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In this article, we will help you to Understand Bali Real Estate taxation before buying villa in Bali.
Tax is a mandatory contribution of every citizen to the country. Either individually or as a coercive entity based on the law. Tax payments do not receive direct compensation and are used for the purposes of the state in the welfare of its people.
Now, when making a sale and purchase transaction for a villa, you do not only pay or receive the agreed villa price. There are several other components or villa sales taxes that need to be paid.
In the process of buying and selling villa in Bali, there are several taxes that you need to know and must pay. What are the components of the cost of buying and selling villa taxes that need to be paid in the transaction?
This fee is imposed by the government on the acquisition of land and/or building rights. It is typically paid by the purchaser at the time of purchase. The fee varies depending on the Province, City or District and the type of property purchased.
Generally, the fee is calculated based on the value of the property rights being acquired.
The amount of the villa sale and purchase tax rate (duty) is set at 5% which is imposed on the owner or buyer of the villa.
The amount required to pay taxes is limited to above IDR 30 Million. This type of tax is regulated by Law no. 21 of 1997 and effective as of January 1, 1998.
You can check the authenticity of the land certificate by going directly to the land office located in each district/city. In most cases, the notary will take care of it.
The certificate check fee component is not too large.
PS. By taking care of and paying the fee for the certificate check. It will provide the legality of the certificate of the villa to be purchased.
Transfer of title certificate generally ranges from 2% of the transaction value or in accordance with applicable regional regulations.
The buyer is usually obliged to carry out the transfer process independently. Unless the house is purchased directly from the developer.
AJB fee (Deed of sale and purchase) of 1% of the value of the villa sale and purchased transaction.
Generally, the cost of making this AJB will be borne by the buyer. Unless there is another agreement with the seller.
VAT is payable at the time of down payment and at the time purchase. The payment and at the time of purchase. The calculation of VAT will be imposed on the buyer. Collected the seller provided that the seller is a Taxable Entrepreneur.
The villa sale and purchases tax which is the basis for the imposition in VAT is the actual transaction value. But if the transaction value is bellow the Tax Object Selling Value (NJOP), the NJOP is the basis for imposition.
The basic tax obligation is Income Tax (Pajak Penghasilan or PPh) which is progressive and applied to both individual(s) and enterprises. The amount of PPH is 5% (five percent) of the gross amount of income on land and build rights.
The owners of land & buildings have to pay tax annually on land, buildings and permanent structures. The basis for calculating PBB is the Taxable Selling Value or NJKP. Which is a certain percentage of the actual selling value. NJKP is set as low as 20% and as high as 100%.
In general, notary services or PPAT already have a standard fee that has been set by the local government.
You can negotiate and share the responsibility with the buyer if are willing. That way, the cost of buying and selling home taxes that you need to spend can be lighter.
In conclusion, you always need to prepare extra cost when it comes to buying Bali villa.
If you still want to know more about Bali Villa Investment type, learn more about “Bali ownership: Freehold vs Leasehold”
If you need more information, reach out to us for any free consultation! We will be great hands for your Bali Villa Investment.
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Type of property ownership dedicated for local investors or foreigners under legal cooperation in Indonesia. The freeholder of a property owns it outright, including the land it is built on. If you buy freehold, you’re responsible for maintaining your property and land, so you’ll need to budget for these costs and taxes.
Surat Hak Milik (SHM) / Surat Hak Guna Bangunan (SHGB)
Lifetime, or until it’s sold to a new owner
Indonesian individual only or foreigner who has a company in Indonesia (PMA) to buy the property under that company’s name
Type of property ownership for foreign investors who are willing to purchase the property as an individual. With leasehold, you own the property (subject to the terms of the leasehold) for the length of your lease agreement with the freeholder. When the lease ends, ownership returns to the freeholder, unless the contract states guaranteed lease extension at future market price.
Akta Sewa / Right to use – Right to rent
Average 20-30 years, with possible extension. Maximum 99 years
All people including Indonesian and foreigner with KITAS-Visa status
