
The annual filing deadline for corporate tax in Bali is set at the end of the 4th month after the tax year ends. The payment deadline is set for the 15th of the following month.
3. Personal Income Tax
The personal income tax is a progressive tax that is graduated according to the yearly income of Indonesian tax residents. Not only Indonesian nationals could be seen as Indonesian tax residents, but also foreigners who stay more than 183 days over a year in Bali or other Indonesian regions are considered tax residents in the South-East Asian country.
Not only rental income and capital gains earned onshore and offshore are subject to personal income tax, but income from employment, dividends, interest income, and royalties earned onshore and offshore are subject to personal income tax. The table below shows an overview of Indonesia’s personal income tax.
| Income | Tax rate |
|---|---|
| Up to IDR 60 million ($3,780) | 5% |
| IDR 60 million ($3,780) – IDR 250 million ($15,750) | 15% |
| IDR 250 million ($15,750) – IDR 500 million ($31,500) | 25% |
| IDR 500 million ($31,500) – IDR 5 billion ($315,000) | 30% |
| Over IDR 5 billion ($315,000) | 35% |
Who pays personal income tax?
Indonesian and foreigners who live in Bali (or other Indonesian regions) and are tax residents in Indonesia pay the personal income tax.
When do you pay personal income tax?
The annual filing deadline is set at the end of the 3rd month after the tax year ends. The payment deadline is set for the 15th of the following month.
Transfer of land and buildings taxes in Bali
1. Land acquisition tax (paid by the seller)
Someone who sells a villa in Bali, or any other type of real estate, has to pay the land acquisition tax. The land acquisition tax for property in Bali and other Indonesian regions is set at a flat tax rate of 5%. This 5% is applied to the transaction value or the assessed value of the Balinese property, whichever is higher.
Anyone engaged in property development in Bali pays a lower land acquisition tax of 1% on transfers of simple houses or apartments. The table below shows an overview of the land acquisition tax.
| Type of seller | Tax rate |
|---|---|
| Individual seller of the land or property | 5% |
| Seller of simple houses/apartments who are engaged in property development | 1% |
Who pays the land acquisition tax?
The seller of the property pays the land acquisition tax.
When do you pay the land acquisition tax in Bali?
You pay the land acquisition tax during the Bali real estate transaction.
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2. Transfer tax (paid by the buyer)
Buyers of property or land in Bali are required to pay a transfer tax, also known as acquisition tax, Land and Building Transfer Duty, or BPHTB. This tax is payable once and is calculated at a flat rate of 5% based on the property’s sale price.
For luxury goods, including luxury houses, apartments, and townhouses, the buyer must pay a luxury-goods sales tax (LST) at a flat rate of 20%.
| Tax base | Tax rate |
|---|---|
| Sale price | 5% |
| Luxury goods | 20% |
Who pays property transfer tax in Bali?
The individual or entity who buys the property pays the transfer tax.
When do you pay transfer tax?
The transfer tax is paid at the moment of the real estate transaction.
Construction Tax
In Bali, property owners must pay a Construction Tax if they plan to develop a building on their land. The tax amount is calculated based on either 2% of the building’s construction budget (Rancangan Anggaran Biaya) or 20% of the Value Added Tax. When a contractor is hired for the construction work, they will be responsible for paying the construction tax. If the construction work is done privately, the property owner is responsible for paying the construction tax.
Who pays the construction tax?
If a property owner develops a building on their land in Bali, they will be responsible for paying the construction tax. If a constructor is hired to manage the construction process, the constructor will be responsible for paying the tax.
When do you pay the construction tax?
The construction tax is typically paid after the completion of the construction project.
Value Added Tax (VAT)
If you’re buying property in Bali from a commercial company, you must pay the Value Added Tax (VAT). The current rate for VAT in Bali is set at 10%. This tax is typically applicable when buying a new house or off-plan building in Bali, and the responsibility of paying the VAT falls on the buyer.
Legal fees for property transactions in Bali
In Bali, property transactions must be completed in the presence of Land Officials. These officials are appointed by either the Head of the National Land Office or a local Head of District and may include notary publics. The cost of this service is typically 1% of the property’s value.
Legal fees may also be charged as a percentage of the transaction costs, ranging from 0,5% to 1,5%. The seller is responsible for paying the agent fees, which are usually around 5% of the transaction value.
Documentary Stamp Tax (DST)
In Bali, the Documentary Stamp Tax (DST) is a mandatory tax imposed on legal documents or instruments that are executed, issued, or transferred. These documents may include but are not limited to, deeds, mortgages, leases, bills of exchange, and other similar instruments. The tax rate for DST is a flat rate of IDR 10.000 ($0,70), and it’s the responsibility of the obligated party to pay the tax.
Get help with property taxes in Bali with Own Property Abroad
Understanding the regulations on property taxes in Bali is challenging. Let Own Property Abroad be your guide to a smooth and stress-free journey in the property world. Our deep understanding and hands-on experience in Bali equip us to support you with legalities, such as property taxes in Indonesia, property discovery, and property management.
Our team can assist you in understanding which property taxes to pay, prepare tax reports, file tax returns, and ensure timely payment of all property taxes. If you want more information on how we can help you with these services, please leave your contact details below or email us at [email protected].
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Frequently Asked Questions (FAQs)
How much tax do you pay in Bali?
How much tax you pay in Bali depends on several factors, such as whether you are an Indonesian tax resident. Besides that, it also depends on how you own property and whether it’s done individually or through a foreign-owned company.
How is property taxed in Indonesia?
Property in Indonesia is taxed in several ways. The property can be taxed on its assessed value, transaction value, or gross rental income earned from the real estate property.
Is it safe to buy property in Bali?
It is safe to buy property in Bali if it is done in the most secure way, which is through a PT PMA (foreign-owned company). There are other ways to buy property in Bali, such as through an Indonesian nominee, altho
How much does it cost to own a villa in Bali?
The price of a villa in Bali depends on the region or village you buy the villa and the size and used materials. In some areas, villas are sold for IDR 1 billion ($67.400), while in other popular areas, villas are priced at IDR 20 billion or more ($1.4 million).
5 Responses
Hi Matt, we’re Enric and Marina from Barcelona.
Congratulations for this website and all the information you provide; sure has helped many people.
We only miss to read about taxes when you sell a renting land contract (with a new villa on it).
Hope you are healthy and succesful.
Many thanks!
Hi Matt,
Does a buyer need and also pay for one’s own legal representation when buying land/property?
Also, is the construction tax a 1 off?
For corporate tax, I would assume that things like your running costs and depreciation of assets for household appliances etc) are deducted from any profits of renting it out?
Hi Amin,
A buyer does indeed pay for legal representation when buying land or property in Bali. However, using a legal representation is not mandatory. The costs are deducted from profits, but the depreciation can not.
^ Matt
I see a lot of conflicting information. If I buy a new villa priced at roughly $300,000 USD, what are the one time taxes relating to the sale/transfer? Is it 5% (no luxury tax applies at that level) for PPN? Is that a negotiation as to whether it is paid by Buyer or Seller? Does BPHTB apply? Do any other taxes apply to the sale/transfer? Thank you!
Hi Steve,
You can different types of taxes in this article because there are different taxes for each situation. Unfortunately, it’s impossible to give an answer to your question, as the tax one must pay depends on several factors: Is it leasehold or freehold? Is the seller a commercial company or private person? What is the tax residency status of the buyer? Does the buyer have a Kitas/Kitap or not? The answers to these questions determine which taxes you have to pay.
To get help with property taxes in Bali, please reach out to us at [email protected] with more details about the transaction.
^ Matt