Property tax in Indonesia in 2025
One of the most crucial aspects to consider when selecting a foreign real estate investment destination is a tax system that is transparent, comprehensible, and aligned with the investor’s interests.
Following the implementation of Indonesia’s land law reforms in 2015, which permitted foreign investment in real estate, the region began to attract attention from those seeking to explore the rental business and, by extension, taxation in Indonesia.
In response to this growing interest and influx of expatriates, tax laws have been adapted to provide greater clarity and precision.
Taxes in Indonesia
In accordance with the current Indonesian tax code, an individual is considered a tax resident if they have been in the country for a minimum of 183 days within a 12-month period or if they have the intention to remain in Indonesia.
The intention to remain in Indonesia is considered to be:
- a work visa and work permit;
- an employment contract with a validity period exceeding 183 days.
The income of foreign individuals who become tax residents is subject to income tax, with profits from activities in Indonesia being the only source of income taken into account.
Indonesia has a double tax treaty with many countries. Income from immovable property in Indonesia is taxable only in Indonesia.
Bali Property Tax for Foreigners
Those who purchase and subsequently own real estate in Bali are subject to a number of tax levies.
Tax on buying real estate in Indonesia (BPHTB)
Regarding the formalization of ownership or rights of use of structures (purchase and sale), the applicable taxes are as follows:
- the seller is liable for a payment equivalent to 2.5% of the value;
- the buyer is liable for a payment equivalent to 5% of the tax value of the object.
From $115,000
Yield 10.0% Completion in: 2027.II
From $125,000
Completion in: 2027.I 123 units in total
From $147,000
Completion in: 2027.I 66 units in total
From $179,000
Yield 12.8% Completion in: 2025.I
From $170,000
Completion in: 2025.IV Total of 103 apartments
From $210,000
Completion in: 2027.IV 315 units in total
From $110,000
Completion in: 2027.I Total of 58 apartments
Forms of real estate ownership in Bali to which transfer tax applies:
- Hak Milik (ownership);
- Hak Guna Usaha (commercial use right);
- Hak Guna Bangunan (right to build);
- Hak Pakai (right to use);
- Hak Milik atas Satuan Rumah Susun (ownership of condominium units);
- Hak Pengelolaan (management right).
Hak Sewa (standard leasehold) is not subject to tax on the purchase of real estate.
VAT
It is standard practice for the seller to be held responsible for Value Added Tax (VAT), which is then passed on to the buyer as part of the transaction value. It should be noted that the amount of VAT is already included in the price of the property.
In 2024, the value-added tax (VAT) rate is 11%. However, the Indonesian government has announced plans to increase this to 12% next year.
Yearly Property Tax in Bali (PBB)
Property tax in Indonesia is calculated based on the assessed value of the land and any improvements or structures located thereon. The current tax rate is 0.5%, and the tax is levied annually.
From $125,000
Completion in: 2027.I 123 units in total
From $147,000
Completion in: 2027.I 66 units in total
From $179,000
Yield 12.8% Completion in: 2025.I
From $210,000
Completion in: 2027.IV 315 units in total
From $156,000
Completion in: 2026.III 42 units in total
From $185,000
Completion in: 2026.II 49 units in total
From $349,000
Yield 16.0% 51 units in total
Calculation formula for land and property tax in Indonesia
PBB = 0.5% x taxable value of the property
Taxable value of the property = 0.4 or 0.2 x (house value + land value).
The coefficient of 0.4 applies to properties worth more than Rp 1 billion ($63,000), for properties worth less than Rp 1 billion, the coefficient is 0.2.
Example:
The cost of real estate in Bali is 100 thousand dollars. A land plot is valued at another 150 thousand dollars. The taxable value of the property will be $100,000 ($250,000×0.4) and the annual land tax will be $500.
Property owners must pay land and property tax (PBB) under Hak Pakai. Hak Sewa is not subject to PBB as it does not give ownership or use of land.
Tax on Rental Income
Income Tax
If an investor rents out a property in Indonesia, the landlord or property manager withholds 10% of the yearly property income tax.
Progressive income tax does not apply to rental income earned by individuals and legal entities from the rental of land and/or premises.
VAT
VAT is only levied on the rental of commercial real estate. Residential property is not subject to VAT. The VAT rate in this case is 11%.
Stamp duty
Stamp duty is required to certify leases. The fee is 10,000 rupees, or $0.63, per document.
Other Taxes in Bali
Income Tax in Indonesia (PPH)
Indonesia has a progressive taxation scale: as the amount of income increases, the tax rate increases from 5% up to 35%.
Progressive income tax scale in Indonesia
Annual income, US dollars | Tax rate |
up to 3,761 | 5% |
from 3,761 to 15,672 | 15% |
from 15,672 to 31,344 | 25% |
from 31,344 to 313,440 | 30% |
from 313,440 | 35% |
Rental income from rental properties in Bali is subject to a flat tax of 10%. A progressive scale applies to dividends, interest, and royalties.
Non-residents cannot use the progressive tax rate in Indonesia — they are subject to a flat tax rate of 20%.
Luxury Tax (PPnBM)
PPnBM — tax imposed on goods considered to be luxury.
Categories of goods subject to PPnBM:
- motor vehicles: luxury cars, motorcycles, yachts, and airplanes;
- real estate: luxury houses, villas, and apartments;
- jewellery: gold, diamonds, and other precious stones;
- expensive electronics;
- luxury clothing;
- household items: expensive furniture and household appliances.
Properties valued at $1,883,238 (Rp 30 billion) or more are considered luxury goods and are subject to PPnBM. The tax rate will be 20% of the declared value.
We will send you a content digest not more than once a week
Property for sale Canggu, Bali
Property for sale in North Kuta, Bali