Reviewed by Florent Delente, Founder, ILA Global Consulting. Last updated: October 2026.

When property changes hands in Indonesia, the buyer pays a 5% acquisition duty (BPHTB) on the price above a regional allowance, and the seller pays a 2.5% final income tax on the gross price, whether or not they made a profit. New property bought from a developer adds VAT at an effective 11%, and in 2026 the government pays that VAT on the first IDR 2 billion of eligible ready homes priced up to IDR 5 billion. Every year after that, the owner pays a regional land and building tax (PBB) capped at 0.5%, and rent from land or buildings is taxed at a 10% final rate.

This guide is for foreigners buying, holding, renting out or selling property in Bali, Lombok, Jakarta and the rest of Indonesia, whether as an individual with a Hak Pakai title, through a leasehold, or through a PT PMA company. It replaces three older ILA articles and fixes rules that changed with the regional tax law (UU HKPD) and the 2025 VAT reform. If you want the numbers run on your own deal, ILA’s accounting and tax team prepares the tax budget before you sign.

All USD figures use one rough rate, IDR 17,900 per USD (Databoks Katadata, 5 October 2026).

Which property taxes apply in Indonesia in 2026?

Modern luxury villa

Tax Who pays Rate in 2026 Base Legal basis
BPHTB (land and building acquisition duty) Buyer Up to 5% (regional) Price or NJOP, whichever is higher, minus the NPOPTKP allowance UU 1/2022 (UU HKPD) and regional regulations
PPh final on transfer (seller tax) Seller 2.5%; 1% for simple houses and simple flats sold by developers whose main business is property Gross transfer value PP 34/2016
VAT (PPN) on new property from a VAT-registered seller Buyer 12% statutory, 11% effective (12% × 11/12); full 12% on luxury residences Selling price PMK 131/2024
2026 VAT relief (PPN DTP) Paid by the government 100% of VAT on the first IDR 2 billion New ready homes up to IDR 5 billion, handover in 2026 PMK 90/2025
Luxury goods sales tax (PPnBM) Buyer, via developer 20% New residences priced at IDR 30 billion or more PMK 86/2019
PPh 22 on very luxury property Buyer, collected by the selling company 1% Houses or flats above IDR 30 billion, or above 400 m2 (houses) or 150 m2 (flats) PMK 92/2019
PBB-P2 (annual land and building tax) Owner or occupier Up to 0.5% (regional) 20% to 100% of NJOP after the NJOPTKP allowance UU HKPD Arts. 40 and 41
PPh 4(2) final on rent Landlord (withheld by corporate tenants) 10% Gross rent PP 34/2017
VAT on self-built buildings (PPN KMS) Owner building without a contractor 2.4% of construction cost Buildings of 200 m2 or more PMK 61/2022
Stamp duty (bea meterai) Party signing IDR 10,000 per document Deeds, agreements, receipts PwC Worldwide Tax Summaries

The central government sets income tax, VAT and luxury tax. Regencies and cities (Badung, Denpasar, Central Lombok and so on) set BPHTB and PBB within the ceilings of UU HKPD, whose regional tax rules took full effect on 5 January 2024 (DDTC). Two villas a few kilometres apart can carry different bills.

How is BPHTB calculated when you buy?

BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan) is the duty paid by whoever acquires a land right: a Hak Milik, an HGB (right to build) bought by a PT PMA, or a Hak Pakai (right to use) bought by a foreign individual. It must be paid before the land deed official (PPAT) signs the deed of sale.

The formula is: BPHTB = rate × (NPOP minus NPOPTKP).

  • NPOP is the acquisition value. It is the transaction price, or the NJOP (the government’s assessed value used for PBB) if the price is unknown or lower (PwC). Declaring a low price therefore does not get you below NJOP, and the regional revenue office can re-assess if the price looks too low against the market.
  • Rate: a maximum of 5% under UU HKPD, unchanged from the previous law (DDTC). Denpasar, for example, applies the full 5% (DDTC on Perda Denpasar 5/2023).
  • NPOPTKP is the non-taxable allowance. UU HKPD sets a floor of IDR 80 million for a taxpayer’s first acquisition in a region and IDR 300 million for inheritance or gifts within the family; each region can set more (DDTC). Jakarta sets IDR 250 million for a first acquisition and IDR 1 billion for inheritance between parents, children and spouses, under Perda DKI 1/2024, and gives no allowance on a second purchase (DDTC, 8 March 2024). For Badung, Gianyar, Denpasar and the Lombok regencies, use the figure in the current regional regulation.

Inheritance between close family is treated lightly: Denpasar charges 0% BPHTB on inheritance and bequests between direct relatives, including spouses (DDTC).

A leasehold is not a land right, so a lease does not trigger BPHTB. It is taxed through the landlord’s income tax instead (see below).

What does the seller pay, and is there a capital gains tax?

There is no separate capital gains tax on Indonesian property. The seller pays a final income tax on the gross transfer value under PP 34/2016:

  • 2.5% on most transfers of land and buildings, by individuals or companies, residents or non-residents.
  • 1% on simple houses and simple flats sold by a taxpayer whose main business is transferring land and buildings, in practice a developer of subsidised housing.
  • 0% on transfers to the government for public-interest projects.
  • Individuals with income below the non-taxable threshold who sell for less than IDR 60 million can be exempted, as can transfers by inheritance and certain gifts within the family, through an exemption certificate.

Because the tax is on gross value, you pay it even when you sell at a loss. The seller pays and validates it with the tax office before the PPAT signs, and the PPAT will not sign without proof. The base is the price actually received; between related parties, the tax office can apply a market value.

What can go wrong. The most common mistake in Bali and Lombok is a “side letter” that records a lower price on the deed to cut the 2.5% and the 5%. It exposes both parties to re-assessment and penalties, it leaves the buyer with a lower recorded cost when they sell, and in a dispute it puts the buyer’s real payment off the record.

How does VAT work on new property in 2026?

The 12% rate and the 11% effective rate

VAT applies when a VAT-registered business (PKP), usually a developer, sells or hands over a new building. A private individual selling a used villa does not charge VAT. Since 1 January 2025, the VAT rate is 12%, but PMK 131/2024 applies it to a tax base of 11/12 of the price for everything except luxury goods, so the effective rate on a normal new home is 11%. Residences that are subject to luxury goods tax (priced at IDR 30 billion or more) pay the full 12% (PwC).

The 2026 government-borne VAT (PPN DTP)

PMK 90/2025, in force since 1 January 2026, extends the property VAT relief for the whole of 2026 (Bisnis, 6 January 2026; Kontan):

Condition Rule under PMK 90/2025
Property New landed house or new strata apartment, handed over ready to occupy (no off-plan units)
Price cap Selling price up to IDR 5 billion
Relief 100% of VAT on the part of the price up to IDR 2 billion; VAT on the rest is paid normally
Handover window Handover (BAST) between 1 January and 31 December 2026
Buyer Individuals only, one unit per person; Indonesians with NIK or NPWP; foreigners with an NPWP who meet the foreign ownership rules
First sale First handover by the VAT-registered seller, never transferred before, with a house identity code from the housing ministry or Tapera
Holding period The unit cannot be resold or transferred for 1 year after handover

The Fiscal Policy Agency’s own example puts the saving at up to IDR 220 million, which is 11% of IDR 2 billion (DDTC).

The catch for foreigners. A foreign individual can only hold a house at or above the provincial minimum price set by the land ministry: IDR 5 billion for a landed house and IDR 2 billion for an apartment in Bali, IDR 3 billion for a landed house in West Nusa Tenggara (Lombok) (Hukumonline on Kepmen ATR/BPN 1241/2022). In Bali, that leaves a narrow window: a landed house at exactly IDR 5 billion, or an apartment between IDR 2 billion and IDR 5 billion. In Lombok the window is IDR 3 billion to IDR 5 billion. A PT PMA buying a villa does not qualify, because the relief is for individuals. And many Bali villas built by small developers have no house identity code, which rules them out.

Building your own villa: VAT on self-construction (KMS)

If you or your company build a villa of 200 m2 or more yourself, hiring workers and buying materials rather than paying a VAT-registered contractor, you owe VAT on “self-construction” (kegiatan membangun sendiri, KMS). The base is 20% of construction cost, excluding land, which at a 12% rate gives 2.4% of the cost, payable by the 15th of the following month (Pajakku on PMK 61/2022). On IDR 3 billion of construction, that is IDR 72 million (about USD 4,000). It is often forgotten and surfaces later when the tax office matches building permits with VAT payments.

When does luxury property tax apply?

Two luxury taxes apply to the top of the market, and only when buying from a company:

  • PPnBM at 20% on luxury houses, apartments, condominiums and town houses priced at IDR 30 billion or more, charged when the developer delivers the unit (Setkab on PMK 86/2019). It applies once, on the first delivery; a resale between individuals does not carry it.
  • PPh 22 at 1%, collected by the selling company from the buyer, on houses with land above IDR 30 billion or with more than 400 m2 of building, and on apartments above IDR 30 billion or more than 150 m2 (DDTC on PMK 92/2019). It is a prepayment that can be credited against the buyer’s income tax if they file in Indonesia.

A new IDR 32 billion villa bought from a developer outside a special economic zone would carry IDR 3.84 billion of VAT at the full 12%, IDR 6.4 billion of PPnBM and IDR 320 million of PPh 22, before BPHTB. Inside the Mandalika special economic zone in Lombok, ITDC, the zone operator, lists a PPnBM exemption for property among its incentives (Republika, 30 March 2026). See our Lombok property guide.

How is the annual land and building tax (PBB) calculated in 2026?

PBB-P2 (Pajak Bumi dan Bangunan Perdesaan dan Perkotaan) is billed every year by the regency or city through a tax notice called the SPPT. The taxpayer is whoever holds the right to the land, controls it or benefits from it, so a lessee can be billed if the owner does not pay.

The old formula is gone. Older guides, including ours, explained PBB as 0.5% of a taxable value (NJKP) equal to 20% or 40% of the NJOP. That was the formula of the old central PBB under Law 12/1985 as amended in 1994. When PBB on homes and land passed to the regions, the NJKP disappeared and the maximum rate became 0.3%. Since UU HKPD took effect on 5 January 2024 (DDTC):

  • the tax base is the NJOP minus a non-taxable allowance (NJOPTKP) of at least IDR 10 million per taxpayer, applied to one property per regency per year;
  • the region may apply its rate to between 20% and 100% of that amount (Art. 40(5));
  • the rate is capped at 0.5% (Art. 41), and land used for food production or livestock must have a lower rate;
  • NJOP is reviewed every three years, or every year in fast-changing areas.

Real rates are lower than 0.5%. Denpasar charges 0.1% where the NJOP is up to IDR 1 billion and 0.2% above it, with 0% for food and livestock land and low-income owners (DDTC on Perda Denpasar 5/2023). Badung grants official reductions of the PBB principal by regent’s regulation (Perbup Badung 28/2024).

PBB is low in cash terms, but unpaid PBB blocks a sale: the PPAT asks for the last receipts before signing. When you buy, ask for five years of SPPTs and receipts, and transfer the SPPT into your name (or your company’s) after the deed.

How is a leasehold taxed?

Most foreigners in Bali hold villas on a lease (hak sewa) of 20 to 30 years paid up front. The tax position is simple once you see that a lease is rent:

  • The landowner owes 10% final income tax on the full lease price, under PP 34/2017 (DDTC). If the tenant is a company (a PT PMA, for example), the company withholds the 10% and pays it to the state. If the tenant is an individual, the landowner pays it.
  • No BPHTB for the tenant, because no land right passes.
  • VAT applies if the landlord is VAT registered, such as a developer company leasing villas.
  • PBB stays with the landowner unless the contract shifts it. Write it into the lease.
  • Resale of a lease (assigning the remaining years to someone else) is also taxed as rent in practice: the 10% is due on the price of the assignment.

What can go wrong. Some developers ask leasehold buyers to “contribute” to the landowner’s 10% or quote prices “net of tax”. Agree in writing who pays and ask for the payment slip. If the landowner never paid, the tax office can come back to the transaction later.

How is rental income from property taxed?

It depends on what you are really doing.

Long-term rent (a lease or a monthly or yearly tenancy). The landlord pays a final 10% on gross rent under PP 34/2017, and the rent is not added again to taxable income. A PT PMA that leases a building to another company also pays 10% final on that rent, not 22% corporate tax.

Short stays (Airbnb, Booking.com, villa management). This is an accommodation business, not a lease. Guests pay the regional hotel tax (PBJT, up to 10% under UU HKPD), which the operator collects for the regency. The operator’s profit is taxed as ordinary business income: 22% corporate tax for a PT PMA (with reductions for smaller companies), or progressive rates for an individual. You also need the right business licence; in Bali, new PT PMAs can no longer take the villa and small hotel business codes since May 2026. Our guide to renting out a villa in Bali covers licensing, and our corporate tax guide covers the company side.

Do non-residents pay more?

On purchases and sales, no. BPHTB, the 2.5% seller tax, VAT and PBB apply in the same way to Indonesians and foreigners, residents and non-residents.

On rent, the answer is contested in October 2026. Article 26 of the Income Tax Law imposes 20% withholding on rent paid to a non-resident without a permanent establishment and carves out only property transfers, not rent. PP 34/2017 sets 10% final on rent without saying whether it covers non-residents. Dr. Ruston Tambunan, President of the Asia-Oceania Tax Consultants’ Association, concluded in June 2026 that the 20% applies, and noted that practice still varies (Ortax, 19 June 2026; IKPI, 24 July 2026). Tax treaties leave income from Indonesian property taxable in Indonesia.

If you live abroad and an Indonesian company pays you rent, expect 20% withholding unless the tenant has a clear basis for 10%, and agree the rate in writing. Dividends, interest and fees paid by a PT PMA to foreign shareholders are a separate matter: 20% withholding, reduced by treaty where one applies (PwC).

Worked examples: what does a real transaction cost?

These examples use the national NPOPTKP floor of IDR 80 million and round figures. They exclude notary and PPAT fees, due diligence and agent commission.

Example 1: resale villa in Badung, bought on Hak Pakai by a KITAS holder. Price IDR 6 billion (about USD 335,000), NJOP IDR 4.5 billion. The seller is a private individual, so there is no VAT.

Item Calculation Amount
Buyer’s BPHTB 5% × (6,000,000,000 minus 80,000,000) IDR 296,000,000 (about USD 16,500)
Seller’s final PPh 2.5% × 6,000,000,000 IDR 150,000,000 (about USD 8,400)
Stamp duty IDR 10,000 per signed document Nominal

Example 2: new villa in Lombok from a developer, ready in November 2026, bought on Hak Pakai by a foreigner with an NPWP. Price IDR 4 billion (about USD 223,000), above the NTB minimum of IDR 3 billion.

Item Without PPN DTP With PPN DTP (PMK 90/2025)
VAT at 11% effective IDR 440,000,000 IDR 220,000,000 (VAT on the first IDR 2 billion paid by the government)
Buyer’s BPHTB 5% × (4,000,000,000 minus 80,000,000) = IDR 196,000,000 Same
Developer’s final PPh 2.5% × 4,000,000,000 = IDR 100,000,000 Same

The relief saves about USD 12,300, but the villa must be handed over by 31 December 2026 and cannot be resold for a year.

Example 3: annual PBB on a villa in Denpasar. NJOP of land IDR 3 billion plus building IDR 1.2 billion = IDR 4.2 billion. Rate 0.2% because NJOP is above IDR 1 billion.

  • If Denpasar applies its rate to 100% of NJOP: 0.2% × (4,200,000,000 minus 10,000,000) = IDR 8,380,000 a year (about USD 470).
  • If it applies it to 50%: IDR 4,190,000 a year.

Example 4: leasehold and rent. A landowner leases land to a foreign individual for 25 years at IDR 2.5 billion paid up front. The landowner owes 10% final, IDR 250 million (about USD 14,000). The foreigner later lets the villa on a yearly lease to a PT operator for IDR 400 million. If the foreigner is a resident, the operator withholds 10%, IDR 40 million. If the foreigner lives abroad, the operator may withhold 20%, IDR 80 million, under the Article 26 reading above.

What can go wrong with property tax in Indonesia?

  1. Under-declared prices. NJOP sets a floor, the regional office can re-assess, and you inherit a low cost base.
  2. Seller’s PBB arrears. Ask for five years of receipts; arrears follow the property.
  3. Assuming the VAT relief applies. Have the developer confirm eligibility in the purchase agreement and agree who pays if it is refused.
  4. Missing the self-build VAT of 2.4% when you build with your own team.
  5. Treating a holiday rental as a “lease”. Short stays are an accommodation business; 10% rent tax does not survive an audit.
  6. Nominees. They are void under Article 33 of Law 25/2007 and leave you with no title to defend. Our Bali buying guide explains the legal routes.

Get your property tax budget checked before you sign

Taxes are cheap to plan and expensive to fix. ILA calculates BPHTB, PPh and VAT on your deal, checks the seller’s PBB history, works with the notary on validation and sets up filings for your rental income. Contact our team or see our tax declaration service.

Want this guide offline? Get the free PDF version, or browse all 27 free ILA guides.

Frequently asked questions

Is there a capital gains tax on property in Indonesia?

No separate one. The seller pays a final 2.5% income tax on the gross sale price (1% for simple houses sold by developers), whether they made a gain or a loss.

How much is BPHTB in Bali?

5% of the price, or the NJOP if higher, minus the regency’s non-taxable allowance. UU HKPD sets that allowance at a minimum of IDR 80 million for a first acquisition; check the current Badung, Denpasar or Gianyar figure.

What is the PBB rate in Indonesia in 2026?

A maximum of 0.5%, set by each regency. Denpasar charges 0.1% up to IDR 1 billion of NJOP and 0.2% above. The old 20% or 40% “NJKP” formula no longer applies.

Can foreigners use the 2026 VAT relief on new houses?

Yes, if they have an NPWP, buy as individuals, and the home meets the foreign ownership rules, including the provincial minimum price. In Bali that limits it to a landed house at IDR 5 billion or an apartment between IDR 2 billion and IDR 5 billion, handed over in 2026.

Who pays the 10% tax on a Bali leasehold?

The landowner. If the tenant is a company, it must withhold and pay the 10%. Check the contract and ask for the payment proof.

Do non-residents pay 20% tax on rental income?

Possibly. The 10% final rate is standard, but leading practitioners argue that rent paid to non-residents falls under the 20% Article 26 withholding, and practice varies. Agree the rate with the tenant and get advice.

Is there luxury tax on villas?

Only on new residences of IDR 30 billion or more bought from a developer (20% PPnBM plus full 12% VAT), and a 1% PPh 22 on very luxury homes bought from a company. A resale between individuals carries neither.

Sources

  1. JDIH BPK: Law 1/2022 on Financial Relations between the Central and Regional Governments (UU HKPD)
  2. DDTC News: PBB-P2 rules under UU HKPD (31 January 2024)
  3. DDTC News: NPOPTKP under UU HKPD (24 December 2021)
  4. DDTC News: Denpasar regional tax rates, Perda 5/2023 (3 February 2024)
  5. DDTC News: Jakarta NPOPTKP IDR 250 million (8 March 2024)
  6. JDIH BPK: Perbup Badung 28/2024 on PBB-P2 reductions
  7. Setkab: PP 34/2016 on income tax on transfers of land and buildings
  8. Kontan: PMK 131/2024, 12% VAT only for luxury goods
  9. Bisnis: PPN DTP scheme and conditions for 2026 (6 January 2026)
  10. DDTC News: PMK 90/2025, government-borne VAT on homes in 2026
  11. Kontan: 100% property VAT relief continues in 2026
  12. DDTC News: BKF says buyers can save IDR 220 million
  13. Hukumonline: minimum house prices for foreigners, Kepmen ATR/BPN 1241/2022 (14 February 2023)
  14. Pajakku: VAT on self-construction (KMS) at 2.4%
  15. Setkab: PMK 86/2019, PPnBM threshold for luxury residences raised to IDR 30 billion
  16. DDTC News: PMK 92/2019, PPh 22 on very luxury residences cut to 1%
  17. Republika: ITDC fiscal incentives in the Mandalika SEZ (30 March 2026)
  18. DDTC News: Tax on leasing land and buildings (PP 34/2017)
  19. Ortax: Villa rent received by non-residents, PPh 4(2) or PPh 26 (19 June 2026)
  20. IKPI: AOTCA President on non-resident property rent (24 July 2026)
  21. PwC Worldwide Tax Summaries: Indonesia, other taxes (last reviewed 11 June 2026)
  22. PwC Worldwide Tax Summaries: Indonesia, withholding taxes
  23. JDIH BPK: Law 25/2007 on Investment
  24. Databoks Katadata: Rupiah at IDR 17,916 per USD (5 October 2026)