During the transfer of land and construction rights in Indonesia, both purchasers and sellers should pay specific taxes. Sellers must pay for the income tax on the sale of land or property, and purchasers need to pay for the acquisition tax of land and building rights.
1. Sales Tax (PPH) Owed by Sellers
Sellers must pay for the income tax from the transfer of their land or building rights per the Indonesian Law GR 34/2016:
- 1% for simple flats or simple houses for their transfer of land or building rights
- 2.5% for regular structures, excluding simple homes or apartments for the transfer of their building rights
2. Acquisition Tax (BPHTB) Payable by Buyers
Acquisition duty is imposed on buyers for their acquisition of land or building rights. The rate is 5% and is determined based on the assessed value or transaction value.
3. Rental property tax
a tax that is imposed on property owners in Indonesia who rent out their property to tenants. The tax is calculated based on the rental income earned from the property.
Rental property tax in Indonesia is calculated based on the gross rental income earned from the property. Rental income or Lease tax 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.
Read more on rental property tax in Indonesia