Taxes at acquisition
Indonesia levies different taxes depending on whether you buy off-plan (new construction) or resale, and whether the title is HGB (buildings-rights) or a leasehold.
| Tax | Rate | Base | Notes |
|---|---|---|---|
| PPN (VAT) | 11% | Off-plan purchase price | Usually included in sticker price for new units |
| PPnBM (luxury tax) | 20% | Units above IDR 30 billion (~USD 1.85m) | One-off; applies to houses/villas only |
| BPHTB (transfer duty) | 5% | Above IDR 60m allowance | Only on HGB/PT PMA acquisitions |
| PPh 4(2) (lease tax) | 10% | Full lease consideration | Paid by landowner; often passed to buyer |
| Notary (PPAT) fees | 1% | Transaction value | Both parties (usually 50/50) |
Annual holding taxes
- PBB (Land & Building Tax): 0.1% for value below IDR 1bn, 0.2% up to 5bn, 0.3% above. Payable to the local regency.
- PT PMA corporate tax (if applicable): 22% on net profits.
- Villa operational licence fees (Pondok Wisata renewal): IDR 3โ8m/year.
Rental income taxation
How rental income is taxed depends on the ownership structure:
| Structure | Tax rate on rent | Deductible costs? |
|---|---|---|
| Leasehold in personal name (non-resident) | 20% withholding (final) | No |
| Leasehold in personal name (tax resident with NPWP) | 10% final PPh 4(2) | No |
| PT PMA (villa rental) | 22% CIT on net profit | Yes โ all operating expenses, depreciation |
| Hak Pakai (personal, non-rental) | n/a โ no rental permitted | โ |
Taxes at exit / sale
| Item | Rate | Notes |
|---|---|---|
| Final income tax on property sale | 2.5% | Of gross sale price, not gain |
| BPHTB (buyer's transfer duty) | 5% | Paid by the incoming buyer |
| Corporate exit (PT PMA share sale) | 22% CIT on gain | Alternative to asset sale |
Selling via a PT PMA share deal (rather than an asset transfer) can be significantly more tax-efficient for foreign investors who need to repatriate USD.
Double-taxation treaties
Indonesia has active DTAs with 70+ countries including the UK, Germany, France, Netherlands, Singapore, Australia, USA and UAE. Most reduce withholding on repatriated dividends from a PT PMA from 20% to 10โ15%, and eliminate double taxation of rental income where the treaty allocates taxing rights to the country where the property is located (Indonesia) with foreign tax credit at home.
Need a tax-efficient structure?
Our partner Bali notaries and tax consultants can advise on the optimal setup for your goals โ leasehold, PT PMA or mixed.
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