Bali Land Taxes: Who Pays What, and Under Which Article

Two plots in our own catalogue. A hundred are of freehold in Nusa Dua at Rp 26,000,000,000. Seven are of leasehold in Kutuh at Rp 2,275,000,000 for twenty-five years. The freehold is eleven times the money — and it carries the lighter tax burden, measured against what is paid.

That is not how the market describes it. “Land tax” in Indonesia is four taxes under three instruments, each naming a different taxpayer, and a lease falls into a different one from a purchase. Each of them below by article number, then the arithmetic on those two plots.

Four taxes, four different taxpayers

What a buyer should know first is not the rate but which of the four he is the taxpayer for: that is fixed by statute, and the rest is contract.

Law 1/2022 on Financial Relations between the Central Government and Regional Governments replaced the old regional tax law and governs the acquisition duty and the holding tax, both regency taxes. The two income taxes are central. Nothing in the price on a listing card includes any of them.

The seller’s 2.5%, and the deadline that blocks the deed

Government Regulation 34/2016 on Income Tax from the Transfer of Rights to Land and/or Buildings (promulgated 8 August 2016, State Gazette 168/2016) sets the rate in Article 2(1): 2.5% of the gross value of the transfer for an ordinary sale, 1% where the seller’s principal business is simple housing, 0% to the government. It is final — not a prepayment, not creditable, not reduced by costs.

Two features matter more than the rate. Article 3(1) requires the seller to remit the tax himself before the deed, decision, agreement or auction minutes are signed by the competent official: the tax does not settle the transaction, it gates it. And Article 8(1) puts the official who signs without that compliance under sanction — so the notary will not sign while the seller’s receipt is missing. That is the buyer’s problem too: the money can be ready and the deed still not exist.

Note who the statute names. The seller remits the 2.5%; the buyer is the acquisition-duty taxpayer. Who bears each is a term of the sale, negotiated like the price. “The customary Bali split” is a claim about a market, not about the law.

The buyer’s BPHTB: a ceiling, a floor and a deduction

Law 1/2022 makes the acquirer the taxpayer in Article 45, and Article 47(1) caps the rate: “Tarif BPHTB ditetapkan paling tinggi sebesar 5%” — at most five per cent, with ayat (2) leaving the figure to the regency’s by-law. Article 48(2) collects it where the land is, so a Badung plot is a Badung tax and a Gianyar plot a Gianyar one.

The base is where buyers are caught. Article 46(2)(a) uses the transaction price for a sale — but Article 46(3) provides that where the acquisition value is unknown or lower than the NJOP, the assessed value used for the holding tax that year, the NJOP becomes the base instead. A price written down on paper does not shrink the duty below the assessment. Article 46(5) then deducts at least Rp 80,000,000 on a taxpayer’s first acquisition in that regency, and Article 46(6) raises that floor to at least Rp 300,000,000 for inheritance or a gift between close relatives in the direct line. Article 46(8) leaves both to the by-law: higher locally is possible, lower is not.

One point the lease-versus-buy conversation misses: Article 44(2) makes the duty payable not only on transfers but on the grant of a new right, over the rights Article 44(3) lists — hak milik, hak guna usaha, hak guna bangunan, hak pakai, strata title and hak pengelolaan. A foreigner taking a fresh Hak Pakai is acquiring within Article 44(2) even though nobody sold him anything. A pure conversion with no change of name sits in the exclusion list; one that changes who holds it does not. Which right is on offer is the subject of the Bali land certificate check.

A lease is not a transfer, so it is taxed at 10%

Here the tenures part. Read the Article 44(3) list again: hak sewa, the right of lease, is not on it. A lease acquires no enumerated right, so the duty has nothing to attach to. Nor is it a pengalihan hak, a transfer, so the seller’s 2.5% does not arise. And with no registered right changing hands there is no transfer registration and no 1‰ fee.

What applies instead is Government Regulation 34/2017 on Income Tax from the Leasing of Land and/or Buildings (promulgated 11 September 2017, State Gazette 200/2017, Supplement 6116). Article 4(1) sets the rate at 10% of the gross rental value, final. Article 3 decides the mechanics: where the tenant is a withholding agent the tenant withholds it, otherwise the recipient of the rent pays it himself.

Three consequences, all counterintuitive. The rate is four times the seller’s rate on a sale. It falls on the whole rent, and on a Bali lease the whole rent is normally paid up front, which is why a twenty-five-year term arrives as a single price. And it is the lessor’s tax, so a tenant who is not a withholding agent owes nothing but has every reason to know whether the landowner has remitted. What the term itself is worth is covered in what a Bali lease extension actually promises.

What this costs on two of our own plots

Converted at the Bank Indonesia JISDOR reference rate of Rp 18,047 per US dollar for 22 October 2026, the latest published as this is written. The duty is shown at the 5% statutory ceiling, not at a Badung rate — the last section says why.

Read the last two rows together. The 100-are freehold plot in Nusa Dua attracts 7.58% of its price with the duty at its legal maximum; the 7-are lease in Kutuh attracts 10.00%, and per are the gap is wider again because Bukit land is dearer. The cheaper-looking tenure is the more heavily taxed one.

Two qualifications keep that honest. The lease figure is legally the lessor’s, and whether it is priced into the rent is invisible from outside. And the freehold buys a permanent right where the lease buys twenty-five years, so this compares the tax on each deal, not what each delivers. What it settles is that “leasehold is the cheap way in” is not a statement about tax.

The holding tax then runs for as long as the land is held. Article 40(1) makes the base the NJOP, Article 40(3) requires an allowance of at least Rp 10,000,000, Article 40(5) allows the taxable portion to reach 100% of the NJOP after it, and Article 41(1) caps the rate at 0.5%. Those limits bound the bill without predicting it, because the NJOP is set by the regency and is not the asking price. The line items that are fees rather than taxes are in the full per-are cost of a plot.

The numbers we don’t quote

• Badung’s and Gianyar’s own rates. Articles 46(8) and 47(2) leave the duty’s rate and both thresholds to each regency’s by-law — for our Bukit plots, Perda Kabupaten Badung 7/2023 on Regional Taxes and Levies. On the day of writing the national legal database was in scheduled maintenance and the Badung revenue office server refused the connection, so every figure above is a ceiling or floor from Law 1/2022, not a Badung rate. The local figures go up when we have read them in an official text.
• What we do know about that by-law is that Perda Kabupaten Badung 8/2025 (promulgated 22 December 2025, Regional Gazette 8/2025, in force 1 January 2026) amends it and leaves both tax rates alone, rewriting the holding-tax exemption in Article 5(3)(b) — whose list exempts other residential land below an assessed-value threshold fixed by the Regent, a threshold the by-law does not state.
• The NJOP of any plot we list. The holding tax is charged on the assessment, not on our asking price, and we have not read a Badung assessment schedule.
• Notary and PPAT fees. The honorarium is capped by statute in bands by transaction value, but we could not read the governing article in an official text today, so no percentage appears.
• Value added tax. Whether it applies turns on the seller’s status rather than on the land, and we have no official text for the current rate in hand.
• Who ends up paying. Not a number, but the commonest error. The statute names the seller for the 2.5%, the buyer for the duty, the lessor for the 10%. Every other allocation is a clause.

The sequence that follows is short. Establish which of the four you are the taxpayer for, which turns only on whether you are buying a right in Article 44(3) or renting one. Get the assessed value before agreeing the price, because Article 46(3) makes it the floor of the duty whatever the contract says. Make the seller’s remittance a condition of signing, not a formality after it. Every freehold plot in our for-sale listings states its price and its district, which is what both sums are built from, and the per-are spread across land on the Bukit peninsula is why the arithmetic is worth doing plot by plot rather than once for the whole catalogue. This is the statutory position with the articles cited, not advice on a particular deal.

Read next

• Bali land price per are: the full cost — every line item on top of the asking price.
• The Bali land certificate check — which right is being sold, which decides which taxes you meet.