Property Tax and Sales Costs for Foreigners

Ownership of property for foreigners in Indonesia involves a number of tax obligations and costs that need to be well understood. Let's examine how these tax calculations and expenses work based on the assumptions of a transaction for a house in South Jakarta valued at Rp 5 billion.

First and foremost, Buyer's Tax is an essential aspect of property transactions. Property and Land Tax (PBB) amounts to 0.5% of the Taxable Sales Value (NJKP), which in this case amounts to Rp 9.8 million. Furthermore, the Acquisition of Rights over Land and Buildings (BPHTB) is about 5% of the Transaction Value minus the NPOPTKP, which in this case totals Rp 246 million. In addition, Value Added Tax (PPn) stands at 11% of the Transaction Value, which is Rp 550 million. All of these expenses need to be considered by the buyer.

On the other hand, the seller also has tax obligations. Income Tax (PPh) amounts to 2.5% of the Transaction Value, which is Rp 125 million, that the seller must bear. Property and Land Tax (PBB) is also imposed on the seller, at 0.5% of the Taxable Sales Value, amounting to Rp 9.8 million. The total tax to be paid by the seller reaches Rp 134.8 million.

In addition to taxes, there are additional costs such as the Deed of Sale and Purchase Agreement (PPJB), approximately 1% of the Transaction Value (Rp 50 million), Deed of Sale and Purchase Agreement (AJB), also 1% of the Transaction Value (Rp 50 million), and Non-Tax State Revenue (PNBP), approximately 1/1000 of the Transaction Value plus Rp 50,000 (totaling Rp 5.05 million). All of these must be considered in property transaction planning.

 

Source: Guidelines on Foreigners’ Property Ownership in Indonesia


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