Taxes and Costs of Buying Property in Bali

BPHTB — land and building acquisition duty

BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan) is a regional tax charged on the acquisition of rights to land and buildings, customarily borne by the buyer in a freehold or HGB transfer. It is calculated on the transaction value or the local government's assessed value (NJOP), whichever is higher, above a regency-set non-taxable threshold.

BPHTB does not typically apply to a Hak Sewa (leasehold) agreement, since a lease does not transfer land rights — but always verify how your specific structure is treated with your notary.

PPh Final — seller's income tax on the sale

PPh Final (Pajak Penghasilan) on the transfer of land and building rights is withheld from the seller's side and is customarily the seller's responsibility, though this is a matter of contract, not law. It is administered by the Direktorat Jenderal Pajak (DJP) and must be settled before the deed of sale (Akta Jual Beli) can be signed before the PPAT.

PBB — annual land and building tax

Pajak Bumi dan Bangunan (PBB) is an annual tax on land and buildings, payable by whoever holds the right to the property (owner, or in practice often passed through to a long-term tenant under a lease agreement). It is assessed by the local tax office based on NJOP and is generally a modest recurring cost, but must be kept current — unpaid PBB can complicate any future sale or renewal of certificates.

Notary/PPAT and due diligence fees

A PPAT fee is charged for drafting and registering the deed of sale, lease agreement, or PT PMA-related deeds, and is separate from BPHTB/PPh. Buyers should also budget for independent due diligence: certificate checks at the Kantor Pertanahan (BPN land office), zoning verification, and a lawyer's review of the draft agreement. These fees vary by notary and by the complexity of the file and should be quoted in writing before engagement.

PT PMA setup and ongoing compliance costs

A foreign-owned PT PMA (foreign investment limited liability company) is the standard legal route for a foreigner to control land-based rights such as HGB or Hak Pakai in Indonesia in a compliant manner. Setting one up involves registration through the OSS (Online Single Submission) system administered under BKPM, notarial deeds of establishment, tax registration (NPWP), and — depending on activity — sector licensing.

Ongoing compliance includes annual financial reporting (LKPM), corporate tax filings, and maintaining a registered business address and, in many cases, a company secretary or local accountant. These are recurring annual costs that should be factored into any PT PMA ownership plan, not one-off setup costs.

Lease (Hak Sewa) agreement costs

A leasehold arrangement between a foreigner and an Indonesian landowner is documented as a private lease agreement, ideally notarised and, for terms that justify it, registered. Costs here are mainly notarial/legal drafting fees and, in some structures, a translation and stamp duty (materai) cost. There is no BPHTB or PPh-transfer style tax on the lease itself, but rental income received by the landlord is taxable to them, and Indonesian withholding rules can apply if the arrangement involves a registered business.

Taxation of rental income

If you sub-lease or operate a villa as a short-term rental business through a PT PMA, the company's rental/hospitality income is subject to corporate income tax and, where applicable, VAT (PPN) registration thresholds. An individual landowner renting out property directly is also subject to income tax on that rental income under Indonesian rules. This area has real complexity and changes with regulation — engage a registered Indonesian tax consultant (konsultan pajak) before you start renting.

Who customarily pays what

Indonesian market custom generally allocates BPHTB to the buyer and PPh Final to the seller, and PPAT fees are often split or negotiated between the parties. None of this is fixed by law for private negotiation — the allocation of costs should always be written explicitly into the sale and purchase agreement or lease before signing, rather than assumed from custom.