Indonesia's property taxes
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Indonesia's property taxes
A guide to property taxes and transaction costs in Indonesia.
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Image: algenta101 via FlickrCreativeCommonsRumah Gadang, Padang Panjang, Sumatra.
Jun 9, 2016
Very important information to read:
This article is intended as a preliminary guide only and refers to some but not all elements required to consider in detail prior to starting any property dealings or due diligence. Property dealings are often complex, especially in foreign countries and we highly recommend you seek independent professional advice... read more...
This article is intended as a preliminary guide only and refers to some but not all elements required to consider in detail prior to starting any property dealings or due diligence. Property dealings are often complex, especially in foreign countries and we highly recommend you seek independent professional advice... read more...
Taxes on transaction costs
A Land and Building Transfer Duty is levied on the sale of property in Indonesia at a flat rate of 5%, and is charged to the seller. The duty is calculated on the transaction value or the assessed value, whichever is higher.
For transfers of simple houses and simple apartments by taxpayers engaged in property development, the tax rate is 1%.
"This tax must be paid by the time the rights to land and building are transferred to the transferee," says PwC Indonesia's Indonesian Pocket Tax Book.
A Transfer Tax is levied on the sale of property in Indonesia at a flat rate of 5%, and is paid by the buyer.
Luxury goods, including luxury houses, apartments, townhouses and condominiums, are subject to a 20% sales tax.
All property transactions must be executed before Land Officials, namely a notary public appointed by the Head of the National Land Office or a local Head of District. This service costs 1% of the property value.
Legal fees are generally between 0.5% and 1.5% of transaction costs, and agent fees, which are paid by the seller, are around 5%.
Taxes on rental income
Rental income for non-residents is taxed at a flat rate of 20% of gross income in Indonesia.
Income and capital gains earned by companies are taxed at a flat rate of 25% of net income.
A value added tax is levied at a flat rate of 10% on gross rental income.
Annual property taxes
Property taxes are levied at progressive rates.
- Properties with an assessed value of up to 200 million rupiah are taxed at a rate of 0.01%.
- Properties with an assessed value of between 200 million rupiah and 2 billion rupiah are taxed at a rate of 0.10%
- Properties with an assessed value of between 2 billion and 10 billion rupiah are taxed at a rate of 0.20%.
- And property assessed to be worth 10 billion rupiah or more pay 0.30% property tax.
"A 50% reduction in the property tax rate is given to land and buildings used for nonprofit activities, including social and educational activities and health care services," according to Jones Land laSalle's Asia Pacific Property Investment Guide.
Read more:
Very important information to read:
This article and the above linked articles are not complete and are intended as preliminary guides only. These guides refer to some elements to consider prior to starting any property dealings or due diligence. Property dealings are often complex areas, especially in foreign countries and we highly recommend you seek independent professional advice... read more...
This article and the above linked articles are not complete and are intended as preliminary guides only. These guides refer to some elements to consider prior to starting any property dealings or due diligence. Property dealings are often complex areas, especially in foreign countries and we highly recommend you seek independent professional advice... read more...
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