Understanding Bali Property Taxes for Foreign Buyers

Investing in your dream villa in Bali might be something you’ve been thinking about for a long time. Finding the perfect property is exciting, but once you do, the paperwork begins.

As a foreign investor, there are several important things to consider, especially when it comes to taxes.

In this article, we’ll guide you through everything you need to know about property taxes in Bali so you can plan confidently and avoid surprises along the way.

Key Takeaways

Tax Type	Description	When It Applies	Typical Rate	Who Pays
Property Acquisition Tax (BPHTB)	One-time tax when property ownership changes hands	Before the notary signs the property transfer deed	5% of property value (sale price or government-assessed value, whichever is higher)	Buyer
Annual Property Tax (PBB)	Recurring land and building tax based on assessed property value	Once a year within six months after SPPT is issued	0.1%–0.5% of assessed value	Property owner
Property Transfer Tax (PPh)	Income tax on property sale	At the time of sale, before notary finalizes transaction	Freehold: 2.5%, Leasehold with NPWP: 10%, Foreign without NPWP: 20%	Seller
Income Tax on Rental Income	Tax on rental earnings	Annually, based on residency	Residents: 5%–35% progressive, Non-residents: 20% flat	Property owner (or lessor)
Value Added Tax (PPN)	Tax on new or off-plan properties from developers	When buying/leasing from developer	11% of selling price	Buyer
Construction Tax	Tax on new building construction based on project cost	Upon building completion	1.75%–6% of construction cost	Contractor or property owner (if self-built)
Luxury Property Tax (PPnBM)	Tax on high-value properties	For properties priced ≥ IDR 30 billion (~USD 2M)	20% of sale value	Seller or developer
Name Change Tax (BBN)	Fee to register new owner on property certificate	During ownership transfer	(Land price per m² ÷ 1,000) × total land size	Buyer

Why Is Property Tax Important?

Property taxes are a key part of owning real estate in Indonesia. They not only represent your legal responsibility as an owner but also help you avoid unexpected costs or legal issues later on.

Paying the correct taxes ensures that your ownership and investment are recognized by the government, which is essential for both security and compliance.

For investors, property taxes also affect your overall return on investment (ROI). Knowing how much you’ll pay annually and what other related taxes might apply (like rental income tax or land and building acquisition tax) helps you make smarter financial decisions from the start.

Types of Property Taxes in Bali

When buying or owning property in Bali, several taxes will apply depending on your situation, whether you’re purchasing, renting out, or simply holding the property.

1. Property Acquisition Tax (Bea Perolehan Hak atas Tanah dan Bangunan or BPHTB)

When you buy property in Bali, you’ll need to pay a property transfer tax (also called the "transfer tax"). This is a one-time tax paid when the property ownership changes hands.

• Rate: 5% of the property’s value — either the sale price or the government’s assessed value, whichever is higher.
• Who pays: The buyer, once during the transaction process.
• When to pay: Before the notary signs the property transfer deed.

Calculating Property Acquisition Tax

Formula: BPHTB = 5% × (NPOP – NPOPTKP)

NPOP (Nilai Perolehan Objek Pajak) refers to the tax object acquisition value, while NPOPTKP (Nilai Perolehan Objek Pajak Tidak Kena Pajak) is the non-taxable allowance. The minimum amount is set at IDR 60 million.

For example, if your your villa costs IDR 5 billion, then your BPHTB = 5% × (5 billion – 60 million) = IDR 247 million.

2. Annual Property Tax (Pajak Bumi dan Bangunan or PBB)

When you own property in Bali, you’ll need to pay an annual property tax (or, "Land and Building Tax"). This tax applies to all property owners in Indonesia and is based on the assessed value of your land and building.

• Rate: Typically between 0.1% and 0.5% of the property’s assessed value, depending on local government regulations.
• Who pays: The property owner. You can pay it at local banks, post offices, or online via government payment portals.
• When to pay: Once a year within six months after the tax bill (SPPT) is issued by the tax office.

Calculating Annual Property Tax

Formula: PBB = 0.5% × NJKP

To calculate your PBB, you need two main values:

• NJKP = 40% × (NJOP – NJOPTKP) for properties above IDR 1 billion
• NJKP = 20% × (NJOP – NJOPTKP) for properties below IDR 1 billion
• NJOPTKP = is IDR 12 million ($732)

NJOP (Nilai Jual Objek Pajak) is the government-assessed market value of the property. This value is determined by the local tax office, not by the actual market price or sale value. NJKP (Nilai Jual Kena Pajak) refers to the taxable portion of that assessed value.

For example, let’s say your villa has an NJOP value of IDR 5 billion.

• NJKP = 40% × (IDR 5,000,000,000 – IDR 12,000,000)
  = IDR 1,99 billion

Now your PBB tax can be calculated as follows:

• NJKP = 40% x (IDR 5,000,000,000 - IDR 12,000,000) = IDR 1,99 billion (IDR 1,995,200,000)
• PBB = 0.5% x IDR 1,995,200,000 = IDR 9.9 million (USD $595)

3. Property Transfer Tax (Pajak Penghasilan or PPH)

When you sell freehold property in Bali, you’ll need to pay an income tax called PPh (Pajak Penghasilan). This tax applies to the seller and is based on the declared value stated in the Sales Deed (Akta Jual Beli / AJB)

• Rate:
  • Freehold property: 2.5% of the declared sale value.
  • Leasehold property: 10% of the declared value if the seller has an Indonesian tax number (NPWP).
  • Foreign sellers without NPWP: 20% of the declared value.
• Who pays: The seller (owner) of the property.
• When to pay: Paid at the time of the sale, before the notary finalizes the transaction.

It's important to note that PPh is a final income tax. This means once you pay it, the income from that sale is considered fully taxed—it won’t be charged again when filing your annual tax report.

If you’re a foreign tax resident in a country with a double tax treaty with Indonesia, you can credit this payment when filing your income tax in your home country.

Calculating Property Transfer Tax

Formula: PPh = Sale Price × 2.5%

For example, when you sell your villa for IDR 5 billion → PPh = 5 billion × 2.5% = IDR 125 million.

4. Income Tax on Rental Income

If you rent out your property, you will need to pay income tax on your earnings. The rate and process can vary based on your residency status:

For Indonesian Tax Residents:

• Taxed on a progressive scale (5%–35%) based on total annual income. The tax is called Personal Income Tax (Pajak Penghasilan Orang Pribadi).
• You’re a resident if you stay over 183 days per year in Indonesia or have a permanent intention to live here.

Income Range (IDR)	Tax Rate
Up to 60,000,000	5%
60,000,001 – 250,000,000	15%
250,000,001 – 500,000,000	25%
500,000,001 – 5,000,000,000	30%
Over 5,000,000,000	35%

For Non-Residents:

• A flat 20% withholding tax (also known as "Rental Income Tax" or "Lease Tax") applies to gross rental income, unless reduced by a Double Tax Agreement (DTA) with your home country.
• If your country has a DTA with Indonesia, you may pay a lower rate and avoid double taxation on rental income.

Withholding Tax Category	Tax Rate
Indonesian residents	10%
Non-residents	20%

Keep in mind that if you do not have a permanent home in Indonesia, you still need to pay tax on income earned here.

Read More: Invest in Bali Guide: Get High ROI from Buying Property

5. Value Added Tax (VAT)

The Value Added Tax (VAT), known locally as Pajak Pertambahan Nilai (PPN), applies when purchasing or leasing property from a developer or company.

• Rate: 11% of the property’s selling price.
• Applies to: New or off-plan properties bought from developers or constructors.
• Does not apply to: Resale (used) properties or private individual sales.

Developers often include PPN in the total price. Verify this in your sales agreement at all times.

Calculating Value Added Tax

If you buying a new villa from a developer for IDR 5 billion → VAT = 11% × 5 billion = IDR 550 million.

6. Construction Tax (Pajak Konstruksi)

When a new building is completed in Bali, a Construction Tax applies. This tax is calculated based on the project’s construction budget, also known as the Rancangan Anggaran Biaya (RAB).

• Rate: Between 1.75% and 6% of the total construction cost, depending on how the project was carried out.
• Who pays:
  • If a contractor handled the project, the contractor is responsible for paying the tax.
  • If the construction was done privately (without a contractor), the property owner may be responsible.
• When to check: Always verify with the seller that this tax has been paid before buying a property. If it hasn’t, you could be charged later.

7. Luxury Property Tax (Pajak Penjualan atas Barang Mewah or PPnBM)

High-value properties in Bali may be subject to a Luxury Tax, known as PPnBM. This applies mainly to primary property sales such as villas, apartments, or townhouses.

• Rate: 20% of the property’s sale value.
• When it applies: For properties priced at IDR 30 billion or more (around USD 2 million, based on current rates).
• Who pays: The seller or developer at the time of the sale.

8. Name Change Tax (Bea Balik Nama / BBN)

When transferring ownership, there’s a small "Name Change Tax" to officially register the new owner’s name on the property certificate.

• Rate: Calculated using this formula = (Land price per square meter ÷ 1,000) × total land size (in m²)
• Who pays: The buyer when transferring the property title.
• When to pay: During the ownership transfer process, before the certificate is reissued.

Can You Pay Property Taxes in Advance?

Yes, you can pay your annual property taxes ahead of the official due date. Early payment is common and encouraged by the government.

Paying early offers several benefits, too! It helps you avoid late payment penalties, prevents legal issues, and in some regions, the government even provides discounts or incentives.

For example, Jakarta offered a 7.5% reduction on PBB in 2025, while Gunungkidul held a lottery for early payers.

Read More: The 2 Permits Every Bali Villa Investor Needs to Stay Legal

Benefits of Having a Tax ID (NPWP) as Foreigners

The Nomor Pokok Wajib Pajak (NPWP) is your Indonesian Tax Identification Number, essential for managing taxes and property ownership legally. By having this ID, you’ll benefit from:

• Reduced withholding tax rates on certain income or transactions.
• Simplified property registration and tax compliance (for BPHTB, PBB, and PPh).
• Eligibility for longer leaseholds and smoother business operations through legal entities (e.g., PT PMA).

Foreign investors generally need a KITAS (Limited Stay Permit) or KITAP (Permanent Stay Permit) to apply for an NPWP. A local tax consultant can help handle the registration and reporting process.

Tips to Stay Compliant with Bali Property Taxes

• Keep all transaction receipts and official payment proofs.
• Pay on time, or late payment penalties can reach up to 2% per month.
• Consult a certified tax advisor before signing any agreement.
• Apply for an NPWP early if you plan to rent out or sell your property.
• Double-check developer pricing to ensure VAT and acquisition tax are clearly stated.

Conclusion

Understanding property taxes in Bali is an essential step before buying or investing in your dream villa. Each part plays a role in making your investment legitimate, secure, and future-proof.

While the process can seem complicated at first, especially for foreigners, the good news is you don’t have to handle it alone.

Our team at Bali Villa Realty is here to guide you through every step of your property journey—from choosing the right villa to managing all tax and legal requirements with complete transparency.

Interested in learning more or still have questions? Click the button below to book a free, no-obligation consultation with one of our expert agents at your convenience.

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