3 types of property sales tax in Indonesia
There are three types of property sales tax in Indonesia to be aware of:
- Personal Income Tax (PIT)
- Corporate Income Tax (CIT)
- Documentary Stamp Tax
Meeting all the requirements for property sales tax in Indonesia helps to ensure a sale’s legitimacy and the transfer of ownership efficiency. In addition to these taxes, other costs might arise when you sell your home in Jakarta, Bali, or other parts of Indonesia, including legal fees, notary fees, real estate agent fees, and home repairs costs.
1. Personal Income Tax (PIT)
Foreigners staying in Indonesia for more than 183 days a year are considered Indonesian tax residents and must pay Personal Income Tax, locally called Pajak Penghasilan Orang Pribadi. The tax is a progressive tax system that increases according to the tax resident’s annual income.
Non-tax residents pay a 20% property sales tax in Indonesia, also known as Withholding Tax, unless a Double Tax Agreement (DTA) exists between Indonesia and the country of residence. With a DTA, the tax rate may be reduced to 10%.
The PIT should be filed by March 31st of the following year, while the payment deadline is on the 10th of the following month. The table below provides a summary of Indonesia’s Personal Income Tax rates.
| Income | Tax rate |
|---|---|
| Up to IDR 60 million ($3,900) | 5% |
| IDR 60 million ($3,900) – IDR 250 million ($16,250) | 15% |
| IDR 250 million ($16,250) – IDR 500 million ($32,500) | 25% |
| IDR 500 million ($32,500) – IDR 5 billion ($325,000) | 30% |
| Over IDR 5 billion ($325,000) | 35% |
2. Corporate Income Tax (CIT)
If a property is owned by a corporate entity, such as a foreign-owned PT PMA company, it must pay Corporate Income Tax on the income and capital gains generated by the property, such as the sale of a property. This can also be used as a rental income tax. The Corporate Income Tax is set at a fixed rate of 22%.
The CIT should be filed by April 30th of the following year, while the payment should be performed by the 10th of the following month.
| Type | Tax rate |
|---|---|
| Corporate income | 22% |
3. Documentary Stamp Tax
This tax is on documents, instruments, or any agreements that evidence the sale or transfer of property. A documentary stamp tax, locally known as a meterai, is integral to a deal’s legitimacy. Most government offices would only validate a transfer with a DST on documents such as the deed of sale. The tax rate is IDR 10,000 ($0.65) and paid when legalizing the paper. Laws regarding stamp duties for electronic documents have been issued but are yet to be implemented.
Additional costs associated with selling property in Indonesia
The property sales tax in Indonesia is one of the major costs of selling property. However, several additional costs include legal fees, brokers, and home repair costs. These other costs can quickly add up and eat into your profits, so it’s essential to budget for them and understand what you’re in for before putting your property on the market.
Legal fees
Legal fees can be a significant expense in selling property, but they can also make a massive impact on the smoothness and success of the sale. Having a power of attorney to sell property in Indonesia is crucial for those who wish to delegate authority or expand their market reach.
A seasoned real estate attorney can protect your interests and simplify the entire transaction, making it a stress-free experience. Legal fees are variable and generally range from 0.5% to 1.5% of the transaction cost.
Notary fees
Notary fees are a subset of legal fees, which new sellers and buyers often overlook. While the amount varies depending on the notary, general practices usually charge at least 1% of the sale price. Notaries charge a higher rate if the transaction is even more complex, such as those involving foreign-owned companies.
Broker’s commission
Those who want to buy and sell property in Indonesia better work with local experts through brokers, realtors, or a reputable real estate company in Indonesia. An experienced broker can help negotiate a sale with the best outcome possible as they know market conditions and where to look for buyers or sellers.
However, since most brokers and realtors in Indonesia are paid on commission, particularly a percentage of the sale price, you should consider their fee in setting your price. Seller agent fees, which are the seller’s responsibility, are usually around 5% of the transaction value.
Home repair costs
Fixups are necessary when you are selling your property to attract more buyers. Savvy buyers even hire home inspectors to ensure the property is well maintained. Setting aside a budget for quick polishing is essential before listing your home on a property marketplace.
Need help with property sales tax in Indonesia? We’re here to assist!
Understanding the taxes involved in selling property in Indonesia can be challenging, with specific requirements such as Capital Gains Tax and other legal obligations. Our team of legal experts is here to guide you through each tax and compliance step, ensuring a smooth and compliant sales process. Whether you need assistance with the full process or specific tax questions, we provide personalized support tailored to your needs. Leave your details below, and we’ll reach out to assist, or email us directly at [email protected] for more information.
Frequently Asked Questions (FAQs)
How much are property taxes in Indonesia?
The property taxes in Indonesia consist of Transfer Tax (BPHTB), which is set at 5%; Land and Building Tax (PBB), which is set at 0.5%; Documentary Stamp Tax, which is IDR 10,000 ($0.65); and Rental Income Tax / Lease Tax, which is set at 10% or 20%. You might have to pay Personal Income Tax (between 5% and 35%) or Corporate Income Tax (25%) on property in Indonesia.
Which property sales tax Indonesia do foreigners pay?
When foreigners sell their property in Indonesia, they have to pay Personal Income Tax (between 5% and 35%), possibly Corporate Income Tax (25%), and Documentary Stamp Tax (IDR 10,000 ($0.65)).
What happens if you don’t pay your taxes in Indonesia?
There are several consequences when you don’t pay your taxes in Indonesia, including a monetary penalty, legal actions (like imprisonment), and asset seizure. You will also have a bad reputation, making it harder to do business in Indonesia.
How much are property taxes in Bali?
The property taxes in Bali are the same as elsewhere in Indonesia and consist of Transfer Tax (BPHTB), which is set at 5%; Land and Building Tax (PBB), which is set at 0.5%; Documentary Stamp Tax, which is IDR 10,000 ($0.65); and Rental Income Tax / Lease Tax, which is set at 10% or 20%. You might have to pay Personal Income Tax (between 5% and 35%) or Corporate Income Tax (25%) on property in Bali.
How much is the Land Acquisition Tax in Indonesia?
The Land Acquisition Tax, locally known as Bea Pengalihan Hak Atas Tanah dan Bangunan (BPHTB), is set at a fixed rate of 5% of the NPOP.
