Transaction costs Indonesia buying guide
A land purchase carries taxes on both sides of the deal. Here is how BPHTB, the seller's final income tax, PPAT fees and the annual PBB bill are worked out.
The agreed price is only part of what changes hands when land is sold in Indonesia. The buyer pays a regional acquisition duty, the seller pays a final income tax, both sides use a land deed official, and whoever ends up holding the land receives a property tax bill every year. This guide explains each item with the national rules behind it and a worked example.
One caution before the numbers. Several of these charges are set by the regency or city through its own regional regulation (perda), within limits written in national law. Central Lombok, West Lombok, West Sumbawa and the Sumba regencies can therefore apply different figures. Use the national limits below to plan, then confirm the local figure with the deed official or the regional revenue office (Bapenda) before you sign.
Which right are you acquiring?
The taxes in this guide apply when a land right is transferred, for example a freehold title (Hak Milik) moving from one Indonesian citizen to another, or a building right (Hak Guna Bangunan) moving to a company. Foreign buyers cannot hold Hak Milik and normally work through a lease, a right of use (Hak Pakai) or a foreign-owned company. A lease does not transfer the land right itself, so it has its own tax treatment: rent for land or buildings is generally taxed on the landlord's side as a final income tax. Our guide to leasehold, Hak Pakai and company structures covers those routes. Ask your adviser which taxes apply to the structure you choose before you compare prices.
BPHTB: the buyer's acquisition duty
BPHTB (Bea Perolehan Hak atas Tanah dan Bangunan) is a regional tax on acquiring land or building rights. Under Law No. 1 of 2022 on central and regional financial relations (the HKPD Law), the rate can be no higher than 5%. Each regency or city sets its actual rate by regional regulation.
The tax base is the acquisition value (NPOP), which in a sale is normally the transaction price. If the price is unknown or lower than the official assessed value (NJOP) shown on the land's annual tax notice, the assessed value is used instead. From that base the region deducts a tax-free amount (NPOPTKP). The HKPD Law sets this at a minimum of Rp80 million, and it applies to a taxpayer's first acquisition in that region.
Example: a plot is sold for Rp1.5 billion in a regency with a 5% rate and an NPOPTKP of Rp80 million. BPHTB is (Rp1,500,000,000 minus Rp80,000,000) × 5% = Rp71,000,000.
The deed official will expect proof that BPHTB has been paid and validated before the sale deed is signed, so build the payment into your timeline.
PPh: the seller's final income tax
The seller pays a final income tax on the transfer. Government Regulation No. 34 of 2016 sets the general rate at 2.5% of the gross transfer value. Lower rates apply in narrow cases: 1% for simple houses and simple apartments sold by property businesses, and 0% for land handed to the government for public-interest projects. Some transfers are exempt, including inheritance, certain grants between close family members, and individuals below the tax-free income threshold who transfer property worth less than Rp60 million.
Example: on the same Rp1.5 billion sale, the seller's tax is Rp1,500,000,000 × 2.5% = Rp37,500,000.
Under the same regulation, the land office will not register the change of rights without proof that this tax has been paid. Some sellers quote a "net" price and expect the buyer to cover their tax. That is a commercial point, so write down who pays which tax in the binding agreement rather than leaving it to the signing day.
PPAT and notary fees
A sale of land is recorded in a sale deed (Akta Jual Beli) made by a land deed official (PPAT). Many PPATs are also notaries. Regulation of the Minister of Agrarian Affairs and Spatial Planning No. 33 of 2021 caps the PPAT fee by transaction value:
| Transaction value | Maximum PPAT fee |
|---|---|
| Up to Rp500 million | 1% |
| Over Rp500 million to Rp1 billion | 0.75% |
| Over Rp1 billion to Rp2.5 billion | 0.5% |
| Over Rp2.5 billion | 0.25% |
These are ceilings. Fees are negotiable below them, and the regulation states that the fee may not exceed 1% of the price in the deed. Notarial deeds that often come before or alongside the sale deed, such as a conditional sale agreement (PPJB), a lease deed or company documents, fall under the Notary Law, which uses a sliding scale based on the value involved. Ask for one written quote that lists every deed, search and registration step the office will handle.
Other transaction costs
- Certificate checks at the land office (BPN) before signing, and registration fees after it.
- Measurement and subdivision fees if you are buying part of a larger certificate.
- Stamp duty on signed documents.
- Independent legal review, translation and, for foreign buyers, company or permit work.
- Travel for site visits and signing, plus bank transfer costs.
None of these is large on its own, but together they can add a noticeable amount to a small purchase. List them in your budget next to the taxes.
PBB: the yearly land and building tax
Once the land is registered, the holder pays the annual land and building tax for rural and urban areas (PBB-P2). The HKPD Law caps the rate at 0.5%, with lower rates required for land used for food production and livestock. The base is the assessed value (NJOP) minus a tax-free amount of at least Rp10 million per taxpayer, and the region can apply between 20% and 100% of the assessed value.
Example: with an assessed value of Rp600 million, the minimum Rp10 million deduction, a 100% basis and an illustrative 0.2% rate, the bill is Rp590,000,000 × 0.2% = Rp1,180,000 a year. The real figure depends on your regency's rate and basis.
Before buying, ask the seller for recent tax notices (SPPT) and payment receipts. Unpaid PBB has to be settled before transfer, and gaps in the payment record can point to wider problems with the file. Our guide to land title and boundary checks lists the other documents to request.
A typical order of payments
- Complete due diligence on the certificate, boundaries, zoning and tax history.
- Agree the price, the payment schedule and who bears each tax and fee.
- The seller pays the final income tax, and the payment is validated.
- The buyer pays BPHTB, and the regional revenue office validates it.
- Both parties sign the sale deed before the PPAT.
- The PPAT submits the deed to the land office, which records the new holder.
Local practice can change the order slightly, so ask the PPAT to set out the steps for your transaction in writing.
Buyer note: Rates, tax-free amounts and the assessed values used by each region change through regional regulation. Treat the examples in this guide as a method, not a quote, and confirm the current figures for the specific parcel.
Sources
- DDTC News: NPOPTKP and BPHTB under the HKPD Law (UU 1/2022)
- Cabinet Secretariat: Government Regulation 34/2016 on income tax from land and building transfers
- Directorate General of Taxes: text of PP 34/2016
- Permen ATR/BPN No. 33 of 2021 on PPAT fees
- DDTC News: PBB-P2 rules under the HKPD Law
- Cermati: notary and PPAT fee scales (secondary summary)
Property examples to compare
To see how these costs scale with price and size, compare 3.28 Ha Beachfront Land in Kuta Mandalika, Lombok, 1.04 Ha Land in Moro Bay, Kertasari, West Sumbawa and Lenang Beachfront Land, 4,194 m², Sumba. Ask our team which right each certificate carries before you estimate taxes.
Estimating costs for a specific plot?
Send us the listing you are considering. We can share the certificate type and assessed value so your PPAT and tax adviser can prepare an accurate quote.
Editorial note: This guide is general education, not legal or tax advice. Regional rates and national rules change. Confirm current figures with a licensed PPAT and the local revenue office before signing.
